DCIT, Bangalore V. Societe Generale Golbal Solution Centre Pvt. ltd., Bangalore

ITA 707/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0635 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-11-2009
• Assessment Year: 2005-2006
• Appeal Filed On: 15-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWATHI S PATIL
• Assessee Lawyers: ROHIT JAIN
• Section: 10

Judgement Text

ITA NO.707/B/09 1 IN THE INCOME TAX APPELLATE TRIBUNA L, BANGALORE BENCH B BEFORE SHRI K P T THANGAL, VICE PRESIDENT AND SHRI A MOHAN ALANKAMONY, A.M ITA NO.707/BANG/2009 (ASSESSMENT YEAR 2005-06) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12(3), BANGALORE. - APPELLANT VS M/S SOCIETE GENERALE GLOBAL SOLUTION CENTRE PRIVATE LIMITED, UNIT NO.1, 6TH FLOOR, INVENTOR BUILDING, ITPL, WHITEFIELD ROAD, BANGALORE-66. - RESPONDENT APPELLANT BY : SMT. SWATHI S PATIL RESPONDENT BY : SHRI ROHIT JAIN ORDER PER K P T THANGAL : THIS APPEAL BY THE REVENUE IS FOR THE ASST. YEAR 2 005- 06. THE ASSESSEE HAS TAKEN AS MANY AS FOUR GROUNDS . THE EFFECTIVE GROUND IS AGAINST THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE THE EXPENDITURE INCURR ED TOWARDS FREIGHT, TELECOMMUNICATION CHARGED, ETC. FROM THE T OTAL TURNOVER FOR THE PURPOSES OF COMPUTATION OF DEDUCTION U/S 10 A OF THE I T ACT, 1961. 2. BRIEF FACTS ARE AS FOLLOWS:- ITA NO.707/B/09 2 THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SOFTW ARE DEVELOPMENT AND SOFTWARE EXPORTS. FOR THE YEAR UNDE R CONSIDERATION, THE ASSESSEE'S TURNOVER WAS ABOUT RS.42,67,29,997/- AND U/S 10A, THE ASSESSEE CLAIMED DEDUCTION OF RS.14,20,62,428/-. 3. THE ASSESSING OFFICER HELD WHILE FRAMING THE ASSESSMENT THAT THE TERM 'EXPORT TURNOVER' IS DEFIN ED IN IT ACT AND IT MEANS THE CONSIDERATION RECEIVED IN BY THE AS SESSEE IN CONVERTIBLE FOREIGN EXCHANGE BUT DOES NOT INCLUDE T HE TELECOMMUNICATION EXPENSES, INSURANCE ATTRIBUTABLE TO THE DELIVERY OF SUCH ARTICLES OR THINGS OR EXPENSES, IF ANY, INCU RRED IN FOREIGN EXCHANGE IN PROVIDING TECHNICAL SERVICES. HE FUR THER HELD THAT AS AGAINST EXPORT TURNOVER, THE TOTAL TURNOVER IS NOT DEFINED IN THE ACT AND THEREFORE, IT IS CLEAR THAT THE INTENTION O F THE LEGISLATURE WAS TO CONSIDER THE TURNOVER IN ITS TOTALITY WITHOUT ANY EXCLUSION. HE FURTHER HELD THE VERY FACT THAT THE TOTAL TURNOVE R IS NOT DEFINED IN COMPARISON WITH EXPORT TURNOVER PROVES T HIS AND HENCE, AS PER PROVISIONS OF SECTION 10A, THERE IS NO SCOPE FOR ANY ADJUSTMENT TO TOTAL TURNOVER. THEREFORE, HE HELD T HAT THE TOTAL TURNOVER FOR THE SAKE OF COMPUTATION OF DEDUCTION U /S 10A WILL BE RS.42,67,29,997/- AND NO DEDUCTION WOULD BE ALLOWED FROM THE EXPORT TURNOVER OF RS.42,67,29,997/- AND WHATEVER R EDUCED FROM EXPORT TURNOVER CANNOT BE EXCLUDED FROM THE TOTAL T URNOVER AS IT IS NOT SPECIALLY PROVIDED BY THE ACT. AGGRIEVED BY THE ABOVE ORDER, THE ASSESSEE APPROACHED THE FIRST APPELLATE AUTHORI TY. ITA NO.707/B/09 3 4. AFTER DISCUSSING THE ISSUE, THE CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE DIRECTING THE ASSES SING OFFICER TO EXCLUDE THE EXPENDITURE TOWARDS FREIGHT, TELECOMMUN ICATION CHARGES ETC. FROM THE TOTAL TURNOVER WHEN COMPUTING DEDUCTION U/S 10A. 5. NOW THE CONTENDING PARTIES CONCEDED THAT THE ISSUE STANDS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL, SPECIAL BENCH IN THE CASE OF ITO V SAK SOFT LTD. 313 ITR (AT) 353 (CHENNAI) WHEREIN THE TRIBUNAL HEL D THAT EXPENSES ON FREIGHT, TELECOMMUNICATION CHARGES OR O UTSIDE INDIA, WHICH ARE REQUIRED TO BE EXCLUDED FROM THE EXPORT T URNOVER. IN VIEW OF THE ABOVE, RESPECTFULLY FOLLOWING THE ABOVE DECISION, THE APPEAL BY THE REVENUE FAILS AND IS DISMISSED. 6. IN THE RESULT, THE APPEAL BY THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON 20TH NOVEMBER, 2009 . SD/- SD/- (A MOHAN ALANKAMONY) (K P T THANGAL) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED :20/11/2009 COPY TO : 1. THE REVENUE 2. THE ASSESSEE 3. THE CIT CONCERNED. 4. THE CIT(A) CONCERNED. 5. DR 6 . GF 7. GF, ITAT, NEW DELHI. MSP/18/11/ BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.