DCIT, BANGALORE vs. M/S GENERAL MOTORS TECHNICAL CENTER INDIA PVT. LTD.,, BANGALORE

These appeals were heard together and are being disposed of by way of this common order for the sake of convenience.

In the course of hearing, it was agreed by both sides that in these 2 years, MAP has been concluded and therefore, TP grounds raised by both parties in these two years do not survive and there is only one corporate tax issue in the appeal of the Revenue for Assessment Year 2011-12 as per ground Nos.8 and 9 but this issue is also covered in favour of the assessee by the judgment of Hon’ble Karnataka High Court rendered in the case of Tata Elxsi Ltd., as reported in 349 ITR 89 and hence, these grounds of the Revenue are liable to be rejected as per this judgment of Hon’ble Karnataka High Court.

We have considered the rival submissions. We find that this is an admitted position of fact that MAP has been concluded for both these two years in respect of assessee company’s transaction with AE in US. Hence, the TP grounds raised by both sides in these two years do not survive and the same are rejected. In addition to this, there is only one Corporate tax issue in the Revenue’s appeal for Assessment Year 2011-12 as per grounds 8 and 9 and as per these grounds, this is the grievance of the Revenue that DRP was not right in holding that expenses reduced from export turnover should be reduced from total turnover also for the purpose of computing deduction allowable to the assessee under section 10A of the IT Act, 1961. As per this judgment of Hon’ble Karnataka High Court rendered in the case of Tata Elxsi Ltd., (supra), total turnover is sum total of domestic turnover and export turnover and therefore, if an amount is reduced from export turnover, then the total turnover also goes down automatically by the same amount.