DCIT, Bangalore V. M/s Ocwen Financial Solutions Pvt. Ltd., Bangalore

ITA 1178/BANG/2012

• Counselvise Citation: 117821114 RSA 2012
• Duration Of Justice: 2 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 12-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA JT
• Assessee Lawyers: MANOJ SHENOY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO. 1178/BANG/2012 ASSESSMENT YEAR : 2008-09 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(2), BANGALORE. VS. M/S. OCWEN FINANCIAL SOLUTIONS PVT. LTD., 7 TH FLOOR OF WING A & 5 TH FLOOR OF WING B, BLOCK NO.12, PRITECH PARK SEZ, SURVEY NO.51-64/4, BELLANDUR VILLAGE, SARJAPUR MARATHAHALLI ORR, BENGALURU 560 103. PAN: AAACO 3764E APPELLANT RESPONDENT APPELLANT BY : SHRI SUNIL KUMAR AGARWALA, JT. CIT(DR) RESPONDENT BY : SHRI MANOJ SHENOY, CA DATE OF HEARING : 10.08.2015 DATE OF PRONOUNCEMENT : 14.08.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER D ATED 06.07.2012 OF THE CIT(APPEALS)-III, BANGALORE RELATING TO ASSE SSMENT YEAR 2008-09. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THIS APPEAL IS AS TO WHETHER THE CIT(APPEALS) WAS JUSTIFIED IN DIRECTING THE AO TO EXCLUDE TRAVEL EXPENSES OF RS.4,77,02,200 INCURRED IN FOREIGN CURR ENCY AND LEASE LINE ITA NO. 1178/BANG/2012 PAGE 2 OF 3 CHARGES OF RS.3,03,43,321 FROM THE EXPORT TURNOVER, WITHOUT REDUCING THE SAME FROM THE TOTAL TURNOVER ALSO, WHILE COMPUTING DEDUCTION U/S. 10A OF THE ACT. 3. ACCORDING TO THE AO, AS PER THE DEFINITION OF EX PORT TURNOVER GIVEN IN CLAUSE (IV) TO EXPLANATION 2, THE EXPENSES INCURRED FOR FREIGHT EXPENSES ATTRIBUTABLE TO THE DELIVERY OF THE PRODUCT OR SOFT WARE OUTSIDE INDIA SHOULD BE REDUCED FROM THE EXPORT TURNOVER. HOWEVER, THE PROVISIONS OF SECTION 10A DO NOT PROVIDE FOR EXCLUSION OF SUCH EXPENDITUR E FROM TOTAL TURNOVER. IN THE ABSENCE OF A DEFINITION FOR TOTAL TURNOVER IN S ECTION 10A, THE NORMAL DEFINITION OF TOTAL TURNOVER HAS TO BE ADOPTED AND AS SUCH THE EXPENSES WHICH ARE REDUCED FROM THE EXPORT TURNOVER IN ACCOR DANCE WITH THE SPECIFIC DEFINITION CANNOT BE REDUCED FROM THE TOTAL TURNOVE R. 4. ON APPEAL BY THE ASSESSEE, THE CIT(APPEALS) FOLL OWING THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. TATA ELXSI LTD., 349 ITR 98 (KARN) , HELD THAT WHATEVER IS EXCLUDED FROM THE EXPORT TURNOVER, HAS ALSO TO BE EXCLUDED FROM THE TOTAL TU RNOVER. 5. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE DE CISION OF HON'BLE HIGH COURT OF KARNATAKA IN TATA ELXSI (SUPRA) HAS NOT ATTAINED FINALITY AND A SLP BY THE DEPARTMENT IS PENDING BEFORE THE HON'B LE SUPREME COURT. ITA NO. 1178/BANG/2012 PAGE 3 OF 3 WE ARE OF THE VIEW THAT AS OF TODAY, LAW DECLARED B Y THE HON'BLE HIGH COURT OF KARNATAKA WHICH IS THE JURISDICTIONAL HIGH COURT IS BINDING ON US. WE THEREFORE HOLD THAT THE ORDER OF CIT(A) DOES NOT CA LL FOR ANY INTERFERENCE AND ACCORDINGLY THE SAME IS CONFIRMED. 7. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS 14 TH DAY OF AUGUST , 2015 . SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIA L MEMBER BANGALORE, DATED, THE 14 TH AUGUST , 2015 . /D S/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR/ SENIOR PRIVATE SECRETARY ITAT, BANGALORE.