DCIT, Bangalore V. Processor Systems India Pvt. Ltd., Bangalore

ITA 678/BANG/2014

• Counselvise Citation: 67821114 RSA 2014
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-02-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DHIVAHAR JT
• Assessee Lawyers: P DINESH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.678/BANG/2014 ASSESSMENT YEAR : 2005-06 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(3), BANGALORE. VS. PROCESSOR SYSTEMS INDIA PVT. LTD., 24. CLASSIC BUILDING, RICHMOND ROAD, BANGALORE 560 025. PAN : AAACP 8635M APPELLANT RESPONDENT APPELLANT BY : SHRI P. DHIVAHAR, JT. CIT(DR) RESPONDENT BY : SHRI P. DINESH, ADVOCATE DATE OF HEARING : 10.02.2015 DATE OF PRONOUNCEMENT : 20.02.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER D ATED 17.2.2014 OF THE CIT(APPEALS)-IV, BANGALORE RELATING TO ASSESSME NT YEAR 2005-06. 2. THE TWO ISSUES THAT ARISE FOR CONSIDERATION IN THIS APPEAL ARE AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN DIRECTING THE A O TO EXCLUDE REIMBURSEMENT OF CERTAIN EXPENSES BOTH FROM THE EXP ORT TURNOVER AS WELL ITA NO.678/BANG/2014 PAGE 2 OF 3 AS THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTATIO N OF DEDUCTION U/S. 10A OF THE ACT; AND AS TO WHETHER THE CIT(A) WAS JUSTI FIED IN DIRECTING THE AO TO COMPUTE DEDUCTION U/S. 10A OF THE ACT ON THE PROFIT S OF THE 10A UNIT WITHOUT SETTING OFF LOSS PERTAINING TO NON-10A UNIT AGAINST THE PROFITS OF 10A UNITS. 3. IN RESPECT OF THE FIRST ISSUE, THE CIT(A) , FOL LOWING THE DECISION OF THE HON'BLE HIGH COURT OF KARNATAKA IN CIT V. TATA ELXSI LTD., 349 ITR 98 (KAR) , HELD THAT WHATEVER IS EXCLUDED FROM THE EXPORT TU RNOVER, HAS ALSO TO BE EXCLUDED FROM THE TOTAL TURNOVER WHILE COMPUTING DEDUCTION U/S. 10A OF THE ACT AND ALLOWED THE CLAIM OF THE ASSESSEE. 4. IN SO FAR AS THE SECOND ISSUE IS CONCERNED, THE CIT(A) FOLLOWED THE DECISION OF HON'BLE HIGH COURT OF KARNATAKA IN YOKOGAWA INDIA LTD., 345 ITR 385 (KAR) , WHEREIN IT WAS HELD THAT SECTION 10A IS AN EXEMPT ION PROVISION AND THEREFORE LOSSES OF NON-10A UNITS CAN NOT BE SET OFF AGAINST PROFITS OF 10A UNITS WHICH ARE ELIGIBLE FOR DEDUCTI ON U/S. 10A. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE H AS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WH OSE ONLY STAND WAS THAT BOTH THE DECISIONS OF HON'BLE HIGH COURT O F KARNATAKA HAVE NOT BEEN ACCEPTED BY THE REVENUE AND SLPS HAVE BEEN FIL ED BEFORE THE HON'BLE SUPREME COURT. WE ARE OF THE VIEW THAT PE NDENCY OF SLP BEFORE THE HON'BLE SUPREME COURT WILL NOT BE A GROUND, NOT TO FOLLOW THE DECISIONS ITA NO.678/BANG/2014 PAGE 3 OF 3 OF THE JURISDICTIONAL HIGH COURT. IN THE CIRCUMSTA NCES, WE ARE OF THE VIEW THAT THE APPEAL BY THE REVENUE IS WITHOUT ANY MERIT . CONSEQUENTLY, THE SAME IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF FEBRUARY, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 20 TH FEBRUARY, 2015. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.