To Consider The Following Substantial Question Of Law v. Dcit In

Digitally signedbyMARIGANGAIAHPREMAKUMARILocation: HIGHCOURT OFKARNATAKA NC: 2024:KHC:39750-DBITA No. 477 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24 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. 477 OF 2018 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME TAX CIT (A), 5 FLOOR, BMTC BUILDING, 80 FEET ROAD, KORMANGALA BENGALURU-560095. 2. THE ASST. COMMISSIONER OF INCOME TAX CIRCLE-7(1)(2), 2 FLOOR BMTC BUILDING, 80 FEET ROAD KORMANGALA BENGALURU-560095. …APPELLANTS (BY SRI. SUSHAL TIWARI, ADV.) AND: M/S. XL HEALTH CORPORATION INDIA PVT. LTD., NO.54, ABACUS CENTRE, 1 MAIN, SARAKKI INDUSTRIAL AREA III PHASE, J P NAGAR, BENGALURU-560078 PAN: AAACX 0544K. …RESPONDENT (BY SRI. B.S. BALACHANDRAN, ADV.) THIS APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 09.02.2018 PASSED IN IT A NO. 2311/BANG/2016, FOR THE - 2 - NC: 2024:KHC:39750-DBITA No. 477 of 2018 ASSESSMENT YEAR 2012-2013, VIDE ANNEXURE-D, PRAYING THIS COURT TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE; II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, BENGALURU IN IT A NO. 2311/BANG/2016 DATED 09.02.2018, VIDE ANNEXURE-D, AND CONFIRM THE ORDER OF THE DRP CONFIRMING THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-7(1)(2), BENGALURU 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.Sushal Tiwari., for appellants/Revenue and learned counsel Sri.B.S.Balachandran for respondent/assessee. 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 - 3 - 09.02.2018 passed by the Income Tax Appellate Tribunal, ‘A’ Bench, Bengaluru (for short, ‘Appellate Authority’) in IT(TP)A.No.2311/Bang/2016 for the assessment year 2012-13. 3. This Court, admitted the appeal on 12.09.2019 to consider the following substantial question of law: “1. Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse as Tribunal has excluded 3 comparable companies on functional dissimilarity grounds without considering the FAR analysis done by Transfer Pricing Officer and materials brought on record with regard to similarities of assessee- company with comparable? 2. Whether on the facts and in the circumstances of the case, the Tribunal is right in setting aside disallowance of depreciation on purchase of software under section 409a) (ii) of the Act by following decision of this Court in the case of VOGUE VESTURES PVT. LTD. V. DCIT in NC: 2024:KHC:39750-DBITA No. 477 of 2018 ITA No.1199/Bang/2016 dated 22.12.2017 even when the assessing authority rightly disallowed the said expenditure for non deduction of TDS on purchase of software and without considering the decision of this Court in the case of SAMSUNG ELECTRONICS CO. LTD. Reported in 2011(16) Taxmann.com 141 (KAR)?” 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 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 MPK CT:bms List No.: 2 Sl No.: 0