Assistant Commissioner of INcome TAx Circle-3(1)(2), Bangalore V. M/s Harman Connected Services Technologies Pvt Ltd , Bangalore

ITA 2141/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4614 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 07-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Keywords: Revised return
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A BEFORE S HRI N.V. VASUDEVAN , JUDICIAL MEMBER AND SHRI JASON P BOAZ , ACCOUNTANT MEMBER I.T . A. NO. 2 141 /BANG/20 17 (ASSESSMENT YEAR : 20 14 - 15 ) ASST. COMMISSIONER OF INCOME TAX, CIRCLE 3(1 )(2), B ANGALORE. . APPELLANT. VS. M/S. HARMAN CONNECTED SERVICES TECHNOLOGIES PVT. LTD., C - 4 BLOCK, WING A, MANYATA SEZ PARK, NAGAWARA ORR, RACHENAHALLI VILLAGE, BANGALORE. .. RESPONDENT. APPELLANT BY : SHRI B.R. RAMESH, JCIT (D.R) R E SPONDENT BY : MS. VIDYA, ADVOCATE. DATE OF H EARING : 12.6 .2018. DATE OF P RONOUNCEMENT : 15 .06 .201 8 . O R D E R PER SHRI JASON P BOAZ A .M . : T H I S A P P E A L B Y RE V E N U E I S D I R E C T E D A G A I N S T T H E O R D E R O F T H E CI T ( A ) - 3 , B A NG A L O RE D A T ED 22.08.2017 F O R A SS E SS M E N T Y EAR 2 0 14 - 15 . 2 . BR I E F L Y ST A T E D , T H E F A C T S O F T H E C A S E A R E AS U N D ER : - 2 ITA NO. 2141 /BANG/2017 2 .1 T H E A S S E S S EE, A C O M P A N Y E NG A G E D I N T H E B US IN E S S O F P R OV I DIN G IT ENABLED SERVICES , F I L E D IT S ORIGINAL R E T U RN O F I N C O M E F O R A SS E S S M E N T Y EAR 2 0 14 - 15 O N 30. 1 1 . 2 0 14 D EC L A R I N G TO T AL LOSS OF RS.15,84,20,984 AND CLAIMING A REFUND OF RS.4,94,16,150. SUBSEQUENT LY , THE ASSESSEE FILED REVISED RETURN ON 23.2.2016 DECLARING A TOTAL LOSS OF RS.13,99,98,717. T H E C A S E W A S T A K E N U P F O R S C R U TI N Y BY ISSUE OF NOTICE U / S . 14 3 ( 2 ) O F THE INCOM E T AX ACT, 1961 (IN SHORT THE ACT ) . THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT V I D E O R D ER D A T E D 23.12.2016 , W H ER E I N T H E A SS E S S EE S LOSS W AS D E T ER M IN E D A T RS. 1 2,89,67,940 I N VI EW O F TH E A S S E S S IN G O F F I CER ( A O ) D I S A L L O WIN G T H E A S S E S S EE S C L A I M F O R D E D U C T IO N U / S . 1 0 A A O F T H E A CT TO THE EXTENT OF RS.1,10,30,777. ON APPEAL, T H E C I T ( A ) - 3 , BA N G A LO R E P A R T L Y A L L O W ED T H E A SS E S S EE S A P P E A L VI D E THE IMPUGNED ORDER DATED 22.8.2017 . I N D O IN G S O , T H E L D . CI T ( A ) A L L O W E D T H E A S S E S S EE S C L A I M F O R D E D U C T IO N U/ S . 1 0 A A O F T H E A CT F O LL O WI N G T H E D E C I S IO N O F T H E H ON B L E K A R N A T A K A H I G H C O U RT I N T H E C A S E O F CIT V T A T A EL X S I L T D . (2012) ( 3 4 9 I T R 98 ) ( K A R ). 3 .1 A GG R I E V E D B Y TH E O R D ER O F T H E CI T ( A ) - 3 , BA N G A L O RE D A T E D 22.08 .2017 F O R AS S E SS M E N T Y EAR 2 0 14 - 15 , RE V E N U E H AS F I L E D T H I S A P P E A L , RA I S IN G T H E F O L LO W I N G G R OU N D S : - 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LEARNED CIT (APPEALS) ERRED IN FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE HIGH COURT IN THE CASE OF M/S. TATA ELXSI 3 ITA NO. 2141 /BANG/2017 LTD. (ITA NO.70/2009). 