Assistant Commissioner of Income Tax Circle-5(1)(2), Bangalore V. M/s Powergear Pvt Ltd , Bangalore

ITA 737/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7025 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 31-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: PRASHANTH C
• Section: 10AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIT KUMAR, JUDICIAL MEMBER ITA NO. 7 37 /BANG/201 7 ASSESSMENT YEAR : 201 3 - 1 4 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5 (1) (2), BANGALORE. VS. M/S. POWERGEAR PVT. LTD., PLOT NO. 15 & 16, 3 RD PHASE, PEENYA INDUSTRIAL AREA, BANGALORE 560 058. PAN: AABCP 2082K APPELLANT RESPONDENT ASSESSEE BY : SHRI PRASHANTH .C, CA REVENUE BY : SHRI B.R. RAMESH, JCIT (DR) DATE OF HEARING : 1 8 .1 2 .2017 DATE OF PRONOUNCEMENT : 1 8 .12.2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER; THIS APPEAL IS FILED BY THE REVENUE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT(A) -5, BANGALORE DATED 26.12.2016 FOR ASSESSMEN T YEAR 2013-14. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS) - 5, BANGALORE, IS OPPOSED TO THE LAW AND NOT ON THE FAC TS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE CIT(A) ERRED IN LAW IN DIRECTING THE ASSESSING OFFICER TO REDUCE THE EXPENDITURE INCURRED IN TRAVEL, TELECOMMUNICATION ETC, BOTH FRO M THE EXPORT TURNOVER AS WELL AS THE TOTAL TURNOVER FOR THE PURP OSE OF COMPUTATION OF DEDUCTION U/S.10A OF THE IT ACT WITH OUT APPRECIATING THE FACT THAT THE STATUE ALLOWS EXCLUSION OF SUCH E XPENDITURE ONLY FROM THE EXPORT TURNOVER BY WAY OF SPECIFIC DEFINITION O F EXPORT TURNOVER AS ENVISAGED BY SUB-CLAUSE(4) OF EXPLANATION 2 BELO W SUB-SECTION 8 OF SECTION 10A. ON THE OTHER HAND, THERE IS NO SPECIFI C PROVISION IN SECTION 10A OR 10AA WARRANTING EXCLUSION OF ABOVE E XPENSES FROM TOTAL TURNOVER ALSO. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED UP ON, THE ORDER OF ITA NO. 737/BANG/2017 PAGE 2 OF 3 THE CIT(A) MAY BE REVERSED AND THAT ASSESSMENT ORDE R BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OTHER GROUNDS ON OR BEFORE HEARING OF THE APPEAL. 3. THE LD. DR OF REVENUE SUPPORTED THE ASSESSMENT O RDER WHEREAS THE LD. AR OF ASSESSEE SUPPORTED THE ORDER OF CIT(A). HE ALSO SU BMITTED THAT THIS ISSUE IS NOW SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY T HE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS . TATA ELXSI LTD. AS REPORTED IN 349 ITR 98. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THE CIT(A) HAD FOLLOWED THE SAME JUDGEMENT OF HON'BLE KARNATAKA HI GH COURT RENDERED IN THE CASE OF CIT VS. TATA ELXSI LTD. (SUPRA) AND IT WAS HELD BY HIM THAT VARIOUS EXPENSES INCURRED IN FOREIGN CURRENCY AND REDUCED B Y THE AO FROM EXPORT TURNOVER SHOULD ALSO BE REDUCED FROM TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION ALLOWABLE U/S. 10A OF THE IT AC T. AS PER THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT CITED BEFORE US AS NOT ED ABOVE, IT WAS HELD THAT TOTAL TURNOVER IS SUM TOTAL OF EXPORT TURNOVER AND DOMESTIC TURNOVER AND THEREFORE, IF ANY AMOUNT IS REDUCED FROM EXPORT TUR NOVER THEN TOTAL TURNOVER ALSO GOES DOWN BY THE SAME AMOUNT AUTOMATICALLY. SINCE THE DECISION OF CIT(A) IS IN LINE WITH THIS JUDGEMENT OF HON'BLE KARNATAKA HI GH COURT, WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIT KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 18 TH DECEMBER, 2017. /MS/ ITA NO. 737/BANG/2017 PAGE 3 OF 3 COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.