ACIT, Cirlce-2(2), Hyd, Hyderabad V. Hexagon Capability Center India P.Ltd., (formerly known as Intergraph consulting Pvt.Ltd) Hyd, Secunderabad

ITA 408/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2719 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-05-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L R AMJI RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Question of law
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B , HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI CHANDRA PUJARI, ACCOUNTANT MEMBER ITA NO. 408/HYD/2016 ASSESSMENT YEAR: 2003 - 04 THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(2), HYDERABAD VS. M/S. HEXAGON CAPABILITY CENTER INDIA PVT. LTD, (FORMERLY KNOWN AS INTERGRAPH CONSULTING PVT LTD.,), SECUNDERABAD. PAN AAACI7746L (APPELLANT) (RESPONDENT) A SSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SHRI L. RAMJI RAO DATE OF HEARING : 10 - 08 - 2017 DATE OF PRONOUNCEMENT : 10 - 08 - 2017 ORDER PER D. MANMOHAN , VICE PRESIDENT: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 2, HYDERABAD AND IT PERTAINS TO THE ASSESSMENT YEAR 2003 - 2004. THE ONLY GROUND URGED BY THE REVENUE READS AS UNDER: - IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHER THE CIT (A) IS CORRECT IN LAW IN DIRECTING THAT INTEREST EXPENSES, TRAVELLING EXPENSES IN FOREIGN EXCHANGE, SERVICE CHARGES ARE TO BE EXCLUDED FROM TOTAL TURNOVER ALSO THROUGH EXPLANATION 2 TO SECTION 10A OF THE INCOME TAX ACT, 1961, CLEARLY STATES THAT THEY NEED TO BE EXCLUDED FROM THE EXPORT TURNOVER AND NO SUCH PROVISION IS AVAI LABLE FOR TOTAL TURNOVER? 2. AT THE OUTSET, IT MAY BE NOTICED THAT THE LD. CIT(A) FOLLOWED THE DECISION OF THE APPELLATE TRIBUNAL IN THE CASE OF ITO VS. SAK SOFT LIMITED (313 ITR 353) TO HOLD THAT THE CHARGES SHOULD BE REDUCED FROM THE EXPORT TURNOVER AS WELL AS FROM TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S 10A OF THE ACT. IN FACT, LD. CIT(A) REFERRED TO 2 THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. D.E. SHAW INDIA SOFTWARE P LTD, DATED 22.07.2014 WHEREIN THE COURT O BSERVED AS UNDER: - WHETHER, ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT COMMUNICATION EXPENSES SHOULD BE EXCLUDED BOTH FROM EXPORT TURNOVER AS WELL AS TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTI ON U/S 10A, WITHOUT APPRECIATING THAT THERE IS NO PROVISION IN THE ACT TO REDUCE THE COMMUNICATION EXPENSES FROM TOTAL TURNOVER? PERUSAL OF THE ORDER UNDER APPEAL REFLECTS THAT INSOFAR AS QUESTION NO.1 TO 3 ARE CONCERNED, THE TRIBUNAL FOLLOWED THE DECISI ON OF A COORDINATE BENCH IN M/S. INTOTO SOFTWARE INDIA (P) LIMITED (ITA NO.1196/HYD/2010). LEARNED STANDING COUNSEL FOR THE REVENUE FAIRLY STATES THAT THE ABOVE ORDER OF THE TRIBUNAL HAS BEEN CONFIRMED BY THIS COURT. THE ISSUE THEREFORE NEEDS NO FURTHER RECONSIDERATION. INSOFAR AS THE FOURTH QUESTION OF LAW IS CONCERNED, THE ORDER UNDER APPEAL REFLECTS THAT THE TRIBUNAL MERELY FOLLOWED THE DECISION OF KARNATAKA HIGH COURT IN CIT VS. TATA ELXSI LIMITED (349 ITR 90) WHICH WAS ALSO FOLLOWED BY THE TRIBUNAL IN ITO VS. SAK SOFT LIMITED (313 ITR 353) (AT). THOUGH THE LE3ARNED STANDING COUNSEL STATES THAT AN APPEAL HAS BEEN PREFERRED AGAINST THE DECISION OF THE KARNATAKA HIGH COURT, IT HOLDS GOOD TILL SET ASIDE. WE ARE NOT PERSUADED TO DISAGREE WITH THE REASON ING OF THE KARNATAKA HIGH COURT IN THE ABOVE DECISION. WE THEREFORE FIND NO REASON TO ENTERTAIN THIS APPEAL AS NO QUESTION, MUCH LESS A SUBSTANTIAL QUESTION OF LAW, IS RAISED FOR CONSIDERATION. THE APPEAL IS ACCORDINGLY DISMISSED. NO ORDER AS TO COSTS. 3. HAVING REGARD TO THE C IRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND ACCORDINGLY APPEAL OF THE REVENUE IS DISMISSED. 4. PRONOUNCED ACCORDINGLY IN THE OPEN COURT ON 10 TH AUGUST, 2017. S D / - S D / - ( CHANDRA PUJARI ) (D. MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT HYDERABAD, DATED: 10 - 08 - 2017. OK K 1 M/S. HEXAGON CAPABILITY CENTER IND PVT LTD, (FORMERLY KNOWN AS INTERGRAPH CONSULTING PVT LTD), 1 - 8 - 446 & 447, S.P. ROAD, SECUNDERABAD - 500003. 2 ACIT, CIR - 2(2), HYDERABAD. 3 CIT(A) - 2, HYDERABAD. 4 PR. CIT - 2, HYDERABAD. 5 THE DR, ITAT HYDERABAD 6 GUARD FILE