3. THE LEARNED CIT (APPEALS) ERRED IN HOLDING THAT THE EXPENSES REDUCED FROM THE EXPORT TURNOVER MUST ALSO BE REDUCED FROM THE TOTAL TURNOVER SINCE THERE IS NO PROVISION UNDER SECTION 10A FOR EXCLUSION OF SU CH EXPENSES FROM TOTAL TURNOVER. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 3.2 T H E L D . D R W AS H E ARD I N S U P P O R T O F T H E G R O U ND S RA I S E D . 3 .3 W E H A V E H EA R D TH E R I V AL C ON T E N T I ON S A N D P E R U S E D A N D CA R EF ULL Y C O N S I D ER E D T H E M A T E R I A L O N RE C O R D ; IN C L U D I N G TH E J U D I C I A L P R ON O U N C E M E N T C I T E D . A S R E G A R D S T H E I S SU E O F R E D U C T IO N O F T H E IT E M S O F EXPENDITURE ON FOREIGN TRAVEL , COMMUNICATION AND INSURANCE I N C U RR E D I N F O R E I G N C U RR E N CY ATTRIBUTABLE TO T HE DELIVERY OF COMPUTER SOFTWARE O U TS ID E I NDI A, T H E J U R I S D I C T I O N AL H I G H C O U RT O F K A R N A T A K A I N TH E C A S E O F CIT V T A T A EL X S I L T D ( 3 4 9 I T R 98 ) ( K AR) H AS H E L D T H A T W H EN CE R T A I N E X P E NS ES ARE E X C LU D ED F R O M TH E E X P O R T T U R NO V ER F O R TH E PU R P O S ES O F C O M PU TI N G D E DU C T I O N A D M ISS I BL E U N D E R T H E A C T ; L I K E U / S . 10 A O F T H E A C T , S U C H E X P E N S ES ARE A L S O T O B E E X C L U D ED F R O M TO T AL TU R N O V ER, A S E X P O RT TU R N O V ER I S A P A R T O F T O T AL T U R NO V ER. T H E D EC I S IO N I N TH E C A S E O F T A T A EL X S I LT D ( S U P R A ) H AS A L S O B E E N F O LL O W ED B Y T H E H ON B L E C O U RT I N IT S O R D ER I N T H E C A S E O F D CIT V M O T O R I ND U ST R I E S C O . L TD ., (I T A N O . 7 7 6 /2 0 0 6 , 7 4 4/ 2 00 7 A N D 1 1 55 / 20 0 6 D A T ED 13 . 0 6 . 2 0 1 4 ), H OL D I N G T H AT I F A N Y E X P E N D IT U RE I S S O UG H T T O B E RE M OV ED F R O M E X PO R T TU R N O V ER, TH E N I T S HO U L D A L S O B E R E D U C E D FR O M TO T AL T U R N O V ER F O R T H E PU R P O S ES O F C O M PU TI N G TH E E L I G I B L E D E D U C T I O N U / S . 1 0 A O F T H E A C T . IN T H I S L E G A L A N D F A C T U A L M A T R I X O F T H E CA S E, A S D I S C U S S ED A B O V E, W E F I N D N O RE A S O N T O 4 ITA NO. 2141 /BANG/2017 I N T ERFERE W I T H O R D E V I A T E FR O M T H E F IN D I N G R E N D ER E D B Y T H E LD . CI T ( A ) O N TH I S IS SU E, A N D TH ER EF O RE U PH O L D T H E S A M E . C O NS E Q U E N T L Y , TH E G R O UN D S S. NO S . 1 T O 4 R A IS E D B Y RE V E N U E A R E D I S M ISS E D . 4. IN THE RESULT, REVENUE S APPEAL FOR ASSESSMENT YEAR 20 14 - 15 IS DISMISSED. PR O N O U N C E D I N T H E O P EN C O U RT O N T H I S 15 TH D AY O F J U N E, 2 0 1 8 . SD/ - (N.V. VASUDEVAN) JUDICIAL MEMBER SD/ - (JASON P BOAZ) ACCOUNTANT MEMBER BANGALORE, DT.15.06.2018. *REDDY GP COPY TO : 1 APPE LLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.