Ita/98/2021 Of Principal Commissioner Of Income Tax-7 v. M/S Ue Development India Pvt Ltd

Digitallysigned byBHARATHI SLocation:HIGHCOURT OFKARNATAKA 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. 98 OF 2021 BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX-7, OF INCOME TAX-7, BMTC COMPLEX, KORAMANGALA, BENGALURU. 2. THE COMMISSIONER OF INCOME TAX, CIRCLE -7(1)(1) BMTC COMPLEX, KORAMANGALA, BENGALURU. KORAMANGALA, BENGALURU. …APPELLANTS (BY SRI. SANMATHI E.I., ADVOCATE) AND: M/S. UE DEVELOPMENT INDIA PVT.LTD., NO.116, 702, 7 FLOOR, PRIDE HULKUL BUILDING, LALBAGH ROAD, BANGALORE-560 027. PAN NO. …RESPONDENT (RESPONDENT SERVED) THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 20/09/2019 PASSED IN ITA NO. 1895/BANG/2017 FOR THE ASSESSMENT YEAR 2010-2011 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND ETC. THIS APPEAL, COMING ON FOR HEARING, 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.Sanmathi.E.I., for the 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 20.9.2019 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in ITA.No.1895/Bang/2017 for the assessment year 2010-11. 3. This Court, admitted the appeal on 22.7.2024 to consider the following substantial question of law: “Whether on the facts and circumstances of the case and in law, the Tribunal is right in law in holding that in mirror transactions, ALP adjustments cannot be done, i.e., if one transaction is treated as at Arm's Length, no adjustment can be done on the other related corresponding transaction of the associated enterprises without appreciating that this stand - 4 - is against the provisions of section 92(3) of the Act ?” 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 - 5 - kept open to be adjudicated in an appropriate proceeding. Sd/- (S.G.PANDIT) JUDGE Sd/- (C.M. POONACHA) JUDGE SMJ List No.: 2 Sl No.: 17