DCIT, Bangalore V. M/s Teleca Software Solutions India Pvt. Ltd., Bangalore

ITA 547/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8575 (ITAT-BANGALORE)
• Duration Of Justice: 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G. R. REDDY
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH A, BANGALORE BEFORE SHRI A. K. GARODIA, AM AND SHRI LALIET KUMAR, JM IT (TP) A NO.547 (BANG) 2016 (ASSESSMENT YEARS : 2011-12) THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-7(1)(1), BMTC BUILDING, KORAMANGALA, BANGALORE-560 095 APPELLANT VS M/S TELECA SOFTWARE SOLUTIONS INDIA PVT.LTD. PLOT NO.3 & 3A, EOIZ INDUSTRIAL AREA, SY. NO.85 & 8 6, SADARAMANGALA VILLAGE, K.R.PURAM HOBLI, BANGALORE-560 066 PAN NO.AADCT1605J/TA-362 RESPONDENT REVENUE BY : SHRI G.R. REDDY, CIT-DR-I ASSESSEE BY : MS. RASHMI, ADVOCATE DATE OF HEARING : 20-02-2017 DATE OF PRONOUNCEMENT : 23-02-2017 O R D E R PER SHRI A.K.GARODIA, AM THIS IS REVENUES APPEAL DIRECTED AGAINST THE ASSES SMENT ORDER PASSED BY THE AO U/S 143(3) R.W.S. 144C(13) OF THE IT ACT, 1961 FOR ASSESSMENT YEAR 2011-12 AS PER THE DIRECTIONS OF TH E DRP. 2. THE GROUNDS RAISED BY THE REVENUE IN THIS APPEAL ARE AS UNDER; IT(TP)A NO.547(B)2016 2 1. THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL ARE OPPOSED TO LAW AND FACTS OF THE CASE. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE DRP WAS JUSTIFIED IN LAW IN HOLDING THAT THE EXPENDITURE INCURRED IN FOREIGN CURRENCY, TOWARDS TELECOMMUNICATION TO BE EXCLUDED BOTH FROM EXPORT TURNOVER AND TOTAL TURNOVER FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 10A OF THE ACT. WHERE AS SUCH EXCLUSION IS PERMITTED TO ARRIVE AT THE EXPORT TURNOVER ONLY AS PER THE DEFINITIONS GIVEN IN SED.1 0A OF THE ACT AND TOTAL TURNOVER HAS NOT BEEN DEFINED IN THE SECTION. 3. WHETHER THE DRP IS CORRECT IN LAW IN FOLLOWING T HE JUDGMENTS OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS TATA ELXSI LTD WHICH HAS NOT BECOME FINAL SINCE THE SAME HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND SL PS ARE PENDING BEFORE THE HONBLE SUPREME COURT. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE ARGUED A T THE TIME OF HEARING, IT IS PRAYED THAT THE DIRECTIONS O F DISPUTE RESOLUTION PANEL IN SO FAR AS IT RELATES TO THE ABO VE GROUNDS MAY BE REVERSED. 5. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND /OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 3. THE LD. DR OF THE REVENUE SUPPORTED THE ORDER O F THE TPO AND THE DRAFT ASSESSMENT ORDER WHEREAS THE LD. AR OF TH E ASSESSEE SUBMITTED THAT THIS ISSUE IS NOW COVERED BY THE JUD GMENT OF THE HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F M/S TATA ELXSI LTD., AS REPORTED IN 349 ITR 98. IT(TP)A NO.547(B)2016 3 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THIS WAS THE OBJECTION OF THE ASSESSEE BEFORE THE DRP TH AT THE AO WAS NOT JUSTIFIED IN REDUCING THE COMMUNICATION AND OTHER F OREIGN CURRENCY EXPENSES ONLY FROM EXPORT TURNOVER AND NOT FROM TOT AL TURNOVER ALSO. IT WAS HELD BY THE HONBLE KARNATAKA HIGH COURT IN T HE CASE OF M/S TATA ELXSI LTD. (SUPRA) THAT THE TOTAL TURNOVER IS SUM TOTAL OF EXPORT TURNOVER AND DOMESTIC TURNOVER AND THEREFORE, IF AN AMOUNT IS REDUCED FROM EXPORT TURNOVER THEN TOTAL TURNOVER AL SO GOES DOWN BY THE SAME AMOUNT AUTOMATICALLY. IN THIS VIEW OF THE MATTER, WE FIND NO INFIRMITY IN THE DIRECTION OF DRP, AS PER WHICH THE DRP ACCEPTED THE CLAIM OF THE ASSESSEE THAT THESE EXPENSES WHICH WER E REDUCED FROM THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTING THE DE DUCTION ALLOWABLE U/S 10A OF THE IT ACT, 1961 ARE ALSO BE REDUCED FRO M THE TOTAL TURNOVER. HENCE, WE DO NOT FIND ANY MERIT IN THE A PPEAL OF THE REVENUE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (LALIET KUMAR) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE: D A T E D : 23.02.2017 AM * IT(TP)A NO.547(B)2016 4 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER, AR, ITAT, BANGALORE 1. DATE OF DICTATION 2. , , DATE ON WHICH TYPED DRAFT IS PLACED BEFORE THE DICT ATING MEMBER .. 3. !' # . $ %# / $ %# # & DATE ON WHICH THE APPROVED DRAFT COMES TO THE PS/SR .PS. 4. ''() & * + DATE ON WHICH THE ORDER IS PLACED BEFORE THE DICTAT ING MEMBER FOR PRONOUNCEMENT 5. * . %# / # . . %# # + DATE ON WHICH THE ORDER COMES BACK TO THE PS/SR.PS .. 6 * !', + DATE OF UPLOADING THE ORDER ON WEBSITE .. 7. ! !', ' , - ) IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO . 8. .% / 0 + DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. * 1'2 / 34 & 5 + DATE ON WHICH ORDER GOES FOR XEROX &ENDORSEMENT 10. 0 6 / + DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 11. * 7 & 0 8 + THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 12. !) * 9() & 0 9() /#5 . + THE DATE ON WHICH THE FILE GOES TO DESPATCH SECTION FOR DESPATCH OF THE TRIBUNAL ORDER 13. * 9() + DATE OF DESPATCH OF ORDER . IT(TP)A NO.547(B)2016 5