Deputy Commissioner of Income tax, Bangalore V. Nuance Transcription Services I P L:td, Bangalore

ITA 1635/BANG/2014

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9756 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 23-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SHANKAR PRASAD K JT
• Assessee Lawyers: MRS SHREYA LOYALKA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ABRAHAM GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER ITA NOS. 1635 & 1636/BANG/2014 ASSESSMENT YEARS : 2005-06 & 2006-07 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(2), BANGALORE. VS. NUANCE TRANSCRIPTON SERVICES INDIA PVT. LTD., 4 TH FLOOR, 72/32, 10 GREEN LEAF LAYOUT, GROUND FLOOR, 80 FT. PERIPHERAL ROAD, KORMANGALA, BENGALURU 560 034. PAN: AAACF 3465F APPELLANT RESPONDENT APPELLANT BY : DR. SHANKAR PRASAD, K., JT. CIT(DR) RESPONDENT BY : MRS. SHREYA LOYALKA, CA DATE OF HEARING : 12.05.2015 DATE OF PRONOUNCEMENT : 15.05.2015 O R D E R PER GEORGE GEORGE K., JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E COMMON ORDER DATED 30.9.2014 OF THE CIT(APPEALS)-II, BANGALORE R ELATING TO ASSESSMENT YEARS 2005-06 & 2006-07. 2. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THESE APPEALS IS AS TO WHETHER THE CIT(APPEALS) WAS JUSTIFIED IN DIRECTING THE AO TO REDUCE THE EXPENDITURE INCURRED IN FOREIGN CURRENCY, BOTH FROM THE EXPORT TURNOVER AS ITA NOS. 1635 & 1636/BANG/2014 PAGE 2 OF 3 WELL AS TOTAL TURNOVER, FOR THE PURPOSE OF COMPUTAT ION U/S. 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 IN FOREIGN CURRENCY 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 APPEALS 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. WE ARE OF THE VIEW THAT AS OF TODAY, LAW DECLARED B Y THE HON'BLE HIGH COURT ITA NOS. 1635 & 1636/BANG/2014 PAGE 3 OF 3 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 APPEALS BY THE REVENUE ARE DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 15 TH DAY OF MAY , 2015 . SD/- SD/- ( ABRAHAM P. GEORGE ) ( GEORGE GE ORGE K. ) ACCOUNTANT MEMBER JUDI CIAL MEMBER BANGALORE, DATED, THE 15 TH MAY , 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.