TMI Blog2018 (12) TMI 1216X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise has been undertaken by the assessing authority, the case calls for a remand. See Commissioner of Income Tax & Anr. Vs. Microlabs Ltd., [2016 (4) TMI 219 - KARNATAKA HIGH COURT]. Also this court in a recent judgment in Principal CIT v. Softbrands India P. Ltd. [2018 (6) TMI 1327 - KARNATAKA HIGH COURT] has held that in these types of cases, unless an ex facie perversity in the findings of the learned Income-tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under section 260A of the Act is not maintainable. - decided in favour of assessee. - I. T. A. No. 495 of 2017. - - - Dated:- 28-8-2018 - Dr. Vineet Kothari And Mrs. S. Sujatha JJ. For the Appellants : Dilip for K. V. Aravind , Advocates For the Respondent : Sandeep Huilgol for T. Suryanarayana , Advocates JUDGMENT MRS. S. SUJATHA J.- 1. The appellants-Revenue have filed this appeal under section 260A of the Income-tax Act, 1961, raising purportedly certain substantial questions of law arising from the order of the Income-tax Appellate Tribunal, A Bench, Bangalore, dated January 6, 2017, passed in IT(TP) A No. 267/Bang/2015 (Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law No. 1 : 13. We have heard rival submissions. The fact remains that the assessee's investment as on March 31, 2009, was at ₹ 1,51,46,000 which remained so as on March 31, 2010, also. It responded to the Assessing Officer saying that it has not earned any exempt income, no expenditure is incurred in relation to tax exempt investments and hence, disallowance under section 14A read with rule 8D is not war ranted. Neither the Assessing Officer nor the DRP recorded specific finding as to whether the assessee incurred specific expenditure(s) or not. There is not even an attempt to say what has happened on this issue in the earlier year(s) or in the subsequent year(s). In view of the facts and circumstances, the impugned addition is deleted and the corresponding appeal ground is allowed. 4. The controversy involved regarding this issue is squarely covered by the recent judgment of this court in ITA No. 342 of 2016, dated June 12, 2018, in the case of Principal CIT v. Advaith Motors P. Ltd. [2018] 12 ITR-OL 157 (Karn) whereby considering the arguments of both learned counsel appearing for the parties, it has been held that no substantial question of law was required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. A. No. 330 of 2012, judgment dated July 23, 2014 - [2014] 366 ITR 505 (Bom). When the issue is already covered by a decision of the High Court of Bombay with which we concur, we do not find any substantial question of law would arise for consideration as canvassed. In view of the above observations, the appeal is dismissed.' (ii) Pragathi Krishna Gramin Bank v. Joint CIT [2018] 12 ITR-OL 73 (Karn) (ITA Nos. 100001 of 2018 and 100002 of 2018 decided by the Division Bench of this court at Dharwad Bench (in which, one of us, justice Dr. Vineet Kothari was a party) also, the court held in favour of the assessee in the following terms (page 79 of 12 ITR-OL) : 'The manner in which the aforesaid disallowance has been made by the assessing authority and has been upheld by the appellate authorities leaves much to be desired and the same cannot be sustained and therefore the matter deserves to be remanded back to the assessing authority. We make it clear that the expenditure for earning exempted income has to have a reasonable proportion to the income so earned, going by the common financial prudence. Therefore, even if the assessing authority has to make an estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the TPO has applied export filter of 75 per cent. for both software and ITES segment in the assessment year 2008-09, he has to be consistent, the DRP also upheld 75 per cent. export filter in the assessment year 2009-10, etc. We have considered the rival submissions, gone through relevant orders, material and find that the DRP's above decision to exclude ICRA online Ltd. and Infosys BPO Ltd., as a comparable is justified on the basis of the ratios of the cases relied on supra, and hence confirm it. On Mircroland Ltd., the authorised representative submitted that the DRP, suomotu, directed the TPO to exclude it as a comparable. It is submitted that export information for the said company is available which is more than 75 per cent. of the total revenue. The segment information for the ITES services is also available in the audited financial statement which should also be considered for the inclusion and relied on the case law reported in ISG Novasoft Technologies Ltd. in ITA No. 185(B)/2015, the assessment year 2010-11 (Bangalore ITAT). The relevant portion of that order is extracted as under : . . . Following the above decision, we set aside the directions of the DRP in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he comparable selected by the TPO. In this regard, the DRP has held as under : . . . The assessee relied on the decision of this Tribunal in Moong Controls India P Ltd., ITA No. 551/Bang/2015 assessment year 2009- 10, dated November 27, 2015, wherein this Tribunal directed the TPO to allow actual adjustment towards the differences in the working capital position between the assessee and the entrepreneurial companies selected as comparable. We direct the TPO to follow this decision. Thus the Revenue's appeal ground Nos. 5 and 6 are dismissed. 5. However, this court in a recent judgment in ITA No. 536 of 2015 connected with ITA No. 537 of 2015 delivered on June 25, 2018 (Principal CIT v. Softbrands India P. Ltd. [2018] 406 ITR 513 (Karn)) has held that in these types of cases, unless an ex facie perversity in the findings of the learned Income-tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue under section 260A of the Act is not maintainable. 6. The relevant portion of the said judgment is quoted below for ready reference (page 541 of 406 ITR) : Conclusion A substantial quantum of international trade ..... X X X X Extracts X X X X X X X X Extracts X X X X
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