JCIT, Bangalore V. Secon Private Limited, Bangalore

ITA 188/BANG/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63699 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income
• Section: 143(3); 80HHC; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BANGALORE BANGALORE BANGALORE BENCH BENCH BENCH BENCH A AA A BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI GEORGE GEORGE K, JUDICIAL MEMBER GEORGE GEORGE K, JUDICIAL MEMBER GEORGE GEORGE K, JUDICIAL MEMBER GEORGE GEORGE K, JUDICIAL MEMBER A AA AND NDND ND SHRI SHRI SHRI SHRI JASON P. BOAZ, ACCOUNTANT MEMBER JASON P. BOAZ, ACCOUNTANT MEMBER JASON P. BOAZ, ACCOUNTANT MEMBER JASON P. BOAZ, ACCOUNTANT MEMBER ITA NO.188/BANG/2012 (ASSESSMENT YEAR: 2008-09) JOINT COMMISSIONER OF INCOME-TAX(OSD), CIRCLE 12(3), BANGALORE. VS. APPELLANT M/S.SECON PVT. LTD. PLOT NO.147, 7B ROAD, EPIP, WHITEFIELD, BANGALORE-560062. AAECS6269A RESPONDENT CROSS OBJECTION NO.59/BANG/2012 (IN ITA NO.188/BANG/2012) (ASSESSMENT YEAR: 2008-09) (BY THE ASSESSEE) REVENUE BY: SHRI S.K.AMBASTHA, CIT-I. ASSESSEE BY : SHRI K.K.CHYTHANYA, ADVOCATE DATE OF HEARING: 27-09-2012 DATE OF PRONOUNCEMENT: 27-09-2012 O R D E R O R D E R O R D E R O R D E R PER PER PER PER GEORGE GEORGE, K, JM: GEORGE GEORGE, K, JM: GEORGE GEORGE, K, JM: GEORGE GEORGE, K, JM: THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE CIT( A)-III, BANGALORE, DATED 29-11-2011. THE RELEVANT ASSESSMEN T YEAR IS 2008-09. ITA 188 & CO 59/BANG/2012 PAGE 2 OF 9 2. WE SHALL FIRST CONSIDER THE REVENUES APPEAL IT A REVENUES APPEAL ITA REVENUES APPEAL ITA REVENUES APPEAL ITA NO.188/BANG/2012 NO.188/BANG/2012 NO.188/BANG/2012 NO.188/BANG/2012: IN THIS APPEAL, THE SOLITARY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE CIT(A) IS JUST IFIED IN DIRECTING TO EXCLUDE DESIGN AND PROJECT EXPENSES IN CURRED IN FOREIGN CURRENCY AMOUNTING TO `9,13,60,248/- TO BE EXCLUDED FROM THE EXPORT TURNOVER AS WELL AS TOTAL TURNOVER WHILE CALCULATING DEDUCTION U/S 10A OF THE INCOME-TAX ACT , 1961 [HEREINAFTER REFERRED TO AS 'THE ACT'] 3. BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE AS SESSEE IS A PRIVATE LIMITED COMPANY. IT IS 100% EXPORT ORIENTED UNDERTAKING ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT. F OR THE ASSESSMENT YEAR 2008-09, RETURN OF INCOME WAS FILED ON 29-9-2009 DECLARING A TOTAL INCOME OF `12,91,44,760 /- AFTER CLAIMING DEDUCTION U/S 10B OF THE ACT AMOUNTING TO `9,86,77,573/-. THE CASE OF THE ASSESSEE WAS SELECT ED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) OF THE ACT A ND THE ASSESSMENT U/S 143(3) WAS COMPLETED BY ORDER DATED 31-12-2010. IN THE SAID ORDER, THE AO RECOMPUTED T HE DEDUCTION U/S 10A BY EXCLUDING THE SUM OF `9,13,60, 248 INCURRED IN FOREIGN CURRENCY RELATING TO DESIGN AND OTHER PROJECT EXPENSES FROM THE EXPORT TURNOVER. HOWEVER, THE AO DID NOT EXCLUDE THE SAME FROM THE TOTAL TURNOVER. AS A RES ULT OF RE- COMPUTATION, ACCORDING TO THE AO, THERE WAS EXCESS CLAIMED BY THE ASSESSEE U/S 10B OF THE ACT TO THE TUNE OF `2,4 9,86,107/-. