- 1 - HC-KAR CNR: KAHC010205472020 NC: 2026:KHC:49260-DB ITA No. 5 of 2021 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF SEPTEMBER, 2026 PRESENT THE HON'BLE MR. JUSTICE S.G.PANDIT AND THE HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA INCOME TAX APPEAL NO. 5 OF 2021 BETWEEN: 1. PR. COMMISSIONER OF INCOME TAX-7 BMTC COMPLEX, KORAMANGALA, BANGALORE. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 14(5), BENGALURU. …APPELLANTS (BY SRI. SANMATHI E I., ADVOCATE A/W SRI. DILIP M., ADVOCATE) AND: M/S VERISIGN SERVICES INDIA PRIVATE LIMITED NO 52, 3RD FLOOR, 100 FT ROAD, KORMANGALA, BANGALORE - 560034. …RESPONDENT (BY SRI. T. SURYANARAYANA, SR. COUNSEL, FOR MISS. TANMAYEE RAJKUMAR, ADVOCATE) Digitally signed by AASEEFA PARVEEN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR CNR: KAHC010205472020 NC: 2026:KHC:49260-DB ITA No. 5 of 2021 THIS INCOME TAX APPEAL IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 15/11/2019 PASSED IN IT(TP)A NO.2532/BANG/2017, FOR THE ASSESSMENT YEAR 2010-2011 PRAYING TO DECIDE THE FOREGOING QUESTION OF 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 15/11/2019 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, A BENCH, BENGALURU, AS SOUGHT FOR, IN THE RESPONDENT-ASSESSEE'S CASE, IN APPEAL PROCEEDINGS NO. IT(TP)A NO. 2532/BANG/2017 (ANNEXURE- A) FOR A.Y.2010-2011. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MR. JUSTICE S.G.PANDIT and HON'BLE DR. JUSTICE CHILLAKUR SUMALATHA ORAL JUDGMENT (PER: HON'BLE MR. JUSTICE S.G.PANDIT) Heard Sri.E.I.Sanmathi, learned counsel for the appellants-revenue and learned Senior counsel Sri.T.Suryanarayana for Sri.Tanmayee Rajkumar for respondent-assessee. - 3 - HC-KAR CNR: KAHC010205472020 NC: 2026:KHC:49260-DB ITA No. 5 of 2021 2. The above appeal is filed questioning the order of ITAT dated 15.11.2019 in IT(TP)A No.2532/Bang/2017 for the assessment year 2010-2011. The above appeal was admitted on 10.06.2021 to examine the following three substantial questions of law: "(1) Whether on the facts and in the circumstances of the case, the Tribunal's order can be said as perverse in nature since Tribunal has directed the Transfer Pricing Officer/Assessing authority to exclude certain comparable's on basis of functional dissimilarity ad Turnover Filter even though the Transfer Pricing officer has chosen comparable's on basis of FAR analysis and in accordance with parameters set out Rule 10B of the I.T.Rules? (2) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to exclude comparable's namely, M/s.Infosys Ltd, M/s.Persistent Systems Ltd, M/s.Akshay Software Technologies Pvt. Ltd even though the said comparable's satisfied qualitative and quantitative filters applied by Transfer Pricing Officer? (3) Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the Transfer Pricing Officer to exclude Infosys Ltd as comparable on the basis of Turnover filter by even though the said comparable chose by the Transfer Pricing Officer is in accordance with parameter set out in Rule 10B(2) of I.T.Rules?" 3. At the outset, learned Senior Counsel Sri.T.Suryanarayana would submit that in view of the - 4 - HC-KAR CNR: KAHC010205472020 NC: 2026:KHC:49260-DB ITA No. 5 of 2021 decision of Co-ordinate Bench in ITA No.10/2011 and connected appeals dated 28.08.2026, the substantial questions of law raised in the present appeal would not remain for consideration. It is further submitted that the substantial questions are answered in favour of the respondent-assessee. 4. We have gone through the order of ITAT and appeal papers as well as the decision of the Co-ordinate Bench supra. With regard to substantial question Nos.1 and 3, the Co-ordinate Bench has held that adoption of upper turnover filter is rational and legally sustainable, as turnover, brand value, economies of scale, bargaining power and ownership of intangible materials influence comparability and profitability. In view of the above finding of the Co-Ordinate Bench, the finding of the Tribunal on the above questions cannot be said to be perverse. - 5 - HC-KAR CNR: KAHC010205472020 NC: 2026:KHC:49260-DB ITA No. 5 of 2021 5. Insofar as substantial question No.2 is concerned, the same is factual finding and in fact the Tribunal has rightly excluded comparables namely M/s.Infosys Technologies Limited and M/s.Persistent Systems Limited. From the order of the Tribunal, it is seen that the Tribunal has included the comparable of M/s.Akshay Software Technologies Limited and remanded the matter for reconsideration. The Tribunal at paragraph No.8 of its order has assigned reasons for comparables with regard to M/s.Infosys Technologies Limited and M/s.Persistent Systems Limited. With regard to inclusion of M/s. Akshay Software Technologies Limited, the Tribunal has recorded its reasons at paragraph No.9. Since the findings recorded by the Tribunal are factual findings and the same would not suffer from perversity, we are not inclined to interfere with the order passed by the ITAT. 6. Accordingly, appeal stands rejected. - 6 - HC-KAR CNR: KAHC010205472020 NC: 2026:KHC:49260-DB ITA No. 5 of 2021 7. The substantial questions of law are answered against the appellants-revenue and in favour of the respondent - assessee. Sd/- (S.G.PANDIT) JUDGE Sd/- (DR.CHILLAKUR SUMALATHA) JUDGE NS CT:TSM List No.: 1 Sl No.: 3