DCIT, Bangalore V. M/s. McAfee Software India Pvt. Ltd, Bangalore

ITA 119/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63859 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SHRI N.K SAINI, ACCOUNTANT MEMBER AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO.119/B ANG/2011 (ASST. YEAR - 2006-07) THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-12(1), BANGALORE. . APPELLANT VS. M/S MCAFEE SOFTWARE IND. PVT. LTD., EMBASSY GOLF LINKS BUSINESS PARK, 2 ND FLOOR, PINE VALLEY, OFF INDIRANAGAR-KORAMANGALA INTERMEDIATE RING ROAD, BANGALORE-560 093. . RESPONDENT PAN NO.AABCN 3175H. APPELLANT BY : SHRI SATHYA SAI RATH RESPONDENT BY : NONE DATE OF HEARING : 26-12-2011 DATE OF PRONOUNCEMENT : 29-12-2011 O R D E R PER P MADHAVI DEVI, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) III ITA NO.119/B/11 2 AT BANGALORE DATED 18.10.2010. THE APPEAL ARISES O UT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX A CT, 1961. 2. IN THIS APPEAL, THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A) IN DIRECTING THE AO TO EXCLUDE THE TELECOMMU NICATION EXPENSES OF RS.2,64,88,172/- AND 30% OF FOREIGN TRA VEL EXPENSES AMOUNTING TO RS.49,86,253/- WHICH ARE INCURRED FOR DELIVERY OF SOFTWARE OUTSIDE INDIA FROM THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 10A OF THE INCOME-TAX ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF DESIGNING AND DEVELOPMEN T OF COMPUTER SOFTWARE AND TESTING OF COMPUTER SOFTWARE AND HARDW ARE PRODUCTS. FOR THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE FILE D ITS RETURN OF INCOME CLAIMING EXEMPTION U/S 10B OF THE INCOME-TAX ACT. WHILE COMPUTING EXEMPTION U/S 10A/B OF THE INCOME-TAX ACT , THE AO REDUCED THE TELECOMMUNICATION EXPENSES AND THE 30% OF FOREIGN TRAVEL EXPENSES INCURRED IN DELIVERY OF SOFTWARE OU TSIDE INDIA FROM THE EXPORT TURNOVER BUT DID NOT REDUCE THE SAME FROM TH E TOTAL TURNOVER. ITA NO.119/B/11 3 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE CIT(A) STATING THAT THE SAID EXPENSES ARE NOT TO BE EXCLUD ED FROM THE EXPORT TURNOVER. HE ALSO TOOK AN ALTERNATE PLEA THAT IF T HE SAME ARE TO BE EXCLUDED FROM THE EXPORT TURNOVER, THEN THEY SHOULD ALSO BE EXCLUDED FROM THE TOTAL TURNOVER AS HELD BY THE HONBLE CHEN NAI SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., 313 ITR 353 (AT). THE CIT(A) AFTER CONSIDERING THE ASSESSEES PLEA HELD THAT THE SAID EXPENSES ARE TO BE REDUCED FROM THE EXPORT TURNOVER. HOWEVER, HE ACCEP TED THE ALTERNATE PLEA THAT THE SAID EXPENSES ARE TO BE EXCLUDED FROM THE TOTAL TURNOVER ALSO. FOR COMING TO THIS CONCLUSION, HE FOLLOWED T HE DECISION OF HONBLE CHENNAI SPECIAL BENCH IN THE CASE OF SAK SO FT LTD., 313 ITR 353 (AT) 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 6. AFTER HEARING BOTH THE PARTIES AND AFTER CONSIDE RING THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT TH IS ISSUE IS COVERED IN FAVOR OF THE ASSESSEE NOT ONLY BY THE DECISION O F HONBLE CHENNAI SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., 313 ITR 353 (AT) AND BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CA SE OF M/S GEM PLUS JEWELLERY INDIA LTD, 2010-TIOL-456-HC-MUM-IT) BUT ALSO BY ITA NO.119/B/11 4 THE DECISION OF THE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. TATA ELXSI LTD. & OTHERS (2011-TIOL-684-HC-KAR-II. 7. IN VIEW OF THE SAME, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), WHICH IS IN CONSONANCE PRE CEDENTS ON THE ISSUE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29TH DEC, 2011. SD/- SD/- (N.K SAINI) (P MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER VMS. BANGALORE DATED : 29/12/2011 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.