The Commissioner of Income Tax - II V. M/s. HSBC Elecronic Data Processing India Pvt. Ltd.,

ITTA/308/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax-II, Hyderabad against M/s. HSBC Electronic Date Processing India Pvt., Ltd. concerning the interpretation of Section 10A of the Income Tax Act. The primary issues were whether the loss from an exempted unit could be set off against income from a non-exempted unit, the eligibility to make a claim in a revised return not originally claimed, and the characterization of income from the UK Branch and electricity rebates as business income. The Tribunal had previously ruled in favor of the respondent, which the High Court upheld.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 679487 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 30-07-2013
• Assessment Year: misc
• Other Referred Cases: Honeywell International India Pvt. Ltd. vs. DCIT, Sun Engineering Works Pvt. Ltd. (198 ITR 297)
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Business income; Deduction; Exempted unit; Income Tax; Revised return
• Section: 10A

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. No. 308 of 2013 DATE: 30.07.2013 Between: The Commissioner of Income Tax-II, Hyderabad. … Appellant And M/s. HSBC Electronic Date Processing India Pvt., Ltd., HSBC House, Hyderabad. … Respondent This Court made the following: THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU I.T.T.A. No. 308 of 2013 JUDGMENT: (Per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta) This appeal is preferred against the impugned judgment and order of the learned Tribunal, dated 30.11.2010, and sought to be admitted on the following suggested questions of law. “A) Whether on the facts and circumstances of the case, the learned appellate Tribunal is right in holding the provisions of 10A of the Income Tax Act is in the realm of deduction and as such, the loss of exempted unit is eligible for set off against income earned from non-exempted unit? B) Whether on the facts and circumstances of the case, the learned appellate Tribunal is right in holding that the assessee can make a claim afresh in the revised return, though not made in the original return ignoring the decision rendered by the Supreme Court in the case of Sun Engineering Works Pvt., Ltd. (198 ITR 297)? C) Whether on the facts and circumstances of the case, the learned appellate Tribunal is justified in holding that the income earned by the UK Branch and the electricity rebate received from the A.P. Genco partakes the character of income from business and not income from other sources?” We have heard the learned counsel for the appellant and gone through the impugned judgment and order of the learned Tribunal. The learned Tribunal while rendering its decision has relied on the decision of the Delhi Tribunal in the case of Honeywell International India Pvt. Ltd., vs. DCIT[1]. However, it has been stated that the aforesaid judgment is not applicable and wrongly relied on. Moreover, the learned Tribunal has recorded a finding on mixed question of fact and law and held that the income earned from UK Branch shall be treated to be business income and not the income from other sources, since the income has accrued in course of business. It was further found on fact that in terms of the Memorandum of Understanding the assessee company had received certain amount of rebate and this rebate was received in course of carrying on business. Therefore, the learned Tribunal treated the said income as income from business and we uphold such finding. The learned Tribunal has factually found without any element of perversity that the eligibility for deduction under Section 10A of the Act is nothing to do with the taxation of income under the head “income from business”. We agree with this conclusion of the learned Tribunal. It was also held by the learned Tribunal, in our opinion, rightly, that even if the income is not eligible for deduction under Section 10A of the Act, it can still be taxed as business income. Therefore, we do not find any element of law involved in this matter. Hence, the appeal is dismissed. _____________________ K.J. SENGUPTA, CJ ________________ K. C. BHANU, J Date: 30.07.2013 ES [1] 108 TTJ 924 "