ACIT, Circle-1(2), Hyderabad V. M/s. Convergys Information Management (India) (P) Ltd, Hyderabad

ITA 589/HYD/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3220 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 08-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ATUL PRANAY
• Assessee Lawyers: M G RAMACHANDRAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B' , HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.589/HYD/11 : AS STT. YEAR 2005-06 ASSTT. COMMISSIONER OF INCOME - TAX CIRCLE 1(7), HYDERABAD V/S. M/S. CONVERGYS INFORMATION MANAGEMENT (INDIA) (P) LTD., HYDERABAD ( PAN - AACCC 0701 K ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ATUL PRANAY RESPONDENT BY : SHRI M.G.RAMACHANDRAN O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEA R 2005- 06 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONE R OF INCOME- TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- 1. THE ORDER OF THE CIT(A) IS ERRONEOUS ON THE FAC T AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO EXCLUDED COMMUNICATION CHARGES OF RS.1,63,58,066/- FROM THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTA TION OF DEDUCTION U/S. 10A. 3. THE LD. CIT(A) OUGHT TO HAVE NOTICED THAT ON THE ISSUE OF EXCLUSION OF COMMUNICATION CHARGES FROM TOTAL TURNO VER, THE CASE-LAWS ON WHICH HE RELIED UPON HAVE NOT BECO ME FINAL AND THE M ATTER IS IN APPEAL BEFORE THE HIGH COURT. ITA NO.589/HYD/11 M/S. CONVERGYS INFORMATION MANAGEMENT (INDIA) (P) LTD., HYDERABAD 2 3. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS REL IED ON THE ORDER OF THE ASSESSING OFFICER. THE LEARNED CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE OF EXCLUSION OF C OMMUNICATION CHARGES FROM THE TOTAL TURNOVER OF THE ASSESSEE FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER S.10A OF THE ACT IS COVERED IN FAVOUR OF THE ASSESSEE WITH THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN ITO V/S. D.E. BLOCK INDIA SOFTWARE (P)L TD. IN ITA NOS.983 AND 984/HYD/2006 DATED 30.1.2007 AND ALSO OF HONBL E BOMBAY HIGH COURT IN CIT V/S. SUDARSHAN CHEMICALS INDUSTRIES LTD. (245 ITR 769) (BOM) AND AGAIN WITH THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL DATED 18.8.2009 IN ITA NO.696/HYD/2009 FOR ASSESSMENT YEAR 2002-03 IN DCIT V/S. MENTOR GRAPHICS (I) P. LT D., HYDERABAD. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE ISSUE IS COVERED WITH SERIES OF DECISIONS OF THE TR IBUNAL CITED BY THE CIT(A) IN HIS APPELLATE ORDER. IN D.E. BLOCK INDIA SOFTWARE (P) LTD. CITED SUPRA, IT WAS HELD BY THE HYDERABAD BENCH OF THE TRIBUNAL THAT TELECOMMUNICATION EXPENDITURE DOES NOT HAVE ANY ELE MENT OF PROFIT AND HENCE THE SAME HAS TO BE EXCLUDED BOTH FROM TH E EXPORT TURNOVER AS WELL AS THE TOTAL TURNOVER, WHILE COMPU TING DEDUCTION ALLOWABLE TO THE ASSESSEE UNDER S.10A OF THE ACT. A CCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS CONFIRMED AND GROUNDS OF THE REVENUE IN THIS APPEAL ARE REJECTED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMIS SED . ORDER PRONOUNCED IN THE COURT ON 8.7.2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 8TH JULY, 2011 ITA NO.589/HYD/11 M/S. CONVERGYS INFORMATION MANAGEMENT (INDIA) (P) LTD., HYDERABAD 3 COPY FORWARDED TO: 1. M/S. CONVERGYS INFORMATION MANAGEMENT (INDIA)(P) LTD., PLOT NO.5 & 43, HITECH CITY, MADHAPUR, HYDERABAD 2. ASSTT . COMMISSIONER OF INCOME - TAX , CIRCLE 1(2), HYDERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERAB AD . 4. COMMISSIONER OF INCOME - TAX - I HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S.