When The Matter Was Taken Up For Hearing, At The Outset It Has Been Brought To The Notice Of This Court That The Issue Involved In The Present Appeal Has Been P v. Income Tax Officer (International Taxation) And Another) Decided On 08.03.2021

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 30 DAY OF JUNE, 2021 PRESENT THE HON'BLE MR. JUSTICE SATISH CHANDRA SHARMA AND THE HON'BLE MR. JUSTICE NATARAJ RANGASWAMY I.T.A. NO.150 OF 2018 BETWEEN: 1. THE PR. COMMISSIONER OF INCOME-TAX, 5 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU - 560095. 2. THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -11 (1) PRESENT ADDRESS: CIRCLE -1(1)(1) 2 FLOOR, BMTC BUILDING 80 FEET ROAD, KORMANGALA BENGALURU-560095. …APPELLANTS (BY SRI. ARAVIND K.V., ADVOCATE) AND: M/S. ALLEGIS SERVICES INDIA PVT. LTD., COMMERCE @ MANTRI, LEVEL-3, NO.12/1 & 12/2, NS PALYA, BANNERGHATTA ROAD, BENGALURU - 560076 PAN: AAFCA 0825M …RESPONDENT (BY SRI. T.SURYANARAYANA, ADVOCATE) THIS APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF THE ORDER DATED 15.09.2017 PASSED IN IT(TP)A. NO.1370/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010 (VIDE ANNEXURE-D) PRAYING THIS HON'BLE COURT TO (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED IN THE APPEAL (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN IT(TP)A NO. 1370/BANG/2014 DATED 15/09/2017 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1)(1), BENGALURU (VIDE ANNEXURE-D) (iii) TO PASS SUCH OTHER SUITABLE ORDERS AS THIS HON'BLE COURT DEEMS FIT TO GRANT IN THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR HEARING THIS DAY, SATISH CHANDRA SHARMA J., DELIVERED THE FOLLOWING: JUDGMENT The present appeal has been filed by the revenue against the order dated 15.09.2017 passed by the Income Tax Appellate Tribunal, Bangalore Bench 'A', in I.T.(T.P)A.No.1370/Bang/2014 in respect of the assessment year 2009-2010. 2. This Court has admitted the appeal on the following substantial questions of law: “i) Whether on the facts and circumstances of the case, the Tribunal is right in law in setting aside the disallowance of section 40(a)(ia) of the Income Tax Act, 1961 made by assessing authority in respect of payment made towards purchase of software by holding that same does not fall under definition of Royalty? ii) Whether on the facts and circumstances of the case, the Tribunal is right in law in directing the TPO to include foreign exchange gain / loss as operating Revenue by following its earlier decision in case of Triology E-Business? iii) Whether on the facts and circumstances of the case, the Tribunal is right in law in confirming the order of CIT(A) holding that assessee is entitled to risk adjustment as per prevailing norms ?" 3. When the matter was taken up for hearing, at the outset it has been brought to the notice of this Court that the issue involved in the present appeal has been put to rest in view of the decision rendered by the Division Bench of this Court in ITA No.308 of 2018 (Technicolor India Private Limited vs. Income Tax Officer (International Taxation) and Another) decided on 08.03.2021. 4. In the aforesaid decision, the Division Bench of this Court in paragraphs 3 and 4 has held as under: “3. When the matter was taken up today, learned counsel for the assessee submitted that the issue involved in this appeal has been put to rest in view of the decision rendered by the Supreme Court in Civil Appeal Nos.8733-8734/2018 between ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED VS. THE COMMISSIONER OF INCOME TAX & ANOTHER, vide order dated 02.03.2021 and the issue involved in this appeal has been answered against the Revenue and in favour of the assessee. 4. Learned counsel for the Revenue was unable to dispute the aforesaid submission.” 5. Learned counsel for the revenue has not controverted the aforesaid submission. 6. In light of the above, for the reasons assigned in the aforesaid judgment rendered by the Hon`ble Supreme Court in Civil Appeal Nos.8733-8734/2018 dated “3. When the matter was taken up today, learned counsel for the assessee submitted that the issue involved in this appeal has been put to rest in view of the decision rendered by the Supreme Court in Civil Appeal Nos.8733-8734/2018 between ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED VS. THE COMMISSIONER OF INCOME TAX & ANOTHER, vide order dated 02.03.2021 and the issue involved in this appeal has been answered against the Revenue and in favour of the assessee. 4. Learned counsel for the Revenue was unable to dispute the aforesaid submission.” 5. Learned counsel for the revenue has not controverted the aforesaid submission. 6. In light of the above, for the reasons assigned in the aforesaid judgment rendered by the Hon`ble Supreme Court in Civil Appeal Nos.8733-8734/2018 dated 02.03.2021, the first substantial question of law is answered in favour of the assessee and against the revenue. The substantial question of law Nos.(ii) and (iii) are left open as there is another Income Tax Appeal in ITA No.151/2018 in which similar questions of law are to be answered by this Court. With the aforesaid, the Appeal stands disposed of. Sd/- JUDGE Sd/- JUDGE