INCOME-TAX OFFICER, BANGALORE vs. M/S.KENNAMETAL SHARED SERVICES PVT. LTD., BANGALORE

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ITA 1547/BANG/2016Status: DisposedITAT Bangalore22 September 2017AY 2008-093 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that telecommunication charges incurred in foreign currency, when reduced from export turnover, should also be reduced from total turnover for Section 10A deduction. This decision was based on the binding precedent of the Karnataka High Court in CIT Vs. Tata Elxsi Ltd.

What were the facts?

The revenue appealed against an order concerning the computation of deduction under Section 10A of the Income Tax Act for the Assessment Year 2008-09. The core dispute involved the exclusion of telecommunication and travel expenses from export turnover and total turnover.

What were the issues?

Whether telecommunication and travel expenses should be excluded from export turnover and total turnover when computing deduction under Section 10A. The Tribunal specifically addressed telecommunication charges in foreign currency.

Which sections of the Income-tax Act were involved?

Section 10A

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, BANGALORE BENCH ‘ C ’

Before: SHRI VIJAY PAL RAO & SHRI JASON P BOAZ

For Appellant: Shri M.K. Biju, JCIT (DR) (ITAT)-3, Bengaluru

Per Shri Vijay Pal Rao, J.M. : This appeal by the revenue is directed against the order dt.22.06.2017 of Commissioner of Income Tax (Appeals)-12, Bangalore for the Assessment Year 2008-09. 2. The revenue has raised the following grounds :

3.

The only issue raised by the revenue in this appeal is regarding exclusion of telecommunication and travel expenses from the export turnover as well as total turnover while computing the deduction under Section 10A of the Income Tax Act, 1961 (in short 'the Act').

4.

Having considered the rival submissions as well as the material on record, we find that the issue of expenditure incurred towards telecommunication charges in foreign currency is reduced from export turnover an equal amount should also be reduced from total turnover while computing the deduction under section 10A of the Act, is covered

1.

Hon’ble Karnataka High Court in the case of CIT Vs. Tata Elxsi Ltd. 349 ITR 98 (Kar). The decision of Hon'ble jurisdictional High Court is a binding precedent for the Bangalore Bench of the Tribunal. Hence, this issue is decided against the revenue and in favour of assessee. 5. In the result, the appeal of revenue is dismissed. Order pronounced in the open court on the 22nd day of Sept.,2017.

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