DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), HYDERABAD vs. BA CONTINUUM INDIA PRIVATE LIMITED, HYDERABAD

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH “B”, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA No.1942/Hyd/2017 Assessment Year: 2011-12 Dy. Commissioner of vs. M/s BA Continuum India Income Tax, Cirecle-1(2), Pvt Ltd., Hyderabad. Hyderabad. PAN – AACCC2310C (Appellant) (Respondent) Revenue by : Shri K. Srinivas Reddy Assessee by : Shri S. Raghunathan Date of hearing : 03-05-2018 Date of pronouncement : 09-05-2018 ORDER PER SHRI B. RAMAKOTAIAH, AM: The issue contested in this appeal by Revenue, against the order of CIT(A)-8, Hyderabad dated 18.09.2017, is against the direction given to A.O to exclude communication charges of Rs. 13,96,22,391/-, from the ‘total turnover’ also for the purpose of computation of deduction u/s 10A of the IT Act. 2. Briefly stated, Assessee company is engaged in the business of providing Information Technology enabled services. Assessee claimed deduction u/s 10AA of the IT Act. While calculating the deduction u/s 10A of the IT Act, A.O has excluded an amount of Rs. 13,96,22,391/- out of the expenses debited towards communication expenses, invoking explanation 2 to Sec. 10A and Sec. 10AA of the IT

2 ITA No. 1942/Hyd/2017 M/s BA Continuum Ind Pvt Ltd., Hyderabad. Act. A.O excluded the above amount only from the ‘export turnover’, while not excluding from ‘total turnover’. Assessee while contesting that no communication expenses should be reduced from the ‘export turnover’, however made an alternate plea that whatever expenses have been reduced from the ‘export turnover’ should also be reduced from the ‘total turnover’ relying on the decision of the Hon’ble High Court of Andhra Pradesh in Assessee’s own case for the A.Y 2008-09. On the reason that SLP on the decision of the Hon’ble High Court is pending before the Hon’ble Supreme Court, A.O did not agree and excluded the same only from the ‘export turnover’. 3. Ld. CIT(A) in his order accepted Assessee’s contention since the jurisdictional High Court has given the judgment in Assessee’s own case in favour of Assessee CIT(A) directed A.O to exclude the communication charges both from the ‘export turnover’ and ‘total turnover’ and then compute the exemption u/s 10AA of the IT Act. Revenue is aggrieved and raised the only ground as under: “2. The Ld. CIT(a) erred in directing the A.O to exclude communication charges of Rs. 13,96,22,391/- from the total turnover for the purpose of computation of deduction u/s 10A” 4. This issue now stands covered in favour of Assessee not only by the jurisdiction High Court judgment in Assessee’s own case for A.Y 2008-09 but also by the dismissal of the batch of appeals by Revenue in over 100 cases against the Hon’ble High Court decisions, including, HCL Technologies, Gemplus Jewellery India Ltd., and TATA Elexi Ltd., etc., by the Hon’ble Supreme Court. The

3 ITA No. 1942/Hyd/2017 M/s BA Continuum Ind Pvt Ltd., Hyderabad. Hon’ble Supreme Court has affirmed that while computing the tax holiday benefit u/s 10A of the IT Act exclusions from ‘export turnover’ also have to be reduced from ‘total turnover’ (TS-218-SC-2018). We do not see any merit in Revenue appeal. In view of the decision of the Hon’ble Supreme Court, we dismiss Revenue appeal. 5. In the result appeal filed by Revenue is dismissed. Pronounced in the open court on 09th May, 2018.

Sd/- Sd/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, Dated 09th May, 2018. KRK 1) M/s BA Continuum India Pvt Ltd., Building No. 5, Mind Spece, Raheja I.T. Part, Hi-tech City, Madhapur, Hyderabad-81 2) Dy. CIT, Circle-1(2) Hyderabad. 3) CIT(A) -8, Hyderabad. 4) The Pr.CIT-1, Hyderabad. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File