Itta/137/2024 Of The Pr. Commissioner Of Income Tax- 2 v. M/S Imerys Ceramics India Private Limited

IN THE HIGH COURT FOR THE STATE OF TELANGANAAT HYDERABADMONDAY, THE TENTH DAY OF FEBRUARYTWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHYANDTHE HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA INCOME TAX TRIBUNAL APPEAL NO: 137 OF 2024 lncome Tax Tribunal Appeal under Section 260-,4 of the lncome tax Act 1961against the order dated 21.05.2024 on the file of the lncome Tax Appellate Tribunal,Hyderabad Benches ["A", ]Hyderabad in l.T.A. T.P. No. 494lHydl2022 for AssessmentYear 2018-'19 preferred ['against ]the Order dated 3'1-07-2021 passed in PAN/GIRNo on the file of the lncome Tax Department Office of the DeputyCommissioner of lncome tax, Circle 2(1), Hyderabad. Between: The Pr. Commissioner of lncome Tax- 2, 6th Floor, Signature Towers KondapurOpposite Botanical Gardens, Hyderabad- 500084. .,.APPELLANT/RESPONDNET AND [\I/s lmerys Ceramics lndia Private Limited, 1- 11- 24614, F 1- 11- 2- 17lD 4thFloor, Surya Arcade, Secunderabad, Hyderabad, Begumpet, P. O500016,Telangana. lndia. ( PAN No. ) ...RESPONDENTS/APPELLANTS Counsel for the Appellant : Ms. J. Sunitha Standing Counsel representingMr. P Murali Krishna Counsel for the Respondent : Mr. C.V. Narshimham The Court delivered the following: THf HON'BLE SRI JUSTICE P.SAM AND THE HON'BLE SRI JUSTICE NARSING RAO NANDIK INCOM E TAX TRIBUNAL APPEAL No.737 OF [20i',][ 4] JUDGMENT: [(pet ]Hon'ble Sri Justice P.Sam Koshy) Heard Ms.J.Sunitha, learned Standing Counsel [apoearinll ][urttlc-r ][the]instructions of M'-P.Murli Krishna, learned Seniol [S',-anding ][jounscl ][lor]Income Tax, lbr the appellant and Mr.C.V.Narshimhant, [leitnled ][counsel]appearing for the respondent. [perused ]the material availablc [otr ][reco'C.] 2. The instant appcal under Section 260,4. of the Income ['lax ]A':t, [[9(rl. ][has] been preierrcd by th,: appellant against the order dated [21 ].l)5,2025 l [assccl ][bv ][tl.rr:]Income ['['ax ]App,:llatc Tribunal, l{yderabad "A" Bcncli. [){1 ]dei-iibed. [in]I.T'.A.T,P.No.4 [g4tlL,, ]d,t2o22 lbr rhe -{ssessnrent Year 2il8-19. 3. The issue in',,rllcd in the instant cases is whether ihe asst:s: .c con)pa rhas to be asscsscc cr-rr.rsidering to be a manufacturing seglilcltl [(rr ]ir [l; ][itdini]segmcnt 'i 4. he tribuna irr thc f'acts and circuinstances more pal icularlv iiresubmissions that [\.r ][e ]rc brought before the tribunal so fat as the [es ][i'-:sscc ]bcitr:linvolvcd in manuf r':turing as also in trading found that therr: [u' ]rs [a ]spcciliecontention ol'1he e:is;essee that the manufacturing segnre)]t was orrl" 5l'l/o [\hcn] compared to thc non-All [transactions and ][it ][was ][in ][this context ][that ][the ][tribunal] in its finding in [paragraph ][No.25 ][has ][held ][as ][under:] "lt that is true, it would be unreasonable to classil\ the operations of the [assessee ][under]manutbcturing segment. [Hence, ][this ][issue ][is]rcstot'cd to the file of the [learned ][Assessing]() lllcr:r/leai.rred TPO to veriff the fact as to thevolumcs of the operations of [the ][assessee ][and ][if ][the]maiorit.v of the transactions [of ][the ][assessee ][with]A L'.s iclate to the trading [segment, ][it ][would ][be]rcasonilble to classiry the [assessee ][for ][the ][purpose]ol economic analysis for [aggregation ][under trading]scgment. fhis [ground ][is ][accordingly treated ][as]lilluu ori lt,r statistical [purpose".] 5. It is thls ordci of [rvhich ][has been ][put ][to ][challenge by ][way ][of'thc ][instant]appciri- (r. Lcartrctl counsel t-rr the [departrnent ][tried to ][canvas ][the aspect thc grounds]l-.i lhc [:tppe ][liarri ][herein ][are mixed ][question ][of ][fact ][as ][also law ][and]rajsc.l Lhcrelirrc thc appcal [r.rceds ][to ][be ][admitted.] 5. It is thls ordci of [rvhich ][has been ][put ][to ][challenge by ][way ][of'thc ][instant]appciri- (r. Lcartrctl counsel t-rr the [departrnent ][tried to ][canvas ][the aspect thc grounds]l-.i lhc [:tppe ][liarri ][herein ][are mixed ][question ][of ][fact ][as ][also law ][and]rajsc.l Lhcrelirrc thc appcal [r.rceds ][to ][be ][admitted.] 7. I iori cr cr. pcrrrsal of the [record ][would clearly ][go ][to ][show ][that ][there is ][no]rnatcrial utarlc .r"'aillible [b-v ][the ][appellanVdepartment ][to ][show that ][thc ][tinding]rcachcd h1 thc Lrihunal [lbr ][remanding ][the ][matter back ][to the ][transf'er ][pricing],t'liccr t.r r',iilr [ril; ]'..[ume [of ][the operahn ][o[ ][the ][asscssee ][so lar ][as] Page 3 of 4 manufacturing or the trading segment is concerned. [We ][lind ][that ]the [finding]given by the tribuna Lo be purely finding of fact and the matter is st ll left uponfor the transfer pricing officer to veriff the segmentell inlbrmatior [u'hich ][the]assessee is liable tc produce before the TPO and thereatter-l'PO [to ][take ][an]appropriate decision We do not find any strong [case ][made ]out [by ][thr: appellants]calling for interfer:nce to the impugned order. The appeal f,rils and [is]accordingly rejected As a sequel, miscellaneous applications pending if an-v. shall standclosed.I I Sd/- M. VIJA'(A BHASKEROIN'I'REGISTRAR//TRUE COPY//ECTION OFFICER To, 1. The lncome [Ta ][< ][Appellate Trtbunal' Hyderabad ][Benches ]["A", ][H'Tderabad]2. The lncome [Ta ][< ][Department ][office ][of ][the ][Deputy ][commissioner ][of ][lncome]tax, Circle 2(1), tiyderabad.2. The lncome [Ta ][< ][Department ][office ][of ][the ][Deputy ][commissioner ][of ][lncome]tax, Circle 2(1), tiyderabad. 3. One CC to [tVlr ][F) ][[/lurali ][Krishna, ][Advocate ] 4. One CC to [lVlr. ]O V [Narshimham, ][Advocate ] 5. Two CD [Copies] *p DL II II HIGH COURTDATED:1O1Q212025 JUDGMENTTriE St4([(][)\-\],clTTA.No.137 ol 2O21ott)t22 APg 2Wr)llotl REJECTING THE AI'PEAL @ltcL)