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE ASSESSEE SUBMITTED BEFORE THE FIRST APPELLATE A UTHORITY THAT ITA 188 & CO 59/BANG/2012 PAGE 3 OF 9 A SUM OF `9,13,60,248 INCURRED IN FOREIGN CURRENCY RELATING TO DESIGN AND OTHER PROJECT EXPENSES OUGHT NOT TO HAVE BEEN EXCLUDED FROM THE EXPORT TURNOVER WHILE COMPUTING D EDUCTION U/S 10A OF THE ACT. ALTERNATIVELY IT WAS SUBMITTED THAT IF THE ABOVE SAID EXPENSES ARE REDUCED FROM THE EXPORT TUR NOVER, THE SAME OUGHT TO HAVE BEEN REDUCED ALSO FROM THE TOTAL TURNOVER WHILE COMPUTING DEDUCTION U/S 10A OF THE ACT. THE CIT(A), PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND DIREC TED THE AO TO EXCLUDE A SUM OF `9,13,60,248 INCURRED IN FOREIG N CURRENCY RELATING TO DESIGN AND OTHER PROJECT EXPENSES BOTH FROM THE EXPORT TURNOVER AS WELL AS FROM TOTAL TURNOVER WHIL E COMPUTING DEDUCTION U/S 10A OF THE ACT. THE ASSESSEES MAIN GROUND VIZ., THE ABOVE SAID EXPENDITURE OUGHT NOT TO HAVE BEEN R EDUCED FROM THE EXPORT TURNOVER WAS REJECTED BY THE FIRST APPELLATE AUTHORITY. 5. THE REVENUE, BEING AGGRIEVED BY THE DIRECTION O F THE CIT(A) TO EXCLUDE THE ABOVE SAID EXPENSES BOTH FROM THE EXPORT TURNOVER AS WELL AS FROM TOTAL TURNOVER, IS IN APPE AL BEFORE US WHEREAS THE ASSESSEE IS IN CROSS OBJECTION AGAINST REJECTION OF THE ASSESSEES PLEA NOT TO EXCLUDE THE EXPENSES OF `9,13,60,248 INCURRED IN FOREIGN CURRENCY FROM THE EXPORT TURNOV ER WHILE CALCULATING DEDUCTION U/S 10A OF THE ACT. 6. AT THE OUTSET, IT WAS STATED BY THE LEARNED COU NSEL FOR THE ASSESSEE THAT THE ISSUE WHETHER THE SUM OF `9,1 3,60,248 INCURRED IN FOREIGN CURRENCY RELATING TO DESIGN AND OTHER PROJECT EXPENSES ARE TO BE EXCLUDED BOTH FROM THE EXPORT TU RNOVER AS ITA 188 & CO 59/BANG/2012 PAGE 4 OF 9 WELL AS FROM TOTAL TURNOVER IS SQUARELY COVERED BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V M/S TATA ELXSI LTD. & OTHERS (2011-TIOL-684-HC-KAR-II), HON BLE MUMBAI HIGH COURT IN THE CASE OF CIT V GEM PLUS JEWELLERY INDIA LTD. REPORTED IN 330 ITR 175 AND THE ORDER OF THE SPECIA L BENCH IN THE CASE OF ITO V M/S SAK SOFT LTD. REPORTED IN 313 ITR (AT) 353 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE PRESENT WAS DULY HEARD. 8. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL ON RECORD. THE HONBLE KARNATAKA HIGH CO URT IN THE CASE OF CIT V M/S TATA ELXSI LTD. & OTHERS HAD HELD THAT WHILE COMPUTING THE EXEMPTION U/S 10A, IF THE EXPORT TURN OVER IN THE NUMERATOR IS TO BE ARRIVED AT AFTER EXCLUDING CERTA IN EXPENSES, THE SAME SHOULD ALSO BE EXCLUDED FROM THE TOTAL TUR NOVER IN THE DENOMINATOR. THE RELEVANT FINDING OF THE HONBLE JU RISDICTIONAL HIGH COURT READS AS FOLLOWS:- ..SECTION 10A IS ENACTED AS AN INCENTIVE TO EXPORTERS TO ENABLE THEIR PRODUCTS TO BE COMPETITIVE IN THE GLOBAL MARKET AND CONSEQUENTLY EARN PRECIOUS FOREIGN EXCHANGE FOR THE COUNTRY. THIS ASPECT HAS TO BE BORNE IN MIND. WHILE COMPUTING THE CONSIDERATION RECEIVED FROM SUCH EXPORT TURNOVER, THE EXPENSES INCURRED TOWARDS FREIGHT, TELECOMMUNICATION CHARGES, OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF THE ARTICLES OR THI NGS OR COMPUTER SOFTWARE OUTSIDE INDIA, OR EXPENSES IF ANY INCURRED IN FOREIGN EXCHANGE, IN PROVIDING THE TECHNICAL SERVICES OUTSIDE INDIA SHOULD NOT BE INCLUDED. HOWEVER, THE WORD TOTAL TURNOVER IS NOT DEFINED FOR THE PURPOSE OF THIS SECTION. IT IS BECAUSE OF THIS OMISSION TO DEFINE TOTAL TURNOVER , THE WORD TOTAL TURNOVER FALLS FOR INTERPRETATION BY THIS COURT; ITA 188 & CO 59/BANG/2012 PAGE 5 OF 9 ..IN SECTION 10A, NOT ONLY THE WORD TOTAL TURNOVER IS NOT DEFINED, THERE IS NO CLUE REGARDIN G WHAT IS TO BE EXCLUDED WHILE ARRIVING AT THE TOTAL TURNOVER. HOWEVER, WHILE INTERPRETING THE PROVISIONS OF SECTION 80HHC, THE COURTS HAVE LAID DOWN VARIOUS PRINCIPLES, WHICH ARE INDEPENDENT OF THE STATUTORY PROVISIONS. THERE SHOULD BE UNIFORMITY IN THE INGREDIENTS OF BOTH THE NUMERATOR AND THE DENOMINATOR OF THE FORMULA, SINCE OTHERWISE IT WOULD PRODUCE ANOMALIES OR ABSURD RESULTS. SECTION 10A IS A BENEFICIAL SECTION WHICH INTENDS TO PROVIDE INCENTIVES TO PROMOTE EXPORTS. IN THE CASE OF COMBINED BUSINESS OF AN ASSESSEE, HAVING EXPORT BUSINESS AND DOMESTIC BUSINESS, THE LEGISLATURE INTENDED TO HAVE A FORMULA TO ASCERTAIN THE PROFITS FROM EXPORT BUSINESS BY APPORTIONING THE TOTAL PROFITS OF THE BUSINESS ON THE BASIS OF TURNOVERS. APPORTIONMENT OF PROFITS ON THE BASIS O F TURNOVER WAS ACCEPTED AS A METHOD OF ARRIVING AT EXPORT PROFITS. IN THE CASE OF SECTION 80HHC, THE EXPORT PROFIT IS TO BE DERIVED FROM THE TOTAL BUSINESS INCOME OF THE ASSXCESSEE, WHEREAS IN SECTION 10-A, THE EXPORT PROFIT IS TO BE DERIVED FR OM THE TOTAL BUSINESS OF THE UNDERTAKING. EVEN IN THE CASE OF BUSINESS OF AN UNDERTAKING, IT MAY INCLUDE EXPORT BUSINESS AND DOMESTIC BUSINESS, IN OTHER WORDS, EXPORT TURNOVER AND DOMESTIC TURNOVER. TO THE EXTENT OF EXPORT TURNOVER, THERE WOULD BE A COMMONALITY BETWEEN THE NUMERATOR AND THE DENOMINATOR OF THE FORMULA. IF THE EXPORT TURNOVER IN THE NUMERATOR IS TO BE ARRIVED AT AFTER EXCLUDIN G CERTAIN EXPENSES, THE SAME SHOULD ALSO BE EXCLUDED IN COMPUTING THE EXPORT TURNOVER AS A COMPONENT OF TOTAL TURNOVER IN THE DENOMINATOR. THE REASON