Asst.C.I.T., Bangalore V. M/s Logic Pvt. Ltd., Bangalore

ITA 690/BANG/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5252 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T SURYANARAYANA
• Assessee Lawyers: NEERA MALHOTRA BENGALURU
• Section: 10AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER IT(TP)A NO.690/BANG/2015 ASSESSMENT YEAR : 2010-11 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 2(1)(1), BANGALORE. VS. M/S. LOGICA PVT. LTD., (NOW MERGED WITH CGI INFORMATION SYSTEMS & MANAGEMENT CONSULTANTS PVT LTD), NO.95/1 & 95/2, ELECTRONIC CITY, TOWER-2, PHASE-1 (WEST), BANGALORE 560 100. PAN: AAACL 3330M APPELLANT RESPONDENT APPELLANT BY : SHRI T. SURYANARAYANA, ADVOCATE RESPONDENT BY : MS. NEERA MALHOTRA, CIT(DR)(ITAT)-2, BENGALURU DATE OF HEARING : 06.07.2017 DATE OF PRONOUNCEMENT : 07.07.2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE DIRECTIONS OF THE DRP DATED 25.02.2015 FOR THE ASSESSMENT YEAR 20 10-11 INTER ALIA ON THE FOLLOWING GROUNDS:- 1. THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL ARE OPPOSED TO LAW AND FACTS OF THE CASE. IT(TP)A NO.690/BANG/2015 PAGE 2 OF 3 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE DISPUTE RESOLUTION PANEL ERRED IN LAW IN DIRECTING THE AO TO EXCLUDE THE EXPENDITURE INCURRED IN FOREIGN CURRENC Y BOTH FROM THE EXPORT TURNOVER AS WELL AS FROM TOTAL TURNOVER FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 10A AND 10AA, WITHO UT APPRECIATING THE FACT THAT THE STATUTE ALLOWS EXCLU SION OF SUCH EXPENDITURE ONLY FROM EXPORT TURNOVER BY WAY OF SPE CIFIC DEFINITION OF EXPORT TURNOVER AS ENVISAGED BY SUB-C LAUSE (4) OF EXPLANATION 2 BELOW SUBSECTION (8) OF SECTION 10A A ND THE TOTAL TURNOVER HAS NOT BEEN DEFINED IN THIS SECTION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE DISPUTE RESOLUTION PANEL ERRED IN DIRECTING THE AO TO COMPUTE DEDUCTION U/S 10A & 10AA IN THE ABOVE MANNER BY PLA CING RELIANCE ON THE DECISION OF HON'BLE HIGH COURT OF K ARNATAKA IN THE CASE OF M/S TATA ELXSI LTD., WHICH HAS NOT BECO ME FINAL SINCE THE SAME HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AN D SLPS ARE PENDING BEFORE THE HON'BLE SUPREME COURT. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS WHETH ER THE DISPUTE RESOLUTION PANEL ERRED IN LAW IN DIRECTING THE AO T O EXCLUDE THE EXPENDITURE INCURRED IN FOREIGN CURRENCY BOTH FROM THE EXPORT TURNOVER AS WELL AS FROM TOTAL TURNOVER FOR THE PURPOSE OF COMP UTATION OF DEDUCTION U/S 10A AND 10AA OF THE INCOME-TAX ACT, 1961 [THE ACT ] FOLLOWING THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF TATA ELXSI LIMITED 349 ITR 98 AGAINST WHICH JUDGMENT THE SLPS FILED BY THE DEPARTMENT ARE PENDING BEFORE THE HONBLE SUPREME C OURT. 3. THIS ISSUE IS COVERED BY THE JUDGMENT OF THE HO N'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF TATA ELXSI LTD., 341 ITR 98 (KAR) IN WHICH IT HAS BEEN HELD THAT IF CERTAIN EXPENSES ARE EXCLUDED FRO M THE EXPORT TURNOVER, THE SAME SHOULD ALSO BE EXCLUDED FROM THE TOTAL TUR NOVER. SINCE THE DRP IT(TP)A NO.690/BANG/2015 PAGE 3 OF 3 HAS DECIDED THE ISSUE AS PER JUDGMENT OF HON'BLE JU RISDICTIONAL HIGH COURT IN THE CASE OF TATA ELXSI LTD. (SUPRA) , WE FIND NO INFIRMITY IN THE ORDER OF DRP. ACCORDINGLY, THE ORDER OF THE DRP IS CONFIRME D AND THE APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 7 TH DAY OF JULY, 2017. SD/- SD/- ( INTURI RAMA RAO ) (SUNIL KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 7 TH JULY, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.