ITO WARD-1(1)(2), BANGALORE vs. M/S. ANTHEM BIOSCIENCES PVT LTD., BANGALORE

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ITA 1841/BANG/2016Status: DisposedITAT Bangalore02 December 2016AY 2010-115 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that expenses excluded from export turnover must also be excluded from total turnover for Section 10B deduction. Furthermore, the deduction under Section 10B is to be computed before setting off brought forward losses.

What were the facts?

The assessee, a 100% export-oriented unit, claimed deduction under Section 10B. The AO recomputed the deduction by excluding certain expenses from export turnover without deducting them from total turnover and by setting off brought forward losses. The CIT(A) allowed the assessee's appeal.

What were the issues?

Whether expenses excluded from export turnover should also be excluded from total turnover for Section 10B deduction, and whether brought forward losses need to be set off before computing Section 10B deduction.

Which sections of the Income-tax Act were involved?

Section 10B

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, “SMC-B” BENCH : BANGALORE

Before: SHRI A. K. GARODIA & SHRI GEORGE GEORGE K

For Respondent: Ms. S. Praveena, Addl. CIT
Hearing: 30.11.2016Pronounced: 02.12.2016

This appeal at instance of department is directed against CIT(A) order dt:30.08.2016. The relevant assessment year is 2010 – 2011.

2.

Grounds raised read as follows:

Brief facts of the case are as follows: 3.

Assessee is company, having 100% export oriented undertaking. For AY 2010-2011, The return of income was filed declaring total income of Rs.22,85,950/- after claiming exemption u/s 10B to the tune of Rs.3,64,07,920/-. The assessment u/s 143(3) was completed vide order dt 31.01.2013. In assessment completed, the AO recomputed deduction u/s 10B of the Act by excluding from Export Turnover, certain expenses without deducting the same from Total Turnover. The AO further held that deduction u/s 10B is to allowed only after setting off the brought forward losses.

4.

Aggrieved, the assessee preferred on appeal to the First Appellate Authority. The CIT(A) allowed the appeal of the assessee. The CIT(A) followed the judgments of the Hon’ble Jurisdictional High Court in the case of CIT vs. Yokogawa India Ltd. (341 ITR 385) and CIT vs. Tata Elxsi (349 ITR 98).

5.

Aggrieved, the revenue has filed the present appeal before the Tribunal, the learned DR relied on the grounds raised. The learned AR submitted that the issues raised are covered in favour of assessee by jurisdictional High Court Judgments, which has been relied on by the CIT (A).

6.

I have heard rival submission and perused the material on record. The Hon’ble High court in the case of CIT vs Tata Elxsi (supra) has held that expenditure excluded from Export Turnover, has to be excluded from Export Turnover, has to be excluded also from the total turnover, while computing deduction u/s 10B of the Act. Further, The Hon’ble high court in the case of CIT vs Yokogawa India Ltd (supra) has held that deduction u/s 10B of the Act is to be computed, before setting off the forward loses. In view of above two judgments of the Hon’ble High court, I hold, CIT (A) is justified in allowing the appeal of the assessee. It is ordered accordingly.

7.

In the result, the appeal of Department is Dismissed.

Order pronounced in the open court on 02-12-2016.

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