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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI ARUN KUMAR GARODIA & SHRI LALIT KUMAR
O R D E R Per Shri A.K. Garodia, Accountant Member; This appeal is filed by the revenue which is directed against the order of ld. CIT(A) -5, Bangalore dated 26.12.2016 for Assessment Year 2013-14.
The grounds raised
by the revenue are as under. “1. The order of the Commissioner of Income Tax(Appeals) - 5, Bangalore, is opposed to the law and not on the facts and circumstances of the case.
2. On the facts and in the circumstances of the case, the CIT(A) erred in law in directing the Assessing Officer to reduce the expenditure incurred in travel, telecommunication etc, both from the Export Turnover as well as the Total Turnover for the purpose of computation of deduction u/s.10A of the IT Act without appreciating the fact that the statue allows exclusion of such expenditure only from the Export turnover by way of specific definition of Export Turnover as envisaged by sub-clause(4) of explanation 2 below sub-section 8 of section 10A. On the other hand, there is no specific provision in section 10A or 10AA warranting exclusion of above expenses from total turnover also.
3. For these and other grounds that may be urged upon, the order of Page 2 of 3 the CIT(A) may be reversed and that assessment order be restored. 4. The appellant craves leave to add, alter, amend or delete any other grounds on or before hearing of the appeal.”
The ld. DR of revenue supported the assessment order whereas the ld. AR of assessee supported the order of CIT(A). He also submitted that this issue is now squarely covered in favour of the assessee by the judgement of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Tata Elxsi Ltd. as reported in 349 ITR 98.
We have considered the rival submissions. We find that the CIT(A) had followed the same judgement of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Tata Elxsi Ltd. (supra) and it was held by him that various expenses incurred in foreign currency and reduced by the AO from export turnover should also be reduced from total turnover for the purpose of computing deduction allowable u/s. 10A of the IT Act. As per the judgement of Hon'ble Karnataka High Court cited before us as noted above, it was held that total turnover is sum total of export turnover and domestic turnover and therefore, if any amount is reduced from export turnover then total turnover also goes down by the same amount automatically. Since the decision of CIT(A) is in line with this judgement of Hon'ble Karnataka High Court, we decline to interfere in the order of CIT(A).
In the result, the appeal filed by the revenue is dismissed.
Order pronounced in the open court on the date mentioned on the caption page.