DCIT, Bangalore V. M/s. Trilogy E-Business Software India P.Ltd, Bangalore

ITA 1173/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5522 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 26-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ETWA MUNDA
• Assessee Lawyers: H N KHINCHA
• Keywords: Transfer pricing
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH B BEFORE SHRI N BARADHVAJA SANKAR, VICE PRESIDENT AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1173 & 1174/BANG/2010 THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-12(4), BANGALORE. . APPELLANT VS. M/S TRILOGY E-BUSINESS SOFTWARE INDIA PVT. LTD., NO.97, 4 TH FLOOR, PATTAN HOUSE-2, KORAMANGALA INDUSTRIAL ESTATE, 5 TH BLOCK, 4 TH B CROSS, BLORE. . RESPONDENT APPELLANT BY : SHRI ETWA MUNDA RESPONDENT BY : SHRI H.N KHINCHA O R D E R PER SMT. P MADHAVI DEVI, JUDICIAL MEMBER THESE APPEALS ARE FILED BY THE REVENUE. THE APPEALS ARE DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX (APPEALS) AT BANGALORE DATED 11.08.2010. THE APPEA LS ARISE OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX A CT, 1961. ITA NO.1173 & 1174/B/10 2 2. IN BOTH THE APPEALS, THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN DIRECTING THE AO TO EXCLUDE TELECOMMU NICATION EXPENSES AND TRAVELING EXPENSES INCURRED IN FOREIGN CURRENCY FROM TOTAL TURNOVER ALSO FOR THE PURPOSE OF COMPUTING DE DUCTION U/S 10A OF THE INCOME-TAX ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY WHICH IS ENGAGED IN THE PROVISION OF SOFTWARE SERVI CES TO ITS ASSOCIATED ENTERPRISES OUTSIDE INDIA. DURING THE A SSESSMENT PROCEEDINGS U/S 143(3) OF THE INCOME-TAX ACT, THE A O HELD THAT FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 10A OF THE INCOME-TAX ACT, THE EXPORT TURNOVER SHOULD NOT INCLUDE TELECOMMUNIC ATION CHARGES, FREIGHT, INSURANCE AND TRAVELING EXPENSES IN FOREIG N CURRENCY.. HE ACCORDINGLY EXCLUDED THE SAME FROM THE EXPORT TURNO VER BUT RETAINED THE TOTAL TURNOVER AS-IT-IS WHILE COMPUTING DEDUCTI ON U/S 10A OF THE ACT. 4. AGGRIEVED BY THE SAME, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO AFTER CONSIDERING THE ASSESSEES SUB MISSIONS HELD THAT WHEN CERTAIN EXPENDITURE IS REDUCED FROM THE EXPORT TURNOVER, SIMILAR ADJUSTMENT HAS TO BE MADE IN THE TOTAL TURNOVER ALS O. FOR COMING TO ITA NO.1173 & 1174/B/10 3 THE CONCLUSION, HE FOLLOWED THE DECISION OF THE HON BLE CHENNAI SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., 313 ITR 353 (AT). 5. AGAINST THIS DIRECTION OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US FOR BOTH THE YEARS. 6. HAVING HEARD BOTH THE PARTIES AND HAVING CONSIDE RED THE MATERIAL ON RECORD, WE FIND THAT THE CIT(A) HAS ONL Y FOLLOWED THE DECISION OF THE SPECIAL BENCH IN THE CASE OF SAK SO FT LTD. CITED SUPRA AND THIS TRIBUNAL HAS ALSO BEEN RESPECTFULLY FOLLOW ING THE SAME IN A NUMBER OF CASES. SINCE THE ORDER OF THE CT(A) IS I N CONSONANCE WITH THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH JUN, 2011. SD/- SD/- (N BARADHVAJA SANKAR) (P MADHAVI DEVI) VICE PRESIDENT JUDICIAL MEMBER VMS. BANGALORE DATED : 30/06/2011 ITA NO.1173 & 1174/B/10 4 COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3.THE CIT CONCERNED. 4.THE CIT(A) CONCERNED. 5.DR 6.GF BY ORDER ASST. REGISTRAR, I TAT, BANGALORE.