THE COMMISSIONER OF INCOME TAX vs. KMG INFOTECH PVT LTD

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ITA/106/2013HC KarnatakaKAHC01007462201317 August 2020Bench: ALOK ARADHE,H.T. NARENDRA PRASAD4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the expenditure incurred in foreign currency, reduced from export turnover, must also be reduced from total turnover for computing deduction under Section 10B. This decision was based on a Supreme Court ruling.

What were the facts?

The Revenue appealed against an ITAT order concerning the computation of deduction under Section 10B of the Income Tax Act. The core issue was whether expenditure in foreign currency, reduced from export turnover, should also be reduced from total turnover.

What were the issues?

The key issue was the correct method of calculating the deduction under Section 10B, specifically regarding the reduction of foreign currency expenditure from total turnover.

Which sections of the Income-tax Act were involved?

Section 10B,Section 260-A

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 17TH DAY OF AUGUST 2020

PRESENT

THE HON’BLE MR. JUSTICE ALOK ARADHE

AND

THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD

I.T.A. NO.106 OF 2013

BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX

C.R. BUILDING, QUEENS ROAD

BANGALORE.

2.

THE ASST. COMMISSIONER OF INCOME-TAX

CIRCLE-11(5), C.R. BUILDING

QUEENS ROAD, BANGALORE. ... APPELLANTS (BY Mr. M. DILIP, A/W Mr. K.V. ARAVIND, ADVS.)

AND:

KMG INFOTECH PVT. LTD., UNIT NO.201/202 VANGUARD RISE NO.163 KONENA AGRAHARA, OFF AIRPORT ROAD BANGALORE-560017. ... RESPONDENT

(BY Ms. MANASA ANANTHAN, ADV., FOR Mr. T. SURYANARAYANA, ADV.,) - - -

THIS I.T.A. IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961, ARISING OUT OF ORDER DATED 31-10-2012 PASSED IN ITA NO.280/BANG/2012, FOR THE ASSESSMENT YEAR 2006-07 PRAYING TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN. II. ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BENGALURU IN

ITA NO.280/BANG/2012 DATED:31-10-2012 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-11(5), BANGALORE.

THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING:

JUDGMENT

Mr.K.V.Aravind, learned counsel along with Mr.M.Dilip, learned counsel for the revenue. Smt.Manasa Ananthan, learned counsel for Mr.T.Suryanarayana, learned counsel for the assessee.

2.

This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been preferred by the revenue which was admitted by a Bench of this Court on 11.07.2013 on the following substantial question of law:

“Whether the Appellate Authorities were correct in holding that the expenditure incurred in foreign currency reduced from export turnover has to be reduced from total turnover for computing deduction under Section 10B of the Act in the absence of any provisions in Section 10B of the Act which requires the concerned expenses to be reduced from total turnover also?”

3.

When the matter was taken up today, learned counsel for the revenue fairly submitted that the substantial question of law has been answered against the revenue by the Supreme Court in ‘COMMISSIONER OF INCOME-TAX, CENTRAL-III Vs. HCL TECHNOLOGIES LTD.’ (2018) 302 CTR 191 (SC).

4.

In view of the aforesaid enunciation of law, the substantial question of law framed by this Court in this

appeal is answered against the revenue and in favour of the assessee. In the result, the appeal is dismissed.

Sd/- JUDGE

Sd/- JUDGE

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