Commissioner of Income Tax-II vs. Kernex Micro Systems (India) Limited

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU

I.T.T.A. No. 412 of 2013

DATED:12.9.2013

Between: Commissioner of Income Tax-II, Hyderabad. … Appellant

And

M/s. Kernex Micro Systems (India) Ltd., Hyderabad. ….Respondent

THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA AND THE HON’BLE SRI JUSTICE K.C. BHANU

I.T.T.A. No. 412 of 2013

JUDGMENT: (per the Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta)

This appeal is sought to be admitted on the following suggested questions of law:

A) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in treating the expression of profits of the business as meaning only the profits of the ‘eligible business’ and not the profits of the business as computed under the profits and gains of the business ? B) Whether on the facts and in the circumstances of the case, the Appellate Tribunal is correct in ignoring the provisions of Section 80AB of the Income Tax Act, 1961 which over rides all other sections for the purpose of deduction in Chapter VI A of the Income Tax Act, 1961 ?

We have heard Mr. S.R. Ashok, learned Senior Counsel appearing for the appellant and have gone through the impugned judgment and order of the learned Tribunal. The learned Tribunal, while rendering the judgment has relied on the decision of the Tribunal of Mumbai Bench in Datamatics Ltd., vs. ACIT[1]. Thereafter, the learned Tribunal has taken the view that on the facts and circumstances, the total turnover is the turnover for the purpose of computation of

the real business of the assessee for giving deduction under Section 80HHE. The learned Tribunal has correctly applied the provisions of Section 80HHE. The aforesaid Section clearly mentions that the profits derived from other business of assessee cannot be taken into consideration. It is therefore, correctly held by the Tribunal that the total turnover for the purpose of Section 80HHE is only the turnover of the computer software both in India and abroad has to be considered and turnover of business not connected with software business cannot be considered to include in the total turnover. In this connection, the learned Tribunal relied on the judgment of the Pune Tribunal in the case of Patni Computer Systems Ltd. Vs. DCIT[2] and Infosys Technologies Ltd., vs. DCIT[3].

We, therefore, do not find any reason to entertain the appeal and to decide the issue involved in this appeal. The appeal is accordingly dismissed.

___________________ K.J. SENGUPTA, CJ

______________ K.C. BHANU, J 12.9.2013

PNB

[1] [2007] 111 TTJ (Mum) 55 [2] 60 DTR 113

[3] 45 SOT 157 (Bang)