M/s. Health Asyst Pvt. Ltd., Bangalore V. ITO, Bangalore

ITA 1301/BANG/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5518 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 24-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JACINTA ZIMIK VASHAI
• Assessee Lawyers: B M TAMBAKAD
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A BEFORE SMT. P MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1301/ BANG/2010 (ASST. YEA R 2006-07) THE HEALTH ASYST PVT. LTD., LAKSHMI NARAYAN COMPLEX, 10/1, PALACE ROAD, BANGALORE-560 052. . APPELLANT VS. THE INCOME-TAX OFFICER, WARD-11(2), BANGALORE. . RESPONDENT APPELLANT BY : SHRI B.M TAMBAKAD RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI O R D E R PER SMT. P MADHAVI DEVI, JUDICIAL MEMBER THIS APPEAL IS FILED BY THE ASSESSEE. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) AT BANGALORE DATED 26.08.2010. THE APPEAL ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961. ITA NO.1301/B/10 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEA L IS AGAINST THE ORDER OF THE CIT(A) IN CONFIRMING THE ORDER OF THE AO IN EXCLUDING THE TOTAL TELECOMMUNICATION CHARGES AMOUNTING TO RS .9,64,903/- FROM THE EXPORT TURNOVER ONLY WHILE MAKING NO ADJUSTMENT TO THE TOTAL TURNOVER IN COMPUTING THE DEDUCTION U/S 10A OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF COMPUTER SOFTWA RE SERVICES. IT IS ALSO ELIGIBLE FOR DEDUCTION U/S 10A OF THE INCOME-T AX ACT. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3), THE AO FOUND THA T THE ASSESSEE HAS SPENT RS.12,86,538/- ON INTERNET CHARGES. HE, THER EFORE REDUCED 75% OF THE SAME I.E RS.9,64,903/- FROM THE EXPORT TURNO VER ONLY WHILE COMPUTING THE DEDUCTION U/S 10A OF THE INCOME-TAX A CT. 4. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APP EAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO AND THE AS SESSEE IS IN SECOND APPEAL BEFORE US. 5. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, WHILE THE LEARNE D DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ITA NO.1301/B/10 3 6. HAVING HEARD BOTH THE SIDES AND HAVING CONSIDERE D THE MATERIAL ON RECORD, WE FIND THAT THIS ISSUE HAS BEEN CONSIDE RED BY THE HONBLE CHENNAI SPECIAL BENCH OF THE TRIBUNAL IN THE CASE O F SAK SOFT LTD., 313 ITR 353 (AT), WHEREIN THE SPECIAL BENCH HAS HE LD THAT BOTH THE NUMERATOR AND THE DENOMINATOR MUST CONTAIN THE SAME COMPONENTS AND WHEN CERTAIN EXPENDITURE IS EXCLUDED FROM THE E XPORT TURNOVER, THEN IT HAS TO BE EXCLUDED FROM THE TOTAL TURNOVER ALSO. THIS BENCH HAS BEEN REGULARLY FOLLOWING THE SAID DECISION AND FURTHER, AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE, THIS I SSUE IS ALSO COVERED BY THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S GEM PLUS JEWELLERY INDIA LTD., 330 ITR 175. 7. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE A O TO EXCLUDE INTERNET EXPENSES FROM THE TOTAL TURNOVER ALSO WHIL E COMPUTING DEDUCTION U/S 10A OF THE ACT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.1301/B/10 4 ORDER PRONOUNCED IN THE OPEN COURT ON 5TH JUL, 2011. SD/- (P MADHAVI DEVI) JUDICIA L MEMBER VMS. BANGALORE DATED : 05/07/2011 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.