PR. COMMISSIONER OF INCOME TAX V. M/S QUALITY ENGINEERING & SOFTWARE TECHNOLOGIES P.

ITA/716/2015

AI Insights

The case involves the appellant-Revenue challenging the exclusion of telecommunication expenses and conveyance charges incurred in foreign currency from the total turnover for the computation of deduction under section 10A of the Income Tax Act, 1961. The tribunal had previously held that such expenses should be excluded, aligning with the definitions applicable to export turnover. The appellant argued that the matter was pending before the Supreme Court and sought the High Court's observations on the matter. The High Court, referencing its earlier decision in CIT vs Tata Elxsi Ltd, dismissed the appeal, noting that the substantial questions of law were already addressed in the cited case.

• Counselvise Citation: [2016] 140 COUNSELVISE.COM (IT) 728525 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 22-04-2016
• Assessment Year: misc
• Other Referred Cases: CIT vs Tata Elxsi Ltd. (2012) 349 ITR 98 (Karn.)
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: E I SANMATHI
• Keywords: Deduction; Export Turnover; Foreign currency; Substantial questions of law; Telecommunication expenses; Total Turnover; Conveyance charges
• Section: 10A; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF APRIL 2016 PRESENT THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA ITA NO.716/2015 BETWEEN 1. PR. COMMISSIONER OF INCOME TAX, C.R.BUILDING, QUEENS ROAD, BANGALORE 2. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-12(2), BANGALORE. ...APPELLANTS (BY SRI.E.I.SANMATHI, ADVOCATE) AND M/S. QUALITY ENGINEERING & SOFTWARE TECHNOLOGIES P.LTD., NO.55, QUEST TOWERS, WHITEFIELD MAIN ROAD, MAHADEVAPURA, BANGALORE-560048. ...RESPONDENT 2 THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:30/07/2015 PASSED IN ITA NO.807/BANG/2012, FOR THE ASSESSMENT YEAR 2010-2011 PRAYING TO DECIDE THE FOREGOING QUESTION OF LAW AND / OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT & MODIFY THE APPELLATE ORDER DATED 30/07/2015 PASSED BY THE ITAT, 'A' BENCH, BENGALURU IN SOUGHT FOR, IN THE RESPONDENT-ASSESSEE'S CASE, IN APPEAL PROCEEDINGS NO. ITA NO. 807/BANG/2012. THIS APPEAL COMING ON FOR ORDERS THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING: JUDGMENT Considering the facts and circumstances, we have found it appropriate to take up the main matter itself, since even as per the learned Counsel appearing for the appellants, the matter is covered by the decision of this Court. 3 2. The appellant-Revenue has preferred the present appeal by raising the following substantial questions of law: 1. Whether on the facts and in the circumstances of the case, the tribunal is justified in law in holding that telecommunication expenses and conveyance charges incurred in foreign currency are to be excluded from total turnover as well for computation of deduction u/s.10A whereas such exclusion is permitted to arrive at export turnover only as per the definitions given in Sec. 10A of the I.T.Act and total turnover has not been defined in the Section”? 2. Whether the tribunal is correct in law in holding that the deduction u/s.10A should be computed in the above manner following the judgment of jurisdictional High Court in the case of 4 CIT vs Tata Elxsi Ltd., which has not become final since the same has not been accepted by the Department and SLP is pending before the Hon’ble Supreme Court? 3. Learned Counsel appearing for the appellants fairly concede that the issue is covered by the decision of this Court in the case of Commissioner of Income Tax And Another Vs. Tata Elxsi Ltd reported at (2012) 349 ITR 98 (Karn.). However, it was submitted that the matter is carried before the Apex Court and therefore, the appropriate observations may be made in the event this Court is not inclined to admit the matter on the ground that substantial questions of law do not arise for consideration. 4. In our view since as on today, the matter is covered by the decision of this Court, it cannot be said that any substantial question of law would arise for 5 consideration. However in the event the Apex Court takes a diff erent view, the appellant-Revenue may be at liberty to take appropriate proceedings in accordance with law. Subject to the aforesaid observations, the appeal is dismissed. Sd/- JUDGE Sd/- JUDGE JT/- "