THE COMMISSIONER OF INCOME TAX vs. M/S GE MEDICAL SYSTEMS (I) (P) LTD

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ITA/411/2012HC KarnatakaKAHC01045430201218 November 2020Bench: ALOK ARADHE,H.T. NARENDRA PRASAD4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that exchange fluctuation gains are liable to be treated as income from export business for computing deduction under Section 80HHC. This decision was based on previous judgments of the Karnataka and Gujarat High Courts.

What were the facts?

The revenue appealed against an ITAT order concerning the tax treatment of exchange fluctuation gains for assessment year 2000-2001. The core dispute was whether these gains should be treated as income from export business for Section 80HHC deduction or as income from other sources.

What were the issues?

Whether exchange fluctuation gains qualify as income from export business for Section 80HHC deduction, and if they should be classified as income from other sources.

Which sections of the Income-tax Act were involved?

Section 80HHC

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 18TH DAY OF NOVEMBER, 2020

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD

I.T.A. NO.411 OF 2012

BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX, C.R. BUILDING, QUEENS ROAD,

BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), PUNE.

3.

THE DY. COMMISSIONER OF INCOME TAX, CIRCLE-11(3), BANGALORE.

... APPELLANTS (BY SRI K.V.ARAVIND, ADV.)

AND: M/S. GE MEDICAL SYSTEMS (I) (P) LTD., NO.122, (PART-1), EPIP, WHITE FIELD ROAD, BANGALORE– 560 066. ... RESPONDENT

(BY MR.PERCY PARDIWALLA, SR. ADV. FOR MR. PAI DHUNGAT ANKUR, ADV. FOR MR. HARISH V.S, ADV.) - - -

THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961, ARISING OUT OF ORDER DATED 13/07/2012 PASSED IN ITA NO.767/BANG/2010, FOR THE ASSESSMENT YEAR 2000-2001, PRAYING TO I. FORMULATE THE SUSTANTIAL QUESTIONS OF LAW STATED THEREIN; II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.767/BANG/2010 DATED 13/07/2012 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE- 1(1), PUNE.

THIS I.T.A. COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT

This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment Year 2000- 2001. The appeal was admitted by a Bench of this Court vide order dated 19.02.2013 on the following substantial questions of law:

‘1. Whether the Tribunal was correct in holding that the exchange fluctuation gain is liable to be treated as income

from export business for computing deduction u/s.80HHC without taking into consideration, the date of raising the sale bill, date of foreign exchange remittance and the date of conversion of foreign exchange into India rupees?

2.

Whether the Tribunal was correct in reversing the finding of the Assessing Officer confirmed by the Appellate Commissioner in holding that the foreign exchange gain is income from other sources as the same would depend on rate of exchange and liable to be treated as income from other sources?’

2.

When the matter was taken up today, learned Senior counsel for the assessee submitted that the substantial questions of law involved in this appeal have already been answered by two decisions of this Court in ‘COMMISSIONER OF INCOME-TAX AND ANOTHER VS. INFOSYS TECHNOLOGIES LTD.’, [2012] 349 ITR 606 (KARN), ‘COMMISSIONER OF INCOME-TAX

AND ANOTHER VS. NOVELL SOFTWARE DEVELOPMENT (I) PVT. LTD.’, [2013] 355 ITR 339 (KARN) as well as decision of the Gujarat High Court in ‘CIT-III VS. M/S.PRIYANKA GEMS’, [2014] 367 ITR 575 (GUJ). The aforesaid submission could not be disputed by learned counsel for the revenue.

3.

For the reasons assigned in the aforesaid decisions, the substantial questions of law framed in this appeal are answered against the revenue and in favour of the assessee.

In the result, the appeal fails and is hereby dismissed.

Sd/- JUDGE

Sd/- JUDGE

dn/- CT-HR

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