THE COMMISSIONER OF INCOME TAX V. M/S IGATE GLOBAL SOLUTIONS LTD

ITA/490/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax and the Deputy Commissioner of Income Tax against M/s. IGATE Global Solutions Ltd. concerning the interpretation and application of Section 10A of the Income Tax Act, 1961, and issues related to Transfer Pricing adjustments. The appellants sought to challenge the decisions of the ITAT Bangalore and the Appellate Commissioner, which had favored the respondent. The High Court of Karnataka, after hearing arguments from both parties, referenced previous judgments to resolve the substantial questions of law raised in the appeal, ultimately dismissing the appeal in favor of the respondent.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 736257 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 20-11-2015
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax vs Tata Elxsi Limited
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: T SURYANARAYANA
• Assessee Lawyers: K V ARAVIND
• Keywords: Assessment Year; Deduction; Export Turnover; Income Tax; Total Turnover; Transfer pricing
• Section: 92C; 260A; 10A; 260(1)(A)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF NOVEMBER, 2015 PRESENT THE HON'BLE MR. JUSTICE VINEET SARAN AND THE HON’BLE MR. JUSTICE MOHAN M. SHANTANAGOUDAR ITA NO.490/2013 BETWEEN: 1. THE COMMISSIONER OF INCOME TAX C R BUILDING, QUEENS ROAD BANGALORE. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(4) RASHTROTHANA BHAVAN NRUPATHUNGA ROAD, BANGALORE. ... APPELLANTS (BY SRI. K.V.ARAVIND, ADV.) AND: M/S.IGATE GLOBAL SOLUTIONS LTD., NO.158-162 & 165-170, EPIP PHASE II, WHITEFIELD, BANGALORE-560 066. …RESPONDENT (BY SRI T.SURYANARAYANA, ADV.,) THIS ITA IS FILED UNDER SEC.260A OF IT ACT, 1961, ARISING OUT OF ORDER DATED 10.05.2013 PASSED IN ITA NO.429/BANG/2012, FOR THE ASSESSMENT YEAR 2004-05, PRAYING TO I. FORMULTE THE SUBSTANTIAL QUESTIONS OF LAW II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONR AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(4), BANGALORE. THIS ITA COMING ON FOR ADMISSION THIS DAY, VINEET SARAN J., DELIVERED THE FOLLOWING: 2 JUDGMENT We have heard Sri K.V.Aravind, learned counsel for the appellants-Revenue as well as Sri T.Suryanarayana, learned counsel for the respondent-assessee and perused the record. 2. This appeal has been filed by the Revenue raising the following substantial questions of law: “i. Whether on the facts and in the circumstances of the case and in law the Tribunal was correct in holding that the expenditure incurred in foreign currency excluded from export turnover has to be excluded from total turnover when there is no provision in Section 10A to exclude from total turnover? ii. Whether on the facts and in the circumstances of the case and in law the Tribunal was correct in holding that the assessee is entitled to deduction under Section 10A of the Act in respect of the Transfer Pricing adjustments made as a apart of profits and gains of the business contrary to Section 92C of the Act?” 3. Learned counsel for the parties have jointly stated that the second question raised in this appeal is covered by the decision of this Court in the case of the same assessee in ITA No.452/2008 dated 17.06.2014. 4. As such, for the reasons given in the aforesaid judgment, the second question of law is answered in favour of the assessee and against the revenue. 3 5. However, insofar as the first question of law is concerned, learned counsel for the parties have stated that the said question is covered by the decision of this Court in the case of Commissioner of Income Tax –vs- Tata Elxsi Limited (2012) 349 ITR 98 wherein the question has been answered in favour of the assessee and against the Revenue. As such, the first question is accordingly answered in favour of the assesee and against the Revenue. 6. It is submitted by learned counsel for the appellants that against the judgment of this Court in the case of Tata Elxsi (supra), an appeal is filed to the Apex Court and is pending consideration. 7. In the event of the Apex Court reversing the judgment of this Court, the assessing authority shall pass consequential orders in terms of Section 260(1)(A) of the Income Tax Act, 1961, in conformity with the outcome of the appeal before the Supreme Court. With the above observation, the appeal stands dismissed. Sd/- JUDGE Sd/- JUDGE TL "