Pr. Commissioner Of Income Tax - 7 vs M/S. Uae Exchange And Financial ...
2021 Latest Caselaw 1920 Kant

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     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

        DATED THIS THE 19TH DAY OF APRIL 2021

                         PRESENT

         THE HON'BLE MR. JUSTICE ALOK ARADHE

                            AND

         THE HON'BLE MR. JUSTICE M.G.S. KAMAL

                  I.T.A. NO.743 OF 2018

BETWEEN:

1.     PR. COMMISSIONER OF INCOME TAX-7
       BMTC COMPLEX
       KORMANGALA, BANGALORE.

2.     DEPUTY COMMISSIONER OF INCOME TAX
       CIRCLE-7(1)(1), BANGALORE.
                                           .... APPELLANTS
(BY MR. T.N.C. SRIDHAR, ADV., FOR
    MR. JEEVAN J. NEERALGI, ADV.,)


AND:

M/S. UAE EXCHANGE AND
FINANCIAL SERVICES LIMITED
NO.12 & 13, GROUND FLOOR
NORTH BLOCK, MANIPAL CENTRE
DICKENSEN ROAD
BANGALORE-560042
PAN:AAACU 2040F.
                                           ... RESPONDENT
(BY MR. CHYTHANYA K.K. ADV.,)

      THIS I.T.A. IS FILED UNDER SEC.260-A OF INCOME TAX
ACT 1961, ARISING OUT OF ORDER DATED 13.04.2018 PASSED
IN IT(TP)A NO.2788/BANG/2017, FOR THE ASSESSMENT YEAR
2013-14, PRAYING TO DECIDE THE FOREGOING QUESTION OF
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LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE
FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET
ASIDE THE APPELLATE ORDER DATED 13.04.2018 (ANNEXURE-A)
PASSED BY THE INCOME TAX APPELLATE TRIBUNA, 'B' BENCH,
BANGALORE, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE'S
CASE, IN APPEAL PROCEEDINGS IN IT(TP)A NO.278/BANG/2017
ASSESSMENT YEAR 2013-14 & GRANT SUCH OTHER RELIEF AS
DEEMED FIT, IN THE INTEREST OF JUSTICE.

     THIS I.T.A. COMING ON FOR HEARING,                   THIS     DAY,
ALOK ARADHE J., DELIVERED THE FOLLOWING:


                             JUDGMENT

Mr.T.N.C.Sridhar, learned counsel for the revenue.

Mr.Chythanya K.K., learned counsel for the assessee.

This appeal under Section 260A of the Income Tax Act,

1961 (hereinafter referred to as 'the Act' for short) has been

filed by the revenue against the order dated 13.04.2018

passed by the Income Tax Appellate Tribunal. The subject

matter of the appeal pertains to the Assessment Year 2013-

14. The appeal was admitted by a Bench of this Court vide

order dated 05.04.2021 on the following substantial

questions of law:

"(i) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in deleting the addition made of Rs.6,94,98,484/- by not upholding the assessing

officer's observation that no cushion of deviance of (+/-) 3% is available to the assessee on RBI rate?

(ii) Whether on the facts and in the circumstances of the case, the Tribunal order is perverse, not justified and bad in law in holding that RBI, which is rates fixed by the Reserve Bank of India, is the 'arithmetic mean' as provided for under section 92C(2) when in fact, RBI rate is not determined as 'arithmetic mean' by the TPO, as the RBI rate is just one price as determined by the Reserve Bank of India?

(iii) Whether on the facts and in the circumstances of the case, the Tribunal order is perverse, not justified and bad in law in holding that RBI rate is an average of different prices and therefore to be considered as arithmetic mean by TPO, when in fact RBI Rate is only the price determined by Reserve Bank of India and not the 'arithmetic mean' determined by TPO using the most appropriate method and therefore the variation of (+/-) 3% would not be allowable on RBI rates as per provisions of section 92C?

(iv) Whether on the facts and in the circumstances of the case, the Tribunal is correct

in applying first and second proviso to Section 92C of the Income-Tax Act, 1961 and allowing the benefit of +/- 3% range in the case where there is only one Reference Rate of RBI as a benchmarking rate for determining Arm's Length Price?

(v) Whether on the facts and in the circumstances of the case, the Tribunal is correct in going into the issue as how RBI decides a reference rate of price of a currency which was not an issue before the Tribunal?".

2. When the matter was taken up today, learned

counsel for the assessee submitted that the aforesaid

substantial questions of law have already been answered by

this Court in ITA No.73/2016 vide judgment dated

29.06.2018 against the revenue and in favour of the

assessee. The aforesaid submission could not be disputed by

the learned counsel for the revenue.

3. For the reasons assigned in the judgment dated

29.06.2018 passed in ITA No.73/2016, the substantial

questions of law are answered in favour of the assessee and

against the revenue.

In the result, the appeal fails and is hereby dismissed.

Sd/-

JUDGE

Sd/-

JUDGE

RV