Ita/300/2023 Of The Pr. Commissioner Of Income Tax v. M/S Gmr Infrastructure Ltd

Digitallysigned by BLAVANYALocation:HIGHCOURT OFKARNATAKA IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27 DAY OF SEPTEMBER, 2024 PRESENT THE HON'BLE MR JUSTICE S.G.PANDIT AND THE HON'BLE MR JUSTICE C.M. POONACHA INCOME TAX APPEAL NO.300 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX, CENTRAL, 3 FLOOR, C.R. BUILDING, QUEEN'S ROAD, BENGALURU-560 001. CENTRAL, 3 FLOOR, C.R. BUILDING, QUEEN'S ROAD, BENGALURU-560 001. 2. THE ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), 3 FLOOR, C.R BUILDING, QUEEN'S ROAD, BENGALURU-560 001. OF INCOME-TAX, CENTRAL CIRCLE-2(2), 3 FLOOR, C.R BUILDING, QUEEN'S ROAD, BENGALURU-560 001. …APPELLANTS (BY SRI. DILIP M., A/W SRI. RAVIRAJ Y.V., ADVOCATES) AND: M/S. GMR INFRASTRUCTURE LTD., NO.25/1, SKIP HOUSE, MUSEUM ROAD, BENGALURU-560 025. PAN. AABCG 8889P …RESPONDENT THIS ITA/INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF THE INCOME TAX ACT, 1961, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE AND ETC. THIS APPEAL, COMING ON FOR ORDERS, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.G.PANDIT and HON'BLE MR JUSTICE C.M. POONACHA ORAL JUDGMENT (PER: HON'BLE MR JUSTICE S.G.PANDIT) Heard the learned counsel Sri. Dilip.M., along with Sri. Raviraj.Y.V., learned counsel for appellants/Revenue. 2. The Revenue is in appeal under Section 260-A of the Income Tax Act, 1961 (for short, ‘the Act’) questioning the correctness and legality of order dated 07.11.2022 passed by the Income Tax Appellate Tribunal, ‘B’ Bench, Bengaluru (for short, ‘Appellate Authority’) in C.O.No.111/Bang/2017 (in ITA.No.1741/Bang/2017) for the assessment year 2010-11. 3. This Court, admitted the appeal on 12.06.2023 to consider the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that holding that that the commission for Corporate Guarantee was to be computed @ 0.5% instead of prevailing market rate? 2. Whether on the facts and circumstances of the case, the Tribunal was correct in holding holding that commission for Corporate Guarantee was to be for providing appropriate adjustment for the counter guarantee received by the taxpayer from its Associated Enterprises when same is not established by assessee and ignoring findings of assessing officer/Transfer Pricing Officer? 3. Whether on the facts and in the circumstances of the case, the Tribunal’s order can be said as perverse in nature in nature as Tribunal has ignored findings of assessing authority and materials on record? 4. Learned counsel for the assessee submits that the tax effect in this appeal is less than Rs.2 Crores and therefore, the appeal should not be entertained at the instance of the revenue in view of the Circular No.09/2024 dated 17.09.2024 issued by the Central Board of Direct Taxes. It is also submitted that the aforesaid Circular binds the revenue. 5. On the other hand, learned counsel for the revenue submits that he be granted liberty to revive the appeal in case the matter falls within the exceptions under the aforesaid Circular dated 17.09.2024 and Circular No.5/2024 dated 15.03.2024. 6. In view of the aforesaid submissions, the appeal is disposed of with liberty as prayed for by the learned counsel for the revenue. However, the question of law is kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE SMJ List No.: 4 Sl No.: 1