Ita/250/2015 Of Commissioner Of Income Tax v. M/S. Yahoo Software

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23 DAY OF OCTOBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND| THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD ILT.A. NO.250 OF 2015 BETWEEN 1.|COMMISSIONER OF INCOME TAX, CENTRAL REVENUE BUILDINGS QUEENS ROALD, BANGALORE-560 OO1. 2.|THE DEPUI YCOMMISSIONER OF INCOME TAX, —CIRCLE 12 (5),BANGALORE.COMMISSIONER OF INCOME TAX, —CIRCLE 12 (5),BANGALORE. _ APPELLANTS (BY SRI EI SANMATHI, ADV.) ANI M/S. YAHOO SOFTWAREDEVELOPMENT INDIA PVT. LTD.,.“TORREY PINES,EMBASSY GOLF LINKS,BUSINESS PARKOFF. INDIRANAGAR,KORAMANGALA INTERMEDIATE RING ROAD,BANGALORE. RESPONDENT| (BY SRI T.SURYANARAYANA, ADV.) THIS I.T.A. IS FILED UNDER SECTION 260-A OF|I.T.ACT, 1961,ARISINGOUTOF|ORDER.DATED:31/12/2014 PASSEDIN|TTA.NO.1129/BANG/2010, FOR THE ASSESSMENT YEAR2006-2007 PRAYING TO 1. DECIDE THE FOREGOING QUESTION OF LAW AND /OR SUCH OTHER QUESTIONS OF LAW AS MAY BEFORMULATED BY THE HON’BLE COURT AS DEEMED FIT.2.|SET|ASIDE|THEAPPELLATE.ORDER.DATED: 31/12/2014PASSEDBY.THE|ITAT,‘B’BENCH,|BANGALORE, IN APPEAL PROCEEDINGS IN ITA NO.1129/BANG/2010 FOR ASSESSMENT YEAR 2006-07 ASSOUGHT FOR IN THIS APPEAL. © THIS I.T.A. COMING ON FOR FINAL HEARING,|THIS|DAY,ALOKARADHE|J.,DELIVERED|THEFOLLOWING: JUDGMENT Mr.E.I1.Sanmatni, learned counsel for the revenue. Mr.1.Suryanarayana,learnedcounsel for.the|aSSeSsSee. 2 |This appeal under Section 260-A of theIncome Tax Act, 1961 (nereinafter referred to as the Act’, for short) has been preferred by the revenue. Thesubject matter of the appeal pertains to the Assessment Year 2006-07. The appeal was admitted by a Bench ofthis Court vide order dated 18.01.2016 on the following.substantial questions of law: “7. Whether on the facts and in thecircumstances of the case, the Tribunalwere right in law in adopting turnoverfilter of Rs.Z200 crore when the turnoveris not a relevant filter in the softwereindustry and when the size of the.turnover and profit margins are not.linked in the software industry unlike’capital intensive companies? 2, Whether, on the facts and in_ thecircumstances of the case, the Tribunalwere right in law in holding that KALS—[InformationSystemsLtd.,Accel|Transmatic Ltd., Tata Elxsi Limited andLucid Software Ltd., cannot be taken ascomparables on the basis of facts ofdifferent case for different assessee for. differentassessmentYedlwithoutmaking any specific FAR analysis vis a_vis the assessee company in contrast’to the facts that these companiesSatisfyallthequalitative andquantitative filters applied by the TPO? 3. Whether, on the facts and in_ thecircumstances of the case, the Tribunalwere right in law in directing the TPO-to apply RPT filter of 15% instead ofRPT of 725%?”circumstances of the case, the Tribunalwere right in law in directing the TPO-to apply RPT filter of 15% instead ofRPT of 725%?” 3When the matter was taken up today, learnedcounsel for the assessee has produced a memo, which is"taken on record. Learned counsel for the assesseesubmits that the competent authority of USA and Indiahave reached mutual agreement and on the basis of theaforesaid agreement, the Assessing Officer has passed.an Order giving effect to mutual agreement procedurevide order dated 15.12.2015. It is also pointed out thatin view of the order passed by the Assessing Officer dated 15.12.2015, the substantial questions of lawinvolved in this appeal have been rendered academic. 4However, learned counsel for the revenuesubmits that the appeal may be disposed of with libertyto the revenue to revive the same, if occasion so arises. In view of aforesaid submission, the appeal is)disposed of with liberty as prayed for. Sd/-JUDGE Sd/-JUDGE| dn/-CT-HR|