Income Tax Appellate Tribunal Mumbai Micro Focus Software Inc. (Formerly ... vs The Dy Cit (Intl. ... on 14 June, 2023 IN THE INCOME TAX APPELLATE TRIBUNAL "I" BENCH, MUMBAI BEFORE SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI SANDEEP SINGH KARHAIL, JUDICIAL MEMBER ITA no.891/Mum./2023 (Assessment Year : 202021) Micro Focus Software Inc. (Formerly known as Novell Inc.) C/o Delloitte Haskins & Sells LLP Tower no.3, 28th Floor, One International ................ Appellant Centre, Senapati Bapat Marg Elphinstone Road (W), Mumbai 400 013 PAN AABCN5034F v/s Dy. Commissioner of Income Tax International Taxation, Circle3(2)(2) ................ Respondent Mumbai Assessee by : Shri Ketan Ved Revenue by : Shri Soumendu Kumar Dash Date of Hearing 08/06/2023 Date of Order 14/06/2023 ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned final assessment order dated 24/01/2023, passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961 ("the Act"), pursuant to the directions dated 29/12/2022, issued by the learned Dispute Resolution Panel ("learned DRP") under section 144C(5) of the Act, for the assessment year 202021. Micro Focus Software Inc. (Formerly known as Novell Inc.) ITA no.891/Mum./2023 2. In this appeal, the assessee has raised the following grounds: "The grounds hereinafter taken by the Appellant are without prejudice to one another. 1. That the order of the Learned Deputy Commissioner of Incometax, Circle 3(2)(2) International Taxation, Mumbai ["the learned Assessing Officer" or the "the learned AO"] passed pursuant to the directions of the learned Dispute Resolution Panel3 Mumbai ["the learned Panel" or "the learned DRP"] is bad in law and liable to be quashed. 2. Without prejudice to Ground No. 1, on the facts and in the circumstances of the case and in law, the learned AO/learned DRP erred in holding that Micro Focus Software India Private Limited ["MFSIPL"] (formerly known as 'Novell Software Development India Private Limited') is a Dependent Agency Permanent Establishment ["DAPE"] of Micro Focus Software Inc. ["MFSI"] (formerly known as Novell Inc.) in India by misinterpreting and misunderstanding the "Principal to Principal" arrangement between MFSI and MFSIPL under the Distribution Agreement and Bilateral Advance Pricing Agreement between India and USA ["BAPA"] and disregarding the arm's length arrangement between MFSI and MFSIPL. 3. Without prejudice to the Ground No. 1 and Ground No. 2 above, on the facts and in the circumstances of the case and in law, the learned AO/learned DRP erred in arriving at a conclusion that the Appellant has not provided copy of invoices raised by MFSIPL to third party customers to verify whether title of goods is transferred from MFSIPL to the customers as requested in notice dated 3 February 2022. However, the learned AO vide notice dated 3 February 2022 had requested to share the copy of invoices raised by MFSI on MFSIPL and not the invoices raised by MFSIPL on third party customers. 4. Without prejudice to Ground No. 1 to Ground No. 3, on the facts and in the circumstances of the case and in law, the learned AO/learned DRP erred in holding that the transaction of sale of software is not at arm's length as held in APA and therefore modified return was filed by MFSIPL and also erred in mentioning that BAPA is not binding on the assessment of the Appellant irrespective of the fact that MFSI is a covered entity as per BAPA However, MFSIPL and MFSI has reported the transaction as per agreed APA margin in the original return of income filed. The details were duly submitted during assessment proceedings. 5. Without prejudice to Ground No. 1 to Ground No. 4, on the facts and in the circumstances of the case and in law, the learned AO/learned DRP failed to appreciate the objective of a BAPA and has also misinterpreted the terms of the BAPA. 6. Without prejudice to the Ground No. 1 to Ground no. 5, on the facts and in the circumstances of the case and in law, the learned AO/ learned DRP erred in not following the favourable Tribunal ruling in the company's own case for AY 200607 to AY 200809 and AY 201415 to AY 201718 even though