ACIT, Bangalore V. M/s Quality Engineering & Software Technologies Pvt Ltd., Bangalore

ITA 708/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0709 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 16-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JASON P BOAZ

Judgement Text

PAGE 1 OF 4 ITA NOS.708 & 713/BANG/2009 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE BENCH A' BEFORE SHRI K P T THANGAL, VICE PRESIDENT AND SHRI N L KALRA, A.M. ITA NO.708 & 713/BANG/09 (ASST. YEARS 2002-03 & 2003-04) THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-12(2), BANGALORE. - APPELLANT VS M/S QUALITY ENGINEERING & SOFTWARE TECHNOLOGIES PVT. LTD., NO.55, QUEST TOWERS, WHITEFIELD MAIN ROAD, MAHADEVAPURA, BANGALORE-48. - RESPONDENT APPELLANT BY : SHRI JASON P BOAZ RESPONDENT BY : SHRI AMIT GUPTA O R D E R PER N L KALRA : THE REVENUE HAS FILED APPEALS AGAINST THE RESPECTIVE ORDER OF LEARNED CIT(A). IN BOTH THE AP PEALS, THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LEARNED CI T(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE THE EXPENDITURE INCURRED TOWARDS FREIGHT AND TELECOMMUN ICATION CHARGES ETC. FROM THE TOTAL TURNOVER FOR THE PURPOS E OF COMPUTATION OF DEDUCTION U/S 10A OF THE I T ACT. 3. WE HAVE HEARD BOTH THE PARTIES. THE LEARNED CIT(A) HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSES SEE AFTER PAGE 2 OF 4 ITA NOS.708 & 713/BANG/2009 2 CONSIDERING THE DECISIONS OF THE BANGALORE TRIBUNAL ON THIS ISSUE. THE LEARNED CIT(A) HAS ALSO REFERRED TO THE DECISION OF THE SPECIAL BENCH ON THIS ISSUE. IT WILL BE USEFUL TO REPRODUCE PARA 6.1 OF THE ORDER OF THE LEARNED CIT(A) FOR THE ASST. YEAR 2002-03:- '6.1 THE ABOVE PRINCIPLE OF HARMONIOUS INTERPRETATION HAS ALSO BEEN FOLLOWED IN THE FOLLOWING DECISIONS: THE BANGALORE ITAT IN THE CASE OF I SEVA SYSTEMS PRIVATE LIMITED V ACIT (ITA NO.401/BANG/2007 DATED DECEMBER 7, 2007) THE BANGALORE ITAT IN THE CASE OF MPHASIS LTD. V ACIT (ITA NO.884/BANG/2007) THE BANGALORE ITAT IN THE CASE OF I GATE GLOBAL SOLUTIONS LTD. V ACIT (ITA NOS.248 AND 249/BANG/2007) (112 TTJ 1002) THE DELHI HIGH COURT IN CASE OF DCIT V BINARY SEMANTICS LTD. (109 TTJ 556) AND THE CHENNAI ITAT IN CASE OF DCIT V SRA SYSTEMS LTD. (305 ITR 427) M/S TATA ELXSI LTD. V ACIT (ITA NO.315/BANG/2006 DT.16TH OCTOBER, 2007. ACOT V M/S INFOSYS TECHNOLOGIES LTD. (ITA NOS.653 & 969/BANG/2006 DT.17TH OCTOBER, 2007) MULTITECH SOFTWARE SYSTEMS INDIA PRIVATE LIMITED V ACIT CIRCLE-12(1) (ITA NO.375/BANG/2006) RECENTLY IN THE CASE OF ITO, COMPANY WARD- VI(I) V M/S SAK SOFT LTD. 2009 TIOL 187 ITAT MAD SB, THE SPECIAL BENCH 'D' CHENNAI, PAGE 3 OF 4 ITA NOS.708 & 713/BANG/2009 3 FOLLOWING THE DECISION OF THE TATA ELXSI (SUPRA) HELD THAT THE FREIGHT, TELECOMMUNICATION CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF ARTICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA OR THE EXPENSES, INCURRED IN FOREIGN EXCHANGE IN PROVIDING THE TECHNICAL SERVICES OUTSIDE INDIA ARE TO BE EXCLUDED BOTH FROM THE EXPORT TURNOVER AND FROM THE TOTAL TURNOVER'. 4. THE ISSUE BEFORE US STANDS ALREADY DECIDED BY THE BANGALORE BENCH AS WELL AS BY THE SPECIAL BENCH. TH E SPECIAL BENCH HAS CONSIDERED THE DECISION OF THE HON'BLE AP EX COURT IN THE CASE OF LAXMI MACHINE WORKS 290 ITR 667 VIDE WH ICH, IT WAS HELD THAT 'WHAT IS NOT INCLUDIBLE IN THE EXPORT TURNOVER IS NOT INCLUDIBLE IN THE TOTAL TURNOVER. THE SPECIAL BENCH FURTHER OBSERVED THAT WHERE THE LEGISLATURE USING THE SAME EXPRESSION IN THE SAME STATUTE AT TWO PLACES OR MORE, THE SAME INTERPRETATION SHOULD BE GIVEN TO THE EXPRESSION UN LESS THE CONTEXT REQUIRES OTHERWISE. THE RULE OF PARITY CANN OT BE USED WHERE A STATUTORY DEFINITION EXISTS. SINCE THE TOTA L TURNOVER HAS NOT BEEN DEFINED IN THE ACT, THEREFORE, THE RAT IO OF LAW AS LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF L AXMI MACHINE WORKS (SUPRA) IS TO BE APPLIED IN THIS CASE . HENCE, WHATEVER IS EXCLUDED FROM THE EXPORT TURNOVER IS TO BE EXCLUDED FROM THE TOTAL TURNOVER. WE THEREFORE HOL D THAT THE LEARNED CIT(A) WAS JUSTIFIED IN HOLDING THAT WHATEV ER IS NOT INCLUDIBLE IN THE EXPORT TURNOVER IS NOT TO BE INCL UDED IN THE TOTAL TURNOVER. PAGE 4 OF 4 ITA NOS.708 & 713/BANG/2009 4 5. IN THE RESULT, THE APPEALS FILED BY THE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30TH NOVEMBER, 2009. SD/- SD/- (K P T THANGAL) (N L KALRA) VICE PRESIDENT ACCOUNTANT MEMBER BANGALORE, DTD.30/11/2009 COPY TO : 1. THE ASSESSEE 2.THE REVENUE 3. THE CIT( A) CONCERNED.4. THE CIT CONCERNED. 5. THE DR 6. GUAR D FILE. 7. GF, ITAT, NEW DELHI. MSP/23.11. BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.