Ita/714/2023 Of The Pr. Commissioner Of Income Tax-3 v. M/S Finastra Software Solutions (India)Pvt Ltd

NC: 2024:KHC:39906-DBITA No. 714 of 2023 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 25 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. 714 OF 2023 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX-3, KORMANGALA, INCOME TAX-3, KORMANGALA, BANGALORE. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1), BMTC COMPLEX, KORAMANGALA, BANGALORE …APPELLANTS Digitally(BY SRI. SANMATHI E.I., ADVOCATE) signed by BLAVANYAAND:Location:HIGHM/S FINASTRA SOFTWARE COURT OFKARNATAKASOLUTIONS (INDIA) M/S FINASTRA SOFTWARE SOLUTIONS (INDIA) PVT. LTD., 4 TO 6 FLOOR, VIRGO BUILDING, BAGMANE CONSTELLATION BUSINESS PARK OUTER RING ROAD, DODANEKUNDI BANGALORE - 2 - NC: 2024:KHC:39906-DB PAN: …RESPONDENT THIS ITA / INCOME TAX APPEAL IS FIELD UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 31/05/2023 PASSED IN IT(TP)A NO. 189/BANG/2022, FOR THE ASSESSMENT YEAR 2017-18. PRAYING TO 1 DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HONBLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED 31/05/2023 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEES CASE, IN APPEAL PROCEEDINGS IN IT(TP)A NO. 189/BANG/2022 FOR A.Y 2017-2018 (ANNEXURE A) AND GRANT SUCH OTHER RELIEF AS DEEMED FIT, IN THE INTEREST OF JUSTICE. 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. E.I.Sanmathi 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 31.5.2023 passed by the Income Tax Appellate Tribunal, ‘C’ Bench, Bengaluru (for short ‘Appellate Authority’) in IT(TP)A.No.189/Bang/2022 for the assessment year 2017-18, raising the following substantial question of law: "Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature in law in directing Transfer Pricing Officer to consider the LIBOR+200 basis as the interest rate ignoring that in 92CA order, the Transfer Pricing Officer has considered the 6 months LIBOR+400 basis points in case of foreign currency invoices and same has also been rightly upheld by DRP"? 3. 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. 4. 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. 5. 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