Loading judgment…
No AI summary yet for this case.
1/5 IN THE HIGH COURT OF KARNATAKA, BENGALURU
DATED THIS THE 30TH DAY OF AUGUST 2018
PRESENT
THE HON’BLE DR.JUSTICE VINEET KOTHARI
AND
THE HON’BLE MRS.JUSTICE S.SUJATHA
I.T.A. No.942/2017
BETWEEN :
PR. COMMISSIONER OF INCOME TAX-7 C.R. BUILDINGS, QUEENS ROAD, BANGALORE 560 001.
DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-12(4), BANGALORE. ...APPELLANTS
(BY SRI.SANMATHI E.I., ADV.)
AND : M/S TARGET CORPORATION INDIA PVT. LTD EMBASSY BUSINESS PARK, SEZ UNIT, OUTER RING ROAD, BANGALORE 560045 PAN:AAECA8990NA
…RESPONDENT (BY SRI.ANKUR PAI, ADV.)
****
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 09.06.2017 PASSED IN IT[TP]A NO. 1561/B/2012,
Date of Judgment 30-08-2018, ITA No.942/2017 Pr. Commissioner of Income Tax-7 & Another Vs. M/s Target Corporation India Pvt. Ltd., 2/5
FOR THE ASSESSMENT YEAR: 2007-2008, PRAYING THIS HON