BEING THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER. THE COMPONENTS OF THE EXPORT TURNOVER IN THE NUMERATOR AND THE DENOMINATOR CANNOT BE DIFFERENT. THEREFORE, THOUGH THERE IS NO DEFINITIO N OF THE TERM TOTAL TURNOVER IN SECTION 10A, THERE IS NOTHING IN THE SAID SECTION TO MANDATE THAT, WHAT I S EXCLUDED FROM THE NUMERATOR THAT IS EXPORT TURNOVER WOULD NEVERTHELESS FORM PART OF THE DENOMINATOR. WHEN THE STATUTE PRESCRIBED A FORMULA AND IN THE SAID FORMULA, EXPORT TURNOVER IS DEFINED, AND WHEN THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER, THE VERY SAME MEANING GIVEN TO THE EXPORT TURNOVER BY THE LEGISLATURE IS TO BE ADOPTED WHILE UNDERSTANDING THE MEANING OF THE TOTAL TURNOVER, WHEN THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER. IF WHAT IS EXCLUDED IN COMPUTING THE EXPORT TURNOVER IS INCLUDED WHILE ARRIVING AT T HE ITA 188 & CO 59/BANG/2012 PAGE 6 OF 9 TOTAL TURNOVER, WHEN THE EXPORT TURNOVER IS A COMPONENT OF TOTAL TURNOVER, SUCH AN INTERPRETATION WOULD RUN COUNTER TO THE LEGISLATIVE INTENT AND IMPERMISSIBLE. THUS, THERE IS NO ERROR COMMITTED BY THE TRIBUNAL IN FOLLOWING THE JUDGEMENTS RENDERED IN THE CONTEXT OF SECTION 80HHC IN INTERPRETING SECTION 10A WHEN THE PRINCIPLE UNDERLYING BOTH THESE PROVISIONS IS ONE AND THE SAME. 8.1 THE HONBLE MUMBAI HIGH COURT IN THE CASE OF G EM PLUS JEWELLERY INDIA LTD. (SUPRA), IN IDENTICAL CIR CUMSTANCES, HELD THAT SINCE THE EXPORT TURNOVER FORMS PART OF THE TO TAL TURNOVER, IF AN ITEM IS EXCLUDED FROM THE EXPORT TURNOVER, THE S AME SHOULD ALSO BE REDUCED FROM THE TOTAL TURNOVER TO MAINTAIN PARITY BETWEEN NUMERATOR AND DENOMINATOR WHILE CALCULATING DEDUCTION U/S 10A OF THE ACT. THE RELEVANT FINDING OF THE HONBLE MUMBAI HIGH COURT READS AS FOLLOWS:- THE TOTAL TURNOVER OF THE BUSINESS CARRIED ON BY T HE UNDERTAKING WOULD CONSIST OF THE TURNOVER FROM EXPO RT AND THE TURNOVER FROM LOCAL SALES. THE EXPORT TURNOVER CONSTITUTES THE NUMERATOR IN THE FORMULA PRESCRIBED BY SUB-SECTION (4). EXPORT TURNOVER ALS O FORMS A CONSTITUENT ELEMENT OF THE DENOMINATOR IN A S MUCH AS THE EXPORT TURNOVER IS A PART OF THE TOTAL TURNOVER. THE EXPORT TURNOVER, IN THE NUMERATOR MU ST HAVE THE SAME MEANING AS THE EXPORT TURNOVER WHICH IS CONSTITUENT ELEMENT OF THE TOTAL TURNOVER IN THE DENOMINATOR. THE LEGISLATURE HAS PROVIDED A DEFINITION OF THE EXPRESSION EXPORT TURNOVER IN EXPLN.2 TO S.10A WHICH THE EXPRESSION IS DEFINED TO MEAN THE CONSIDERATION IN RESPECT OF EXPORT BY THE UNDERTAKING OF ARTICLES, THINGS OR COMPUTER SOFTWAR E RECEIVED IN OR BROUGHT INTO INDIA BY THE ASSESSEE I N CONVERTIBLE FOREIGN EXCHANGE BUT SO AS NOT TO INCLU DE INTER ALIA FREIGHT, TELECOMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF THE