M/S. FIRST INDIAN CORPORATION PRIVATE LIMITED,BANGALORE vs. DCIT, BANGALORE

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ITA 1138/BANG/2010Status: DisposedITAT Bangalore07 October 2016AY 2006-073 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal allowed the corporate tax issue in favor of the assessee, directing the AO to reduce total turnover by the amount deducted from export turnover. Grounds related to Transfer Pricing were rejected as not pressed.

What were the facts?

The assessee company sought to withdraw grounds related to Transfer Pricing matters due to a MAP resolution. For corporate tax matters, the assessee relied on a Karnataka High Court judgment.

What were the issues?

Whether the assessee is eligible for deduction under Section 10A, and how total turnover should be computed when export turnover is reduced.

Which sections of the Income-tax Act were involved?

Section 10A,Section 143(3),Section 144C

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Income Tax Appellate Tribunal, BANGALORE BENCH ‘B’, BANGALORE

Before: SHRI A. K. GARODIA & SMT VIJAY PAL RAO

For Appellant: Shri Manoj M. Shenoy, C. A

Assessee by : Shri Manoj M. Shenoy, C. A. Revenue by : Miss Neera Malhotra, CIT Date of hearing : 06-10-2016 Date of pronouncement : 07-10-2016 O R D E R PER SHRI A.K.GARODIA, AM

This appeal is filed by the assessee and this is directed against the assessment order passed by the A.O. on 27.07.2010 u/s 143 (3) r.w.s. 144C of the I. T. Act for A. Y. 2006 - 07.

2.

The learned AR of the assessee submitted that as per letter dated 26.06.2015 submitted before the tribunal on 01.07.2015, this is requested by the assessee that the assessee company wishes to withdraw all the grounds relating to TP matters i.e. Ground No. 2 to 5 in view of MAP resolution accepted by the assessee.

Regarding remaining grounds which are in relation to Corporate Tax Matter, he 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 Ltd. as reported in 349 ITR 98.

3.

In reply, learned DR of the revenue supported the orders of the lower authorities.

4.

We have considered the rival submissions and Grounds Nos. 2 to 5 are rejected as not pressed. Regarding Grounds 6 to 12, we decide the corporate tax issue i.e. computation of deduction u/s 10A in favour of the assessee by respectfully following the judgment of Hon’ble Karnataka High Court rendered in the case of Tata Elxsi Ltd. (Supra) and direct the A.O. that the total turnover should also be reduced by Rs. 42,55,295/- being the amount reduced by the A.O. from export turnover because this amount was incurred in foreign currency on account of soft link charges because this was held that total turnover is sum total of export turnover and domestic turnover and therefore, if an amount is reduced from export turnover, the total turnover also gets reduced by the same amount.

These grounds are allowed. Ground No. 1 is general and ground 13 is consequential.

5.

In the result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on the date mentioned on the caption page.

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