THE COMMISSIONER OF INCOME TAX V. NOUS INFOSYSTEMS PRIVATE LTD

ITA/189/2009

AI Insights

The case involves an appeal by the Commissioner of Income Tax and the Assistant Commissioner of Income Tax against Nous Infosystems Private Ltd concerning the assessment year 2004-2005. The appeal was filed under Section 260-A of the Income Tax Act, 1961, challenging the order passed by the ITAT Bangalore. The main issues pertained to the computation of exemption and deduction under Section 10A of the Act, specifically regarding the set off of losses from STP units, the consideration of total turnover for deduction purposes, and the exclusion of foreign currency expenditure from total turnover. The High Court referenced several precedents where similar issues had been decided in favor of the assessee.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 728863 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-04-2015
• Assessment Year: misc
• Other Referred Cases: THE COMMISSIONER OF INCOME TAX vs YOKOGAWA INDIA LTD, THE COMMISSIONER OF INCOME TAX vs SUN MICROSYSTEMS INDIA PVT LTD, COMMISIONER OF INCOME-TAX vs TATA ELXSI LTD
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P DINESH; V R VASUDEVAN
• Assessee Lawyers: K V ARAVIND
• Keywords: Deduction; Exemption; Foreign currency expenditure; Income Tax; STP unit; Total Turnover
• Section: 10A; 260-A

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 6TH DAY OF APRIL 2015 PRESENT THE HON’BLE MR.JUSTICE VINEET SARAN AND THE HON’BLE MRS.JUSTICE S SUJATHA ITA NO.189/2009 BETWEEN 1.THE COMMISSIONER OF INCOME TAX C R BUILDING QUEENS ROAD BANGALORE 2.THE ASST COMMISSIONER OF INCOME TAX CIRCLE-12(2) C R BUILDING BANGALORE. ... APPELLANTS (BY SRI. K V ARAVIND, ADV.) AND 1.NOUS INFOSYSTEMS PRIVATE LTD NO 1, IST MAIN, IST BLOCK KORAMANGALA BANGALORE-34 ... RESPONDENT (BY SRI P DINESHA AND SRI V R VASUDEVAN, ADV.) ITA FILED U/S.260-A OF I.T.ACT, 1961 ARISING OUT OF ORDER DATED 7-11-2008 PASSED IN ITA NO.589/BNG/2008, FOR THE ASSESSMENT YEAR 2004-2005, PRAYING THAT THIS HON'BLE COURT MAY BE PLEASED TO: 2 I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN, II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT BANGALORE IN ITA NO.589/BNG/2008,DATED 7-11-2008,AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 12(2), BANGALORE IN THE INTEREST OF JUSTICE AND EQUITY. THIS APPEAL COMING ON FOR HEARING THIS DAY, VINEET SARAN J., DELIVERED THE FOLLOWING: JUDGMENT Heard Sri K V Aravind – learned counsel for the appellant and Sri P Dinesh, learned counsel for the assesssee. 2. This appeal has been filed raising the following substantial questions of law: 1. Whether the Tribunal was correct in holding that the loss of STP unit cannot be set off against the profits of STP unit and only the profits of the STP unit should be taken into account when computing exemption under Section 10A of the Act? 2. Whether the Tribunal was correct in holding that for the purpose of computing deduction under Section 10A of the Act only 3 total turnover of the business carried on by the undertaking alone should be considered instead of taking into account the total turnover of the entire business carried on by the assessee? 3. Whether the Appellate Authorities were correct in directing the Assessing Officer to exclude the expenditure incurred in foreign currency from the value of total turnover also for the purpose of computing deduction under Section 10A of the Act? 3. It is admitted by the parties that the first question raised in this appeal is covered by the decision rendered by this Court in the case of THE COMMISSIONER OF INCOME TAX vs YOKOGAWA INDIA LTD (341 ITR 385 (kar)) whereby the question has been answered in favour of the assessee and against the revenue. The second question has been decided by this Court in THE COMMISSIONER OF INCOME TAX vs SUN MICROSYSTEMS INDIA PVT LTD (ITA No.203/2009 disposed of on 6.4.2015) wherein also the question raised has been answered in favour of the assessee and against the revenue. 4 The third question has been decided by the Judgment of this Court in the case oaf COMMISSIONER OF INCOME-TAX vs TATA ELXSI LTD. ((2012)349 ITR 98 (Kar)) wherein also the question has been answered in favour of the assessee and against the revenue. 4. In such view of the matter, we are of the view that no substantial questions of law remains to be answered by this Court. Sri K V Aravind, learned counsel for the appellant states that in the case of COMMISSIONER OF INCOME TAX vs YOKOGAWA (supra) and COMMISSIONER OF INCOME-TAX vs TATA ELXSI LTD (supra), appeals have been filed before the Apex Court which have been admitted on the questions of law. 5. In the event, revenue succeeds in the appeals before the Apex Court, then the assessing authority shall pass consequential orders in terms of Section 260(IA) of the Income Tax Act and in 5 accordance with law so as to give effect to the Judgment of the Apex Court. With the aforesaid observations, the appeal is dismissed. Sd/- JUDGE Sd/- JUDGE brn "