THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. No. 660 of 2014 DATED:28.11.2014 Between:
Commissioner of Income Tax-III, Hyderabad.
And M/s. Sumtotal Systems India Pvt. Ltd., Hyderabad.
… Appellant ….Respondent THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE SANJAY KUMAR I.T.T.A. NO.660 OF 2014
Judgment: (per Hon’ble Sri Justice Sanjay Kumar)
This appeal by the Revenue arises in the context of the assessment year 2007-2008 and seeks to raise the following suggested substantial questions of law:
1. Whether on the facts and circumstances of the case, the Hon’ble Tribunal (ITAT) was justified in rejecting comparable companies on the ground of exceptionally large scale of operations and thereby ignoring the fact that high or low turn over do not influence the profit margins ?
2. Whether in the facts and circumstances of the case, the order of the Hon’ble Tribunal (ITAT) was not perverse so far as deleting Ishir Infotech as comparables ignoring the fact that the said company satisfies the employee cost filter ?
3. Whether in the facts and circumstances of the case, the Hon’ble Tribunal (ITAT) is correct in deleting the comparable on functional difference ground ignoring the information obtained under Section 133(6) of the Act and also not giving opportunity to Transfer Pricing Officer (TPO) to examine the new facts, brought for the first time before the Hon’ble Tribunal (ITAT) ?
Perusal of the order under appeal, however, reflects that in so far as the first question of law is concerned, the Tribunal dealt at length with each of such companies and found on the basis of earlier Tribunal decisions that the companies were not comparable to the assessee. These findings purely turned on fact and no question of law, much less a substantial question of law, arises for consideration.
Further, the second question of law sought to be raised seeks to assail the finding as perverse. Nothing is placed on record to show that the earlier Tribunal decisions which were relied upon were set at naught. We therefore find no reason to interfere in so far as this issue is concerned.
As regards the third substantial question of law, we find that the Tribunal relied on the judgment of the High Court in Gemplus Jewellery reported in 330 ITR 175 and the Special Bench decision of the Income Tax Appellate Tribunal at Chennai in ITO vs. Sac Soft Limited [313 (AT) 353].
We therefore find no reason to interfere with the order under appeal. The appeal is devoid of merits and is accordingly dismissed.
Pending miscellaneous applications shall stand closed. No order as to costs.
K.J. SENGUPTA, CJ 28th November, 2014 Pnb SANJAY KUMAR, J