COMMISSIONER OF INCOME TAX vs. M/S. THINK SOFT GLOBAL

TCA.No.335//2015 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 26.08.2022 CORAM

THE HONOURABLE MR. JUSTICE R. MAHADEVAN and THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ T.C.A.No. 335 of 2015 The Commissioner of Income Tax, Company Circle III (2) Chennai

.. Appellant Versus M/s. Think Soft Global Services Private Ltd Type-II, Unit 5 Vikram Sarabhai Industrial Estate Thiruvanmiyur, Chennai – 600 041. PAN: AABCT0976G

.. Respondent Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal Madras “C” Bench, Chennai, dated 12.12.2014 passed in ITA No.2054/Mds/2014 in respect of Assessment Year 2006-07. For Appellant : Mr. M.Swaminathan Standing Counsel 1/5 https://www.mhc.tn.gov.in/judis TCA.No.335//2015 JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This Tax Case Appeal has been filed by the appellant / revenue, questioning the correctness of the order dated 12.12.2014 passed by the Income Tax Appellate Tribunal Madras “C” Bench, Chennai in ITA No.2054/Mds/2014 for the Assessment Year 2006-07. 2. On 22.07.2015 this tax case appeal is admitted by this Court on the following substantial questions of law; ' 1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in directing the Assessing Officer to recompute the income in the light of the decision of the Special Bench in the case of Sak Soft by excluding the freight and insurance expenses both from the Export turnover and also from the Total turnover while computing deduction under Section 10A of the Income Tax Act? 2. Whether on the facts and in the circumstances of the case, the Tribunal's finding is bad, especially when Explanation 2(iv) to Section 10A defines the word “Export 2/5 https://www.mhc.tn.gov.in/judis TCA.No.335//2015 Turnover” whereby it had been clearly stated that it would not include freight, telecommunication charges attributable to the delivery of the articles or things or computer software outside India or expenses if any incurred in foreign exchange while computing deduction under Section 10A of the Income Tax Act? 3. Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that for the purpose of applying the formula under sub-section (4) of section 10B, the freight, telecommunications charges or insurance attributable to delivery of articles, or things or computer software outside India or expenses, if any incurred in foreign exchange in providing the technical services outside India ought to be excluded both from the export turnover and from total turnover even though the statute has provided for such exclusion only from the export turnover?” 3. When the matter was taken up for consideration, the learned counsel for the appellant / Revenue brought to the notice of this court the Circular No.17/2019 dated 08.08.2019 issued by the Central Board Direct Taxes, wherein, it is stipulated that appeals shall not be filed/pursued by the Department before the High Court in cases where the tax effect does not exceed 3/5 https://www.mhc.tn.gov.in/judis TCA.No.335//2015 Rs.1,00,00,000/- (Rupees One Crore). It is also submitted that the tax effect in this appeal is less than the threshold limit. 4. In the light of the aforesaid submissions made by the learned counsel for the appellant / Revenue, the present appeal, wherein, the tax effect is said to be less than the monetary limit imposed, is dismissed as withdrawn, keeping open the substantial questions of law for determination in an appropriate case. No costs. [R.M.D,J.] [M.S.Q., J.] 26.08.2022 msr

Index : Yes / No To 1. The Assistant Commissioner of Income Tax, Circle-12(4), Bangalore 2. The Commissioner of Income Tax (Appeals)-III, Chennai. 3. The Income Tax Appellate Tribunal Madras “C” Bench, Chennai, 4/5 https://www.mhc.tn.gov.in/judis TCA.No.335//2015 R. MAHADEVAN, J. and MOHAMMED SHAFFIQ, J. msr T.C.A.No. 335 of 2015 26.08.2022 5/5 https://www.mhc.tn.gov.in/judis