THE COMMISSIONER OF INCOME TAX V. M/S EXILANT CONSULTING PVT LTD

ITA/550/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax and the Income Tax Officer against M/s. Exilant Consulting Pvt Ltd. concerning the interpretation and application of Section 10A of the Income Tax Act. The primary issues were whether certain expenditures incurred in foreign currency should be excluded from total turnover and whether unabsorbed depreciation and brought forward losses could be set off from business profits before computing deductions under Section 10A. The Tribunal had previously ruled in favor of the assessee, a decision which the revenue challenged in this appeal.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 763361 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 13-10-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax and another Vs. Tata Elxsi Ltd., Commissioner of Income Tax Vs. Yokogava India Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S PARTHASARATHI
• Assessee Lawyers: K V ARAVIND
• Keywords: Brought forward loss; Deduction; Export Turnover; Income Tax; Total Turnover; Unabsorbed depreciation
• Section: 10A; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 13TH DAY OF OCTOBER, 2014 PRESENT THE HON’BLE Mr. JUSTICE N. KUMAR AND THE HON’BLE Mr. JUSTICE B. MANOHAR I.T.A. No. 550/2013 BETWEEN : -------------- 1. THE COMMISSIONER OF INCOME TAX C.R. BUIDLING QUEENS ROAD BANGALORE. 2. THE INCOME TAX OFFICER, WARD-11(1) RASHTROTHANA BHAVAN NRUPATHUNGA ROAD BANGALORE. … APPELLANTS (BY Sri. K.V. ARAVIND, ADV.) AND : ------- M/S. EXILANT CONSULTING PVT LTD., No. 46 2 SUBBARAMA CHETTY ROAD BASAVANAGUDI BANGALORE – 560 004. … RESPONDENT (BY Sri. S. PARTHASARATHI, ADV.) --- THIS I.T.A. IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT ARISING OUT OF ORDER DATED 03.07.2013 PASSED IN ITA No. 26/BANG/2013 FOR THE ASSESSMENT YEAR 2009-10 WITH A PRAYER TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE AND ETC. THIS I.T.A. COMING ON FOR ORDERS THIS DAY, N. KUMAR, J, DELIVERED THE FOLLOWING; J U D G M E N T The revenue has preferred this appeal against the order passed by the Tribunal granting relief to the assessee. The substantial questions of law which are raised for consideration in this appeal are as under: I. Whether on the facts and in the circumstances 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 3 there is no provision in section 10A to exclude from total turnover? II. Whether on the facts and in the circumstances and in law the Tribunal was correct in holding that the unabsorbed depreciation and the brought forward loss cannot be set of from business profits before computing deduction u/s 10A of the Act when Section 10A of the Act provides for deduction of benefit on the profits and gains? 2. Insofar as the first substantial question of law is concerned, it was subject matter of an appeal before this Court in the case of Commissioner of Income Tax and another Vs. Tata Elxsi Ltd., reported in 349 ITR 98 (Karnataka) where after detailed consideration of the rival contentions the said question was held in favour of the assessee and against the revenue. 3. Insofar as the second substantial question of law is concerned, the same was also subject matter of appeal before this Court in the case of Commissioner of Income Tax Vs. Yokogava 4 India Ltd., reported in 241 ITR 385, where after detailed consideration of the rival contentions the said question was held in favour of the assessee and against the revenue. Therefore we do not see any merit in this appeal as both the substantial questions of law are already answered in favour of the asessee. Accordingly, the appeal is dismissed answering both the substantial questions of law in favour of the assessee and against the revenue. 4. However both the aforesaid judgments are subject matters of appeals before the Apex Court. In the event of the revenue succeeding in the said appeals, the authority shall pass consequential orders in terms of Section 260(1)(1-A) of the Income Tax Act. Sri. Parthasarathi, learned counsel is permitted to file vakalath within four weeks from today. Sd/- JUDGE. Sd/- JUDGE. LRS. "