Madras High Court
Mps Technologies Limited vs The Assistant Commissioner Of on 23 February, 2021
TCA.No.81 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23.02.2021
CORAM :
The Honourable Mr.Justice T.S.SIVAGNANAM
and
The Honourable Ms.Justice R.N.MANJULA
Tax Case Appeal No.81 of 2018
MPS Technologies Limited,
(Since merged with MPS Limited)
27, G.N.Chetty Road, T.Nagar,
Chennai - 600 017. ...Appellant
Vs
The Assistant Commissioner of
Income Tax,
Company Circle - IV(3),
121, Mahatma Gandhi Road,
Nungambakkam, Chennai - 600 034. ...Respondent
APPEAL under Section 260A of the Income Tax Act, 1961 against the
order dated 14.02.2017 made in ITA.No.2031/Mds/2011 on the file of the
Income Tax Appellate Tribunal, 'D' Bench, Chennai for the assessment year
2007-08.
For Appellant: Mr.S.P.Chidambaram
For Respondent: Mr.R.Karthik Ranganathan
Senior Standing Counsel
1/6
https://www.mhc.tn.gov.in/judis/
TCA.No.81 of 2018
JUDGMENT
(Delivered by T.S.Sivagnanam,J)
This appeal, filed by the assessee, is directed against the order
dated 14.02.2017 made in ITA.No.2031/Mds/2011 on the file of the Income
Tax Appellate Tribunal, 'D' Bench, Chennai ('the Tribunal' for brevity) for
the assessment year 2007-08.
2. The appeal was admitted on 10.12.2018 on the following
substantial questions of law:
"i. Whether in the facts and circumstances of the
case and in law, the conclusion, drawn by the Tribunal
that the appellant is a KPO Company, is erroneous
being-
a) contrary to the definition of a KPO Company as
contemplated in Rule 10TA of the Rules;
b) contrary and inconsistent with the evidences on
record?
ii. Whether in the facts and circumstances of the
case and in law, the Tribunal was justified in not
appreciating that the functions performed by the
Appellant falls under the definition of a BPO as laid
down in Rule 10TA of the Rules?
iii. Whether in the facts and circumstances of the
case and in law, the Tribunal was in error in
upholding the inclusion of a KPO Company (Eclerx
Services Limited) as a comparable without
appreciating that Rule 10B(2) of the Rules mandates
only functionally similar companies to be selected as
comparable?
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TCA.No.81 of 2018
iv. Whether in the facts and circumstances of the
case and in law, the Tribunal was justified in
upholding the inclusion of Eclerx Services Limited
while not adjudicating on the specific ground raised
by the Appellant on the issue that Eclerx Services
Limited cannot be considered as a comparable as per
Rule 10B(2) of the Rules since it had abnormal growth
in revenue and extremely high profits?
v. Whether, having regard to the facts and
circumstances of the case and in law, in relation to the
arm's length price of an international transaction, that
is to be determined/quantified as per Rule 10B of the
Rules, an adjustment for start-up costs claimed by the
Appellant as per Rule 10B(i)(e) and Rule 10B(3) of the
Rules, is legally warranted, under TNMM?"
3. We have heard Mr.S.P.Chidambaram, learned counsel for the
appellant and Mr.R.Karthik Ranganathan, learned Senior Standing Counsel
appearing for the respondent-Revenue.
4. The learned counsel for the appellant-assessee submits that the
appellant-assessee has already filed the declaration/undertaking under the
Vivad Se Vishwas Scheme on 29.01.2021 and is awaiting orders to be
passed in Form No.3.
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TCA.No.81 of 2018
5. In the light of the subsequent event, the Competent Authority
shall process the application/declaration in accordance with the Direct Tax
Vivad Se Vishwas Act, 2020 (Act 3 of 2020) and pass appropriate orders as
expeditiously as possible. The assessee is given liberty to restore this appeal
in the event the ultimate decision to be taken on the declaration filed by the
assessee under Section 4 of the said Act is not in favour of the assessee. If
such a prayer is made, the Registry shall entertain the prayer without
insisting upon any application to be filed for condonation of delay in
restoration of the appeal and on such request made by the assessee by filing
a miscellaneous petition for restoration, the Registry shall place such
petition before the appropriate Division Bench for orders.
6. The tax case appeal stands disposed of with the aforementioned
liberty and consequently, the substantial questions of law framed are left
open. No costs.
(T.S.S.,J.) (R.N.M.,J.)
23.02.2021
Index:Yes/No
Internet:Yes/No
hvk
https://www.mhc.tn.gov.in/judis/
TCA.No.81 of 2018
To
1. The Income Tax Appellate Tribunal,
'D' Bench, Chennai.
2. The Assistant Commissioner of
Income Tax,
Company Circle - IV(3),
121, Mahatma Gandhi Road,
Nungambakkam, Chennai - 600 034.
https://www.mhc.tn.gov.in/judis/
TCA.No.81 of 2018
T.S.SIVAGNANAM,J
AND
R.N.MANJULA,J
hvk
TCA.No.81 of 2018
23.02.2021
https://www.mhc.tn.gov.in/judis/
