THE COMMISSIONER OF INCOME T vs. M/S AVAION TECHNOLOGIES P LTD

TCA.Nos.373 and 376 of 2015 In the High Court of Judicature at Madras Dated : 27.08.2019 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal Nos.373 and 376 of 2015 The Commissioner of Income Tax, Chennai. ...Appellant Vs M/s.Avalon Technologies P. Ltd., TPI Block, B-7, First Main Road, MEPZ-SEZ, Tambaram, Chennai - 600 045. PAN: AACCA4147K ...Respondent APPEALS under Section 260A of the Income Tax Act, 1961 against the common order dated 31.10.2014 made in ITA.Nos.2267 and 2270/Mds/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench for the assessment years 2005-06 and 2008-09. For Appellant: Mr.T.Ravikumar, SSC assisted by Ms.R.Hemalatha, SSC For Respondent: No appearance COMMON JUDGMENT (Judgment was delivered by T.S.Sivagnanam,J) We have heard Mr.T.Ravikumar, learned Senior Standing Counsel assisted by Ms.R.Hemalatha, learned Standing Counsel appearing for the appellant – Revenue. 1/4 http://www.judis.nic.in TCA.Nos.373 and 376 of 2015 2.These appeals, filed by the Revenue under Section 260A of the Income Tax Act, 1961, are directed against the common order dated 31.10.2014 made in ITA.Nos.2267 and 2270/Mds/2013 on the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench for the assessment years 2005-06 and 2008-09. 3.The appeals were admitted on 22.07.2015 on the following substantial questions of law : “i) 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? ii) Is not the finding of the Tribunal bad, especially when Explanation 2(iv) to Section 10A defines the word "Export 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? iii) 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 Section 10B, the freight, telecommunications charges, which are required to be excluded from export turnover as defined under Explanation 2(iii) of Section 10B of the Act should also be excluded from total turnover even though the statute has provided for such exclusion only from the export turnover?"

2/4 http://www.judis.nic.in TCA.Nos.373 and 376 of 2015 4.The learned Senior Standing Counsel for the appellant submits that the above appeals are not pursued by the Revenue on account of the low tax effect in terms of Circular No.17/2019 dated 08.8.2019 issued by the Central Board of Direct Taxes. By the said Circular, the monetary limit for filing or pursuing an appeal before the High Court has been increased to Rs.1 Crore. It is further submitted that the tax effect in the respective cases is less than the threshold limit. 5. In the light of the said submissions, the above tax case appeals are dismissed on account of the low tax effect. The substantial questions of law framed are left open. In the event the tax effect in the respective cases is above the threshold limit fixed in the said circular, liberty is granted to the Revenue to make a mention to this Court to restore the appeals to be heard and decided on merits. No costs. (T.S.S.J.) (V.B.S.J.) 27.08.2019 cse Speaking (or) Non Speaking Order Index : Yes (or) No 3/4 http://www.judis.nic.in TCA.Nos.373 and 376 of 2015 T.S.SIVAGNANAM,J. AND V.BHAVANI SUBBAROYAN,J. cse To 1.M/s.Avalon Technologies P. Ltd., TPI Block, B-7, First Main Road, MEPZ-SEZ, Tambaram, Chennai - 600 045. 2.The Income Tax Appellate Tribunal, Chennai 'A' Bench. TCA.Nos.373 and 376 of 2015 27.08.2019 4/4 http://www.judis.nic.in