Date Of Judgment 30-08-2018, Ita v. M/S. Rambus Chip Technologies [India] Pvt. Ltd

IN THE HIGH COURT OF KARNATAKA, BENGALURU DATED THIS THE 30 DAY OF AUGUST 2018. PRESENT THR HON’BLEK DR.JUSTICE VINBBT KOTHARI ANT) THR HON’BLE MRS.JUSTICEK S.SUJATHA I.T.A. No.1044/2017 BETWEEN : 1.PR. COMMISSIONEROF INCOME TAX-o BMTC COMPLEX. KORAMANGALA> BANGALORE.» «|THE JOINT COMMISSIONER |OF INCOME TAX, CIRCLE 5(1)(1) BANGALORE._ APPBLLANTS| (BY SRI SANMATHI.E.I., ADV.) AND : M/s. RAMBUS CHIP TECHNOLOGIES(INDIA) PVT. LTD.,(RAMBUS INDIA) 12 FLOOR.TOWER C & D, IBC|KNOWLEDGE PARK, 4/1BANNBRGATTA ROADBANGALORE-5600029PAN NO.AACCR8&89592.. RESPONDENT. THIS INCOMB TAX APPBAL IS FILED UNDER SECTION|2600-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDERDATED 28/07/2017, PASSED IN IT|TP|A No.1091/BANG/2016,,FOR THE ASSESSMENT YEAR 2010-11 VIDE ANNEXURE-A,| Date of Judgment 30-08-2018, ITA No.1044/2017 Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., PRAYING TO: DECIDE THE FOREGOING QUESTION OF LAW|AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE.KHORMULAITED BY THERE HON BLE COURT DEEMED FIT AND ASIDE THE APPELLATE ORDER DATED: 28/07/2017 PASSED)BY THE INCOME TAX APPELLATE TRIBUNAL, 'B’ BENCH,|BENGALURU,IN|APPEALPROCHBDINGSIN|IT} TPANo.1091/BANG/2016 FOR ASSESSMENT YEAR 2010-11 VIDE.ANNEXURE-A, AS SOUGHT FOR IN THIS APPEAL; AND TOGRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THEINTKBREST OF JUSTICE. THIS APPEAL COMING ON FOR ADMISSION, THISDAY, S. SUJATHA, J., DELIVERED THE FOLLOWING: JU DBiGMENT Mr. E.I.Sanmathi,Adv. for Appellants — Revenue. This Appeal is filed by the Revenue purportedlyraising substantial questions of law arising from theOrder of the Income Tax Appellate Tribunal, BangaloreBench ‘B’, Bangalore, inIT[TP|A No.1091/Bang/2016dated28.07.2017, relating to the Assessment Year2010-11. ? The substantial questions of law framed by the Revenue in the Memorandum of Appeal are as.under: aWhetherOF.thefactsand|circumstances of the case, the Tribunal ts justified| Date of Judgment 30-08-2018, ITA No.1044/2017 Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., 3/8 in directing the Assessing Officer to exclude thecertain expenditure incurred in foreign currencyboth from the export turnover and the _ totaturnover when there 1s no provision in section 10Awhich requires the said expenses to be reducedfrom the total turnover?| D2 WhetherOF.the.factsand|circumstances of the case, the Tribunal ts right in|excluding comparables such as Tata Elxsi and)InfosysTechnologiesLtd.,whenthe.Saidcomparables are considered by the TransferPricing Officer after application of quantitativeand qualitative filters?” 3.Learned Counsel for the Appellants-Revenue does not press substantial question No.1. 4Submission is taken on record. 5.The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue andRespondent-Assessee, has returned the findings asunder: Date of Judgment 30-08-2018, ITA No.1044/2017 Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., 4/8 Regarding Substantial Question of Law No.2: “AHaving carefully examined the orderof the lower authorities and documents availableon record in the light of rwal submissions, we find|that in the earlier years, the Tribunal hasexamined the issue and following another orderin the case of Airbus India Operations Put. Ltd.,has held that Tata Elxsi Ltd., and Infosys Ltd.,are not the good comparables, therefore theyShould be excluded from the lst of finalcomparables. The relevant observation of theTribunal is extracted hereunder: KVeVNKK” 5.|Since the Trbunal has taken aparticular view in the similar set offacts, we find|no justification to take a contrary view in thisappeal. Accordingly, we hold that exclusion ofthese companies from the list of comparables bythe CIT/A] ts proper. We accordingly confirm theorder of the CIT/A].” 6.However, this Court in a recent judgment in KVeVNKK” 5.|Since the Trbunal has taken aparticular view in the similar set offacts, we find|no justification to take a contrary view in thisappeal. Accordingly, we hold that exclusion ofthese companies from the list of comparables bythe CIT/A] ts proper. We accordingly confirm theorder of the CIT/A].” 6.However, this Court in a recent judgment in I.T.A. Nos.536/2015 c/w 537/2015delivered on25.06.2018 (Prl. Commissioner of Income Tax & Anr. Date of Judgment 30-08-2018, ITA No.1044/2017 Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., —v- M/s Softbrands India Pvt. Ltd.») has held that in these type of cases, unless an ex-iacie perversity in thefindings of the learned Income Tax Appellate Tribunal isestablished by the appellant, the appeal at the instanceof an assessee or the Revenue under Section 260-A otthe Act is not maintainable. The relevant portion of the said judgment isquoted below for ready reference: “Conclusion: 55.Asubstantialquantumof|international trade and transactions dependsupon the fair and quick judicial dispensation|in such cases. Had it been a case oOf|substantial questionof|interpretationof|provisions of Double Taxation AvoidanceTreaties (DTAA), interpretation ofprovisions ofthe Income Tax Act or Overriding Effect of the|Treaties over the Domestic Legislations or the |questions like Treaty Shopping, Base Erosionand Profit Shifting (BEPS), Transfer of Shares|in Tax Havens (like in the case of Vodafone| Date of Judgment 30-08-2018, ITA No.1044/2017 Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., 6/8 etc.), uf based on relevant facts, such|substantial questions of law could beraised before the High Court underSection260-4of the Act, the Courts could have|embarked upon such exercise offraming and|answering such substantial question of law.On the other hand, the appeals of the present|tenor as to whether the comparables have.been rightly picked up or not, Futers for|arriving at the correct list of comparables|have been rightly applied or not, do not in our|consideredopinion, giveriseTo anysubstantial question of law. 06. Weare therefore of the consideredopinion that the present appeals filed by the|Revenue do not give rise to any substantialquestionof|lawand.theSuggested|substantial questions of law do not meet therequirements ofSection 260-A|of the Act andthus the appeals filed by the Revenue are|found to be devoid of merit and the same are.liable to be dismissed. 57. We make it cleqr that the sameyardsticks and parameters will have to be Date of Judgment 30-08-2018, ITA No.1044/2017 Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., 7/8 applied, even tf such appeals are filed by the|Assessees, because, there may be cases.where the Tribunal giving its own reasons|and findings has found certain comparables|to be good comparables to arrive at an|7S. “ArLength Price“ in the case of the assesseeswith which the assessees may not be|satisfied and have filed such appeals beforethis Court. Therefore we clarify that mere|dissatisfaction with the findings of facts|arrived at by the learned Tribunal ts not at all|a sufficient reason to invoke.Section 260-Aof the Act before this Court. o8. The appeals filed by the Revenueare therefore dismissed with no order as to|costs.” T Having heard the learned counsel appearing for the Appellants-Revenue, we are therefore of theopinion that no substantial question of law arises in the present case also. The Appeal filed by the Appellants-|Revenue is liable to be dismissed and it is dismissed|accordingly. No costs. Pr. Commissioner of Income Tax-5 & Another Vs. M/s. Rambus Chip Technologies [India] Pvt. Ltd., 8/8 Assessee forthwith. Copy of this Order be sent to the Respondent- NGC. Sd/-.JUDGE| Sd/-.JUDGE|