ARTIC LES, THINGS OR SOFTWARE OUTSIDE INDIA. THEREFORE IN COMPUTING THE EXPORT TURNOVER THE LEGISLATURE HAS MADE A SPECIFIC EXCLUSION OF FREIGHT AND INSURANCE CHARGES. THE SUBMISSION WHICH HAS BEEN URGED ON BEHALF OF THE REVENUE IS THAT WHILE FREIGHT AND INSURANCE CHARGES ARE LIABLE TO BE EXCLUDED IN COMPUTING EXPORT TURNOVER, A SIMILAR EXCLUSION HAS ITA 188 & CO 59/BANG/2012 PAGE 7 OF 9 NOT BEEN PROVIDED IN REGARD TO TOTAL TURNOVER. THE SUBMISSION OF THE REVENUE, HOWEVER, MISSES THE POIN T THAT THE EXPRESSION TOTAL TURNOVER HAS NOT BEEN DEFINED AT ALL BY PARLIAMENT FOR THE PURPOSES OF S. 10A. HOWEVER, THE EXPRESSION EXPORT TURNOVER HAS BEEN DEFINED. THE DEFINITION OF EXPORT TURNOVER EXCLU DES FREIGHT AND INSURANCE. SINCE EXPORT TURNOVER HAS BEEN DEFINED BY PARLIAMENT AND THERE IS A SPECIFIC EXCLUSION OF FREIGHT AND INSURANCE, THE EXPRESSION EXPORT TURNOVER CANNOT HAVE A DIFFERENT MEANING WHEN IT FORMS A CONSTITUENT PART OF THE TOTAL TURNO VER FOR THE PURPOSES OF THE APPLICATION OF THE FORMULA. UNDOUBTEDLY, IT WAS OPEN TO PARLIAMENT TO MAKE A PROVISION WHICH HAS BEEN ENUNCIATED EARLIER MUST PREVAIL AS A MATTER OF CORRECT STATUTORY INTERPRETA TION. ANY OTHER INTERPRETATION WOULD LEAD TO AN ABSURDITY . IF THE CONTENTION OF THE REVENUE WERE TO BE ACCEPTE D, THE SAME EXPRESSION VIZ. EXPORT TURNOVER WOULD HAVE A DIFFERENT CONNOTATION IN THE APPLICATION OF THE SAME FORMULA. THE SUBMISSION OF THE REVENUE WOULD LEAD TO A SITUATION WHERE FREIGHT AND INSURANCE, THOUGH THESE HAVE BEEN SPECIFICALLY EXCLUDED FROM EXPORT TURNOVER FOR THE PURPOSES OF THE NUMERATOR WOULD BE BROUGHT IN AS PART OF THE EXPORT TURNOVER WHEN IT FORMS AN ELEMENT OF THE TOTAL TURNOVER AS A DENOMINATOR IN THE FORMULA. A CONSTRUCTION OF A STATUTORY PROVISION WHICH WOULD LEAD TO AN ABSURDIT Y MUST BE AVOIDED. MOREOVER, A RECEIPT SUCH AS FREIG HT AND INSURANCE WHICH DOES NOT HAVE ANY ELEMENT OF PROFIT CANNOT BE INCLUDED IN THE TOTAL TURNOVER. FREIGHT AND INSURANCE CHARGES DO NOT HAVE ANY ELEMENT OF TURNOVER. FOR THIS REASON IN ADDITION, THESE TWO ITEMS WOULD HAVE TO BE EXCLUDED FROM THE TOTAL TURNOVER PARTICULARLY IN THE ABSENCE OF A LEGISLATIVE PRESCRIPTION TO THE CONTRARY CIT V SUDARSHAN CHEMICALS INDUSTRIES LTD. (2000) 163 CTR (BOM) 596: (2000) 245 ITR 769 (BOM) APPLIED; CIT V LAKSHMI MACHINE WORKS (2007) 210 CTR (SC) 1: (2007) 290 ITR 667 (SC) AND CIT V CATAPHARMA (INDIA ) (P) LTD. (2007) 211 CTR (SC) 83: (2007) 292 ITR 641 (SC) RELIED ON 8.2 IN THE CASE OF SAK SOFT LTD. (SUPRA), THE ASSE SSEE WAS ENGAGED IN THE BUSINESS OF EXPORTING COMPUTER SOFTW ARE AND CLAIMED DEDUCTION U/S 10B OF THE ACT. IN COMPLETIN G THE ASSESSMENT U/S 143(3) OF THE ACT, THE AO REDUCED TH E EXPENDITURE INCURRED IN FOREIGN EXCHANGE IN PROVIDI NG THE ITA 188 & CO 59/BANG/2012 PAGE 8 OF 9 TECHNICAL SERVICES OUTSIDE INDIA, FROM THE EXPORT T URNOVER WITHOUT CORRESPONDING REDUCTION FROM TOTAL TURNOVER , THEREBY REDUCING THE DEDUCTION CLAIMED BY THE ASSESSMENT U/ S 10B OF THE ACT. IN LIGHT OF THE ABOVE FACTS, THE SPECIAL B ENCH HELD AS UNDER:- FOR THE ABOVE REASONS, WE HOLD THAT FOR THE PURPOS E OF APPLYING THE FORMULA UNDER SUB-SECTION (4) OF SECTI ON 10B, THE FREIGHT, TELECOM CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF ARTICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA OR THE EXPENSES, IF ANY, INCURRED IN FOREIGN EXCHANGE IN PROVIDING THE TECHN ICAL SERVICES OUTSIDE INDIA ARE TO BE EXCLUDED BOTH FROM THE EXPORT TURNOVER AND FROM THE TOTAL TURNOVER, WHICH ARE THE NUMERATOR AND THE DENOMINATOR RESPECTIVELY IN T HE FORMULA. THE APPEALS FILED BY THE DEPARTMENT ARE T HUS DISMISSED. 9. IN THE LIGHT OF THE ABOVE JUDGEMENTS OF THE HIGH COURTS AND THE ORDER OF THE SPECIAL BENCH, WE ARE OF THE V IEW THAT THE CIT(A) WAS JUSTIFIED IN DIRECTING TO EXCLUDE THE AB OVEMENTIONED EXPENSES BOTH FROM THE EXPORT TURNOVER AS WELL AS F ROM THE TOTAL TURNOVER WHILE CALCULATING DEDUCTION U/S 10B OF THE ACT. 10. C.O.NO.59/BANG/2012: C.O.NO.59/BANG/2012: C.O.NO.59/BANG/2012: C.O.NO.59/BANG/2012: THE ONLY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER THE CIT(A) IS JUSTIFIE D IN REJECTING THE ASSESSEES PLEA NOT TO EXCLUDE THE EXPENSES INC URRED IN FOREIGN CURRENCY RELATING TO DESIGN AND OTHER PROJE CT EXPENSES TO THE TUNE OF `9,13,60,248 FROM THE EXPORT TURNOVE R WHILE COMPUTING DEDUCTION U/S 10A OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE, IN THE COURSE OF HEARING OF THE REVENUES APPEAL, HAD SUBMITTED THAT IF THE EXPENSES AMOUNTING TO `9,13,60,248 ARE ALSO REDUCED FROM THE TOTAL TURNOVER BY FOLLOWING THE DICTUM LAID DOWN BY THE HONBLE ITA 188 & CO 59/BANG/2012 PAGE 9 OF 9 JURISDICTIONAL HIGH COURT AND THE ORDER OF THE SPEC IAL BENCH CITED SUPRA, NO ADJUDICATION IS CALLED FOR ON THE C ROSS OBJECTION FILED BY THE ASSESSEE-COMPANY AND THE ISSUE MAY BE LEFT OPEN. SINCE WE HAVE ALREADY DISMISSED THE REVENUES APPEA L, THE ISSUE RAISED IN THE CROSS OBJECTION NEED NOT BE ADJ UDICATED AND THE SAME IS DISMISSED AS INFRUCTUOUS. 11. IN THE RESULT, THE REVENUES APPEAL AS WELL AS THE ASSESSEES CROSS OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2012. SD/- SD/- (JASON P. BOAZ (JASON P. BOAZ (JASON P. BOAZ (JASON P. BOAZ) )) ) ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER (GEORGE GEORGE K) (GEORGE GEORGE K) (GEORGE GEORGE K) (GEORGE GEORGE K) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER EKS COPY TO : COPY TO : COPY TO : COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE