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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI A.K. GARODIA & SMT ASHA VIJAYARAGHAVAN
Assessee by : Ms. Vidya Kurup, Advocate Revenue by : Smt. Meera Srivastava, Additional CIT Date of hearing : 26.09.2016 Date of Pronouncement : 13.10.2016 O R D E R
Per A.K. Garodia, Accountant Member
This is a revenue’s appeal directed against the order of learned CIT (Appeals), Bangalore – 2 dated 27.8.2015 for assessment year 2008-09.
The grounds raised by the revenue are as under:-
1. The order of the Ld. CIT (A) is contrary to the facts and circumstances of the case and hence not sustainable.
2. The CIT (A) has erred in directed the AO to exclude the expenditure incurred in foreign currency from both export turnover as well as from total turnover by placing its reliance on the case of Tata Elxsi Ltd., Vs. ACIT ((349 ITR 98)) without appreciating that there is no provision in section 10A that such expenses should be reduced from the total turnover, as clause (iv) of the Explanation to section 10A provides that such expenses are to be reduced only from the export turnover. 3. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (A) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored.
4. The appellant craves leave to add, alter, amend and/or delete ant of grounds mentioned above.
The learned DR of the revenue supported the assessment order, whereas learned AR of the assessee supported the order of learned CIT (Appeals). He also submitted that this issue is covered in favour of the assessee by the judgment of Hon’ble Karnataka High Court rendered in the case of Tata Elxsi Vs. ACIT is reported in 349 ITR 98.
We have considered the rival submissions. We find that the issue is whether the amount incurred by the assessee on telecommunication charges and travelling expenses outside the country amounting to Rs.331.08 lacs reduced by the AO from export turnover is also required to be reduced from total turnover or not. In this regard, it was held by Hon’ble Karnataka High Court that the total turnover is sum total of domestic turnover and export turnover and therefore, if an amount is reduced from export turnover, the amount of total turnover also goes down by the same amount. Hence, by respectfully following this judgment of Hon’ble Karnataka High Court, we decline to interfere in the order of CIT (Appeals).
In the result, the appeal of the revenue is dismissed.
Pronounced in the open court on this 13th day of October, 2016.