THE COMMISIONER OF INCOME TAX V. M/S AURIGENE DISCOVERY TECHNOLOGIES LTD

ITA/549/2013

AI Insights

This case involves an Income Tax Appeal filed by the Commissioner of Income-Tax and the Income-Tax Officer against M/s. Aurigene Discovery Technologies Ltd. The appeal was based on two substantial questions of law concerning the exclusion of certain expenditures from export turnover and the treatment of unabsorbed depreciation and brought forward loss in the computation of deduction under Section 10B of the Income Tax Act, 1961. The High Court of Karnataka dismissed the appeal, referencing its previous decisions in similar cases, which favored the assessee. The court also mentioned the pending appeals on these issues before the Apex Court.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 728969 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 05-09-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax & Another vs. Tata Elxsi Ltd. & Ors., Commissioner of Income Tax & Another vs. Yokogawa India Ltd. & Ors.
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARAVIND V CHAVAN
• Assessee Lawyers: K V ARAVIND
• Keywords: Brought forward loss; Deduction under section 10B; Export Turnover; Income tax appeal; Total Turnover; Unabsorbed depreciation
• Section: 10B; 260-A; 260(1A)

Judgement Text

" - 1 - IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 5TH DAY OF SEPTEMBER, 2014 PRESENT THE HON’BLE MR.JUSTICE N.KUMAR AND THE HON’BLE MRS.JUSTICE RATHNAKALA INCOME TAX APPEAL NO.549 OF 2013 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX, C.R. BUILDING, 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. AURIGENE DISCOVERY TECHNOLOGIES LTD., NO.39-40, KIADB INDUSTRIAL AREA, ELECTRONIC CITY, PHASE-II, HOSUR ROAD, BANGALORE – 560 100. ...RESPONDENT (BY SRI ARAVIND V. CHAVAN, ADV.) - 2 - THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 12/07/2013 PASSED IN ITA NO.27/BANG/2013, FOR THE ASSESSMENT YEAR 2009-2010, PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BANGALORE IN ITA NO.27/BANG/2013 DATED: 12/07/2013 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD-11(1), BANGALORE. THIS ITA COMING ON FOR ADMISSION THIS DAY, N.KUMAR J., DELIVERED THE FOLLOWING: J U D G M E N T This appeal is preferred by the Revenue raising the following two substantial questions of law: 1. 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 there is no provision in Section 10B to exclude from total turnover? 2. 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 off from business profits before computing deduction u/s.10B of the Act when Section 10B of the - 3 - Act provides for deduction of benefit on the profits and gains? 2. The first substantial question of law is covered by the judgment of this Court in the case of Commissioner of Income Tax & Another –vs- Tata Elxsi Ltd. & Ors. reported in (2012) 349 ITR 98 (Karn). Similarly, the second substantial question of law is also covered by the decision of this Court in the case of Commissioner of Income Tax & Another –vs- Yokogawa India Ltd. & Ors. reported in (2012) 341 ITR 385 (Karn). Therefore, as the said questions of law are already answered in favour of the assessee and against the Revenue, we do not see any merit in this appeal. Accordingly, the appeal is dismissed. However, it was submitted by the Revenue that against the aforesaid two judgments of this Court, appeals are filed and are pending before the Apex Court. Hence, in the event of Revenue succeeding before the Apex Court, the Assessing Authority shall pass consequential orders under Section 260(1A) of the - 4 - Income Tax Act, 1961, as per the orders to be passed by the Apex Court. Sd/- JUDGE Sd/- JUDGE KNM/- "