Tca/1017/2014 Of The Commissioner Of Income Tax v. M/S Brigade Corporation India

IN THE HIGH COURT OF JUDICATURE AT MADRAS THE HON'BLE MR. JUSTICE R. MAHADEVANAND THE HON'BLE MR. JUSTICE MOHAMMED SHAFFIQ Tax Case Appeal No. 1017 of 2014 The Commissioner of Income TaxChennai.. Appellant M/s. Brigade Corporation India Pvt LtdPlot No. 30 & 31 Brigade TowersFinancial District, Nankramguda Hyderabad - 32 .. Respondent Tax Case Appeal filed under Section 260A of the IncomeTax Act, 1961 against the order dated 04.07.2014 passed by theIncome Tax Appellate Tribunal, “A” Bench, Chennai inI.T.A.No.358/Mds/2013 against the order of the Commissioner ofIncome Tax Appeals IX, Chennai-34 dated 22.11.2012 in ITANo.48/11-12/AIX in the assessment year 2007-08 and against theorder of the Assistant Commissioner of Income Tax CompanyCircle (2), Chennai-34 dated 25.02.2011 PAN/GIR No.AAACB8785Gin the assessment year 2007-08. JUDGMENT This tax case appeal has been filed by the appellant /Revenue, challenging the order dated 04.07.2014 passed by theIncome Tax Appellate Tribunal, Bench 'A', Chennai, inI.T.A.No.358/Mds/2013, relating to the assessment year 2007-08. 2.By order dated 09.12.2014, this Court admitted theaforesaid tax case appeal on the following substantialquestions of law:https://hcservices.ecourts.gov.in/hcservices/ “1. Whether on the facts and in thecircumstances of the case the Income TaxAppellate Tribunal was right in directing theAssessing Officer to recompute the deductionunder Section 10A by excluding freight andtelecommunications charges etc., incurred inforeign currency both from the export turnoverand from the total turnover? 2. Whether on the facts and in thecircumstances of the case the Income TaxAppellate Tribunal was right in deleting theaddition made by the Transfer Pricing Officer onaccount of adjustment to Arms Length Price bydirecting to exclude M/s.ECLERI Services on thebasis of abnormal profit from the list ofcomparables? 3. Is not the finding of the Tribunal badby holding that ECLERI Services is to berejected as comparables on the basis of abnormalprofit then Apollo Health Street Ltd., EurekaOutsourcing Solutions Ltd. and M/s. TricomInfocom Solutions Ltd also requires to berejected as they are loss making companies whichis contrary to the decision rendered by theTribunal in the case of 24/7 Customer Pvt. Ltd.(Bang) and Trilogy e-business software IndiaP.Ltd? 4. Whether the finding of the Tribunal isperverse especially when M/s.Apollo HealthStreet Ltd., Eureka Outsourcing Ltd. and TricomInfotech Limited which are all loss makingcompanies rejected as comparables then thearithmetical mean of the balance six comparablewould be 27.05% which is beyond the +1/-5% ofthe assessee's margin on which adjustment wouldbe required to be made on the price recorded bythe assessee?” 3. When this matter was taken up for consideration, thelearned counsel for the appellant / Revenue brought to thenotice of this court the Circular No.17/2019 dated 08.08.2019issued by the Central Board Direct Taxes, wherein, it isstipulated that appeals shall not be filed/pursued by theDepartment before the High Court in cases where the tax effectdoes not exceed Rs.1,00,00,000/- (Rupees One Crore) and inthis case, the tax effect is less than the threshold limit andthere is no audit objection. A memo through e-mail dated06.12.2021 has also been filed to that effect. 4. In the light of the aforesaid submissions made by thelearned counsel for the appellant / Revenue, the presenthttps://hcservices.ecourts.gov.in/hcservices/appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keepingopen the substantial questions of law for determination in anappropriate case. No costs. //True Copy// Sd/- Assistant Registrar (CS-IV) dhk Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Madras “A” Bench. Madras “A” Bench. 4. In the light of the aforesaid submissions made by thelearned counsel for the appellant / Revenue, the presenthttps://hcservices.ecourts.gov.in/hcservices/appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keepingopen the substantial questions of law for determination in anappropriate case. No costs. //True Copy// Sd/- Assistant Registrar (CS-IV) dhk Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Madras “A” Bench. Madras “A” Bench. 2.The Commissioner of Income Tax No.121, Mahatma Gandhi Road, Chennai-34. No.121, Mahatma Gandhi Road, Chennai-34. 3.The Commissioner of Income Tax Appeals IX, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. 4.The Assistant Commissioner of Income Tax Company Circle (2), No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. +1cc to Mr.T.Ravikumar, Advocate SR. No.64714 +1cc to Mr.N.Quadir Hoseyn, Advocate SR. No.65030 Tax Case Appeal No.1017 of 2014 MG (CO)PR (23/12/2021)