Date Of Judgment 30-08-2018, Ita v. M/S. Microchip Technology [India] P. 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.285/2018 BETWEEN : 1.PR. COMMISSIONEROF INCOME TAX-4OF INCOME TAX-4 [‘T]FLOOR, BMTC BUILDING KORAMANGALA, BANGALORE. «|THE ASSISTANT COMMISSIONEROF INOME-TAX, CIRCLE-4(1)BENGALURU._ APPBLLANTS|OF INOME-TAX, CIRCLE-4(1)BENGALURU._ APPBLLANTS| (BY SRI SANMATHI.E.I., ADV.) AND ; M/s. MICROCHIP TECHNOLOGY(INDIA) P. LTD.,|No. 149B, EPIP PHASE.INDUSTRIAL AREA, WHITEFIELDBBNGALURU-560066PAN: AABCMO9OS868_. RESPONDENT. THIS INCOME TAX APPEAL IS FILED UNDER SECTION|260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER|DATED 27.10.2017 PASSED IN IT/TP|A No 260/BANG/2015, FOR.THE ASSESSMENT YEAR: 2010-2011, VIDE ANNEXURE - A,PRAYING TO: DECIDE THE FOREGOING QUESTION OF LAW.AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE.RFORMULATBED BY THR HON'BLBE COURT AS DBEBMED FIT SETASIDE.TH ECOMMON,APPELLATEORDER|DATHD: Date of Judgment 30-08-2018, ITA No.285/2018 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. Microchip Technology [India] P. Ltd., 2/6 °"2'7.10.20PASSED|BY|THREINCOMETAXAPPBLLATEHTRIBUNAL, 'B' BENCH, BANGALORE, IN APPEAL PROCEEDINGS|IN IT|/TPJA No.260/BANG/2015 FOR ASSESSMENT YEAR: 20102011, VIDE ANNEXURE-A, AS SOUGHT FOR IN THIS APPEAL. THIS APPEAL COMING ON FOR ADMISSION, THISDAY,S. SUJATHA, J., DELIVERED THE FOLLOWING: JU DGMENT 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.260/Bang/2015 dated|2'7.10.201, relating to the Assessment Year2010-11. 2.The substantial question of law framed by the Revenue in the Memorandum of Appeal is as under: “Whether,OTLthe factsandinthecircumstances of the case, the Tribunal was rightin directing the TPO to apply RPT filter of 15%whendifferentTribunal’s|includingITAT.BengaluruhaveconsideredYI5%RPIas|appropriate?” Date of Judgment 30-08-2018, ITA No.285/2018 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. Microchip Technology [India] P. Ltd., 3/6 3.The learned Tribunal, after discussing the rival contentions of both the Appellants-Revenue and Respondent-Assessee, has returned the findings asunder: “OS. Apropos RPTfilter the bench has alsopointed out that the Tribunal is directing taking25% RPT filter as against O% in its order in thematter of ACI Worldwide Solutions P. Ltd.,HT/TP/A.262/ Bang/ 2015, dated 26.07.2017, hasextensively dealt with the issue of RPT filter, tothe following effect: KVeVNKK” Following the principles laid down byBench in the above noted case, it was suggestedobjections raised regarding the suitability ofcomparables have to be examined consideringthis decision, along with other aspects.” 4However, 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. -—v- M/s Softbrands India Pvt. Ltd,) has held that in Date of Judgment 30-08-2018, ITA No.285/2018 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. Microchip Technology [India] P. Ltd., 4/6 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: 4However, 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. -—v- M/s Softbrands India Pvt. Ltd,) has held that in Date of Judgment 30-08-2018, ITA No.285/2018 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. Microchip Technology [India] P. Ltd., 4/6 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: oo. A substantial quantum of internationaltrade and transactions depends upon the fair andquick judicial dispensation in such cases. Had itbeen|OmCaASeofSubstantialquestionofinterpretation of provisions of Double TaxationAvoidance Treaties (DTAA), interpretation ofprovisions of the Income Tax Act or OverridingEffectofthe TreatiesOVETthe|Domestic.Legislations or _ the questions like TreatyShopping, Base Erosion and Profit Shifting(BEPS), Transfer of Shares in Tax Havens (like inthe case of Vodafone etc.), | based on relevantfacts, such substantial questions of law could |be raised before the High Court underSection|260-A|of the Act, the Courts could have Date of Judgment 30-08-2018, ITA No.285/2018 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. Microchip Technology [India] P. Ltd., 5/6 embarked upon such exercise of framing and)answering such substantial question of law. Onthe other hand, the appeals of the present tenoras to whether the comparables have been rightlypicked up or not, Filters for arriving at the correctlist of comparables have been rightly applied ornot, do not in our considered opinion, give rise toany substantial question of law. 56. We are therefore of the consideredopinion that the present appeals filed by theRevenue do not give rise to any substantialquestion of law and the suggested substantialquestions of law do not meet the requirements ofSection 260-A.of the Act and thus the appealsfiled by the Revenue are found to be devoid ofmerit and the same are liable to be dismissed. | 57. We make it clear that the same'|yardsticks and parameters will have to beapplied, even tf such appeals are filed by theAssessees, because, there may be cases where)the Tribunal giving its own reasons and findingshas found certain comparables to be goodcomparables to arrive at an‘Arm’s LengthPrice“ in the case of the assessees with whichthe assessees may not be satisfied and have filedsuch appeals before this Court. Therefore we Date of Judgment 30-08-2018, ITA No.285/2018 Pr. Commissioner of Income Tax-4 & Another Vs. M/s. Microchip Technology [India] P. Ltd., 6/6 clarify that mere dissatisfaction with the findings|offacts arrived at by the learned Tribunal is notat all a sufficient reason to invokeSection 260-Aof the Act before this Court. o8. The appeals filed by the Revenue aretherefore dismissed with no order as to costs.” 5.Having heard the learned counsel appearing for the Appellants-Revenue, we are therefore of theopinion that no substantial question of law arises in thepresent case also. The Appeal filed by the Appellants-|Revenue is liable to be dismissed and it is dismissed|accordingly. No costs. Copy of this Order be sent to the Respondent-Assessee forthwith. NC. Sd/-.JUDGE. Sd/-.JUDGE|