DCIT, NEW DELHI vs. M/S SYMPHONY MARKETINGS SOLUTIONS INDIA PVT. LTD., BENGALORE

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ITA 1915/DEL/2017Status: DisposedITAT Delhi24 February 2021AY 2011-124 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer erred in reducing the export turnover by excluding communication, insurance, and travelling expenses. It also stated that not following a High Court judgment solely because an SLP was filed is impermissible.

What were the facts?

The assessee claimed a deduction under Section 10A for IT Enabled Services. The Assessing Officer reduced this deduction by excluding certain expenses from the export turnover, disagreeing with a Karnataka High Court ruling. The CIT(A) partly allowed the assessee's appeal.

What were the issues?

Whether expenses like communication, insurance, and travelling can be reduced from export turnover for Section 10A deduction. Whether a High Court judgment can be ignored due to a pending SLP.

Which sections of the Income-tax Act were involved?

Section 10A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘G’ : NEW DELHI

Before: SHRI R.K. PANDA & SHRI KULDIP SINGH

For Appellant: Shri Vishal Kalra, Advocate
For Respondent: Shri Prakash Dubey, Senior DR
Hearing: 03.02.2021

Date of Hearing : 03.02.2021 Date of Order : 24.02.2021

O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, DCIT, Circle 10 (1), New Delhi (hereinafter referred to as ‘the Revenue’) by filing the present appeal sought to set aside the impugned order dated 25.10.2016 passed by the Commissioner of Income-tax (Appeals), Bengaluru-6, Bengaluru qua the assessment year 2011-12 on the ground that :-

“Whether on the facts and circumstances of the case & in law, the Ld. CIT (A) has erred in deleting the addition of Rs.2,06,11,115/- made by the AO on account of excess deduction claimed u/s 10A of the Act.”

2.

Briefly stated the facts necessary for adjudication of the controversy at hand are : The assessee company is into the business of IT Enabled Services and provision of digital imaging services.

Assessee company claimed deduction under section 10A of the Income-tax Act, 1961 (for short ‘the Act’) to the tune of Rs.29,48,05,888/-. Assessing Officer (AO) has declined to follow the decision rendered by Hon’ble Karnataka High Court in case of M/s. Tata Elxsi Ltd. & Ors. on the ground that the Department has not accepted the same in principle as it has filed SLP before the Hon’ble Supreme Court which is pending for disposal and thereby reduced the eligible deduction u/s 10A of the Act to Rs.27,41,94,773/- from Rs.29,48,05,888/- claimed by the assessee company and added excess claim of deduction of Rs.2,06,11,115/- to the total income of the assessee.

3, Assessee carried the matter before the ld. CIT (A) by way of filing the appeal who has partly allowed the appeal. Feeling aggrieved by the order passed by the ld. CIT (A), the Revenue has come up before the Tribunal by way of filing the present appeal.

4.

We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.

5.

AO has reduced the communication expenses, insurance charges and travelling expenses from the total export turnover by computing the turnover eligible for deduction u/s 10A of the Act and has declined to follow the decision rendered by Hon’ble Karnataka High Court in case of M/s. Tata Elxsi Ltd. & Ors. which is duly applicable to the facts and circumstances of the case as from export turnover, communication expenses, insurance charges and travelling expenses cannot be reduced in order to compute the export turnover for the purpose of deduction u/s 10A of the Act.

6.

Not following the judgment rendered by Hon’ble High Court merely on the ground that the same has been challenged by way of filing of Special Leave Petition (SLP) before the Hon’ble Supreme Court is not permissible as the quasi-judicial authorities require to maintain the judicial discipline by following the decisions rendered by Hon’ble High Court and in case, any such decision is overruled quasi judicial authorities have the remedy under the Act.

6. In view of what has been discussed above, finding no illegality or perversity in the impugned order passed by the ld. CIT (A), present appeal filed by the Revenue is hereby dismissed. Order pronounced in open court on this 24th day of February, 2021.

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