COMMISSIONER OF INCOME TAX vs. M/S SEIMENS INFORMATION

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ITA/378/2012HC KarnatakaKAHC01040358201225 June 2020Bench: ALOK ARADHE,M.NAGAPRASANNA5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. It accepted the assessee's contention that the appeal was not maintainable due to the tax impact being below the threshold stipulated in the relevant CBDT circular.

What were the facts?

The Revenue appealed against an ITAT order concerning the exclusion of certain expenses from total turnover for Section 10A deduction. The assessee argued the appeal was not maintainable due to low tax impact as per a CBDT circular.

What were the issues?

Whether the appeal is maintainable given the tax impact below the threshold specified in CBDT Circular No. 17/2019. The core issue of excluding telecommunication and traveling expenses from total turnover for Section 10A deduction was not adjudicated.

Which sections of the Income-tax Act were involved?

Section 10A,Section 260-A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 25TH DAY OF JUNE, 2020

PRESENT

THE HON'BLE MR. JUSTICE ALOK ARADHE

AND

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

INCOME TAX APPEAL NO.378 OF 2012

BETWEEN:

1.

COMMISSIONER OF INCOME TAX, BENGALURU – III.

2.

DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12 (3), BENGALURU. ... APPELLANTS (BY JEEVAN J. NEERALGI, ADV.)

AND:

M/S SEIMENS INFORMATION PROCESSING SERVICES PVT. LTD., OZONE MANAY TECH PARK, BLOCK -A, 6TH FLOOR,

2 G.B.PALYA, HOSUR ROAD, BENGLURU – 560 068.

... RESPONDENT (BY SRI T. SURYANARAYANA, ADV.)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 29.06.2012 PASSED IN ITA NO.1062/BANG/2011, FOR THE ASSESSMENT YEAR 2005-2006 PRAYING TO:

i. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN.

ii. ALLOW THE APPEAL AND SET ASIDE THE ORDER OF THE ITAT, BENGALURU IN ITA NO. NO.1062/BANG/2011, DATED 29.06.2012 AND ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) – III, BENGALURU DATED 10.08.2011 IN APPEAL NO.ITA NO.70/C- 12(3)/CIT(A) – III /BNG/2008-09.

THIS INCOME TAX APPEAL COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., MADE THE FOLLOWING: JUDGMENT

Sri Jeevan J. Neeralgi, learned counsel for the appellants – Revenue.

Sri T. Suryanarayana, learned counsel for the respondent – assessee.

This appeal is filed under Section 260A of the Income Tax Act, 1961, by the Revenue, being aggrieved by the order dated 29.06.2012 passed by the Income Tax Appellate Tribunal, Bengaluru, in ITA.No.1062/Bang/2011.

2.

The appeal was admitted vide order dated 26.02.2013, for considering the following substantial questions of law:

“(i) Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that telecommunication charges and traveling expenses amounting to Rs.1,72,11,853 in respect of Bangalore unit and similar expenses amounting to Rs.1,87,892 in respect of Chennai unit are to be excluded from total turnover as well for computation of deduction under Section 10A whereas such exclusion is permitted to arrive at export turnover only as per the definitions

4 given in Section 10A of the IT Act and total turnover has not been defined in the Section?

(ii) Whether, the Tribunal is correct in law in holding that the deduction under Section 10A should be computed in the above manner following the judgment of jurisdictional High Court in the case of CIT Vs. Tata Elxsi Ltd., which has not become final since the same has not been accepted by the Department and SLP is pending before the Hon’ble Supreme Court?”

3.

When the matter is taken up today, learned counsel for the assessee submitted that the tax impact involved in the instant appeal is less than Rs.1,00,00,000/- and therefore, the same is not maintainable in view of the Circular No.17/2019 dated 08.08.2019.

5 4. The aforesaid submission is not disputed by the learned counsel for the Revenue.

5.

Accordingly, the appeal is dismissed.

Sd/- JUDGE

Sd/- JUDGE

nvj

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