Value Momentum Software Service Limited, Hyderabad v. Dy. Commissioner of Income Tax , Circle-17(2), Hyderabad

ITA 2197/Hyd/2017 | 2013-2014
Pronouncement Date: 19-05-2021 | Result: Allowed

Appeal Details

RSA Number 219722514 RSA 2017
Assessee PAN AAACI7400H
Bench Hyderabad
Appeal Number ITA 2197/Hyd/2017
Duration Of Justice 3 year(s) 4 month(s) 27 day(s)
Appellant Value Momentum Software Service Limited, Hyderabad
Respondent Dy. Commissioner of Income Tax , Circle-17(2), Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 19-05-2021
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB-A
Tribunal Order Date 19-05-2021
Date Of Final Hearing 19-04-2021
Next Hearing Date 19-04-2021
Last Hearing Date 25-06-2018
First Hearing Date 16-11-2020
Assessment Year 2013-2014
Appeal Filed On 22-12-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU ACCOUNTANT MEMBER I.T.A. NO. 2197/HYD/2017 ASSESSMENT YEAR: 2013-14 VALUEMOMENTUM SOFTWARE SERVICES PRIVATE LIMITED HYDERABAD [PAN: AAACI7400H] VS DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-17(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI H.SRINIVASULU AR FOR REVENUE : SHRI R.DIPAK DR DATE OF HEARING : 19-04-2021 DATE OF PRONOUNCEMENT : 19-05-2021 O R D E R PER S.S.GODARA J.M. : THIS ASSESSEES APPEAL FOR AY.2013-14 ARISES AGAINS T THE DCIT CIRCLE-17(2) HYDERABADS ASSESSMENT DATED 27-1 0-2017 FRAMED IN FURTHERANCE TO THE DISPUTE RESOLUTION PANEL (DRP)- 1 BENGALURUS DIRECTIONS DT.01-09-2017 IN F.NO.367/D RP-1/ BNG/2016-17 INVOLVING PROCEEDINGS U/S.143(3) R.W.S .92CA(3) AND 144C OF THE INCOME TAX ACT 1961 [IN SHORT THE AC T]; RESPECTIVELY. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. THE ASSESSEE HAS RAISED ITS TWO SUBSTANTIVE GROUND S IN THE INSTANT APPEAL. FORMER OF THE SAID GROUND CHALLENGE S CORRECTNESS OF THE LOWER AUTHORITIES ACTION MAKING ARM S LENGTH PRICE ALP ADJUSTMENT OF RS.1 20 78 616/- QUA ITA NO.2197/HYD/2017 :- 2 -: INTEREST ON RECEIVABLES INVOLVING ITS OVERSEAS ASSOCI ATED ENTERPRISE AES. SUFFICE TO SAY IT TRANSPIRES AT THE O UTSET THAT WE NEED NOT DELVE DEEPER QUA THE RELEVANT FACTS PERTAINING TO THE INSTANT ISSUE. WE FIND THAT ASSUMING BUT NOT ACCEPTING THAT THE LEARNER LOWER AUTHORITIES HAVE RIGHTLY FOUND THE ASSESSEES INTEREST RECEIVABLES AS BEYOND THE PERIOD INVOLVING UN-COMPARABLE TRANSACTIONS THE IMPUGNED ADJUSTMENT IS NOT LIABLE TO BE SUSTAINED FOR THE SOLE REASON THAT THE SAME HAS BEEN MADE NOT AS PER LIBOR RATE APPLICABLE IN CASE OF INTERNATIONAL TRANSACTIONS BUT AFTER TAKING STATE BANK OF INDIAS PRIME LENDING RATE @14.45% IN THE TRANSFER PR ICING OFFICERS (TPO) ORDER AND UPHELD TO THE EXTENT BETWEEN 6.5% TO 8% AS APPLICABLE IN CASE OF DOMESTIC TERM DEPOSITS. 3. LEARNED CIT-DRS VEHEMENT CONTENTION IS THAT THE TPO AS WELL AS THE DRP HAVE RIGHTLY TREATED THE FOREGOING BENCH MARK AS PER THE SHORT TERM DEPOSIT RATE IN THE STATE BANK O F INDIA. 4. WE FIND NO MERIT IN THE INSTANT ARGUMENT SINCE SUCH A SHORT TERM DEPOSIT CANNOT BE TAKEN AT PAR WITH AN INTERNATIONAL TRANSACTION U/S.92B OF THE ACT SINCE THE LA TTER INVOLVES FOREIGN CURRENCY AND OVERSEAS MARKET CONDITI ONS. IN ADDITION TO THIS LEARNED LOWER AUTHORITIES HAVE ALSO N OT ADOPTED ANY COMPARABLE IN THE VERY SEGMENT AS WELL SO AS TO COME TO THE CONCLUSION THAT THE ASSESSEES RECEIVABLES I N CASE OF OVERSEAS AES INVOLVED MORE THAN THE MARKET PRACTICE OF REASONABLE TIME PERIOD. WE KEEP IN MIND ALL THESE CL INCHING ASPECTS AND DIRECT THE TPO TO DELETE THE IMPUGNED ALP ADJUSTMENT OF RS.1 20 78 616/- IN ISSUE. THE ASSESSE ES ITA NO.2197/HYD/2017 :- 3 -: FORMER SUBSTANTIVE GROUND STANDS ACCEPTED IN THE ABOVE TERMS. 5. NEXT COMES THE LATTER ISSUE OF SECTION 43B DISALLOW ANCE OF RS.8 11 648/- PERTAINING TO EMPLOYEES PROVIDENT FUN D. IT IS NOT IN DISPUTE THAT LEARNED LOWER AUTHORITIES HELD THAT THE SAME HAD TO BE DEPOSITED BEFORE THE DUE DATE PRESCRIBED IN THE CORRESPONDING STATUTE THAN THE DUE DATE FOR FILING SECT ION 139(1) RETURN. THE REVENUES CASE IN TUNE THEREOF RELI ES ON SECTION 36(VA) READ WITH EXPLANATION THERETO THAT IT IS NO T SECTION 43B BUT THE FORMER PROVISION WHICH IS APPLICA BLE IN SUCH AN INSTANCE. WE FIND NO MERIT IN THE REVENUES F OREGOING STAND. WE TAKE NOTE OF THE EXPLANATORY MEMORANDUM TO THE FINANCE ACT 2021 PROPOSING AMENDMENT IN BOTH SECTION 36(VA) AS WELL AS SECTION 43B BY INSERTING CORRESPON DING EXPLANATIONS THAT ALTHOUGH THE IMPUGNED EMPLOYEES PROVI DENT FUND COMES UNDER THE FORMER PROVISION ONLY THE SAME IS APPLICABLE FROM 01-04-2021 ONWARDS. MEANING THEREBY THAT THE LEGISLATURE ITSELF HAS CONDONED THE IMPUGNED DEFAU LT BEFORE 01-04-2021. WE THUS DELETE THE IMPUGNED EMPLOYEES PROVIDENT FUND DISALLOWANCE OF RS.8 11 648/- FOR THIS PRECISE REASON ALONE. NECESSARY COMPUTATION TO FOLLOW AS PER LAW. NO OTHER GROUND HAS BEEN PRESSED BEFORE US. 6. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH MAY 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD DATED: 19-05-2021 TNMM ITA NO.2197/HYD/2017 :- 4 -: COPY TO : 1.VALUEMOMENTUM SOFTWARE SERVICES PRIVATE LIMITED PLOT NO.36 & 37 SURVEY NO.115/1 & 115/22 FINANCIAL DIS TRICT NANAKRAMGUDA VILLAGE GACHIBOWLI SERILINGAMPALLY HYDERABAD. 2.THE DY.COMMISSIONER OF INCOME TAX CIRCLE-17(2) HYDERABAD. 3.DISPUTE RESOLUTION PANEL (DRP) BENGALURU. 4.DIRECTOR OF INCOME TAX (IT & TP) HYDERABAD. 5.ADDL. COMMISSIONER OF INCOME TAX (TRANSFER PRICIN G) HYDERABAD. 6.D.R. ITAT HYDERABAD. 7.GUARD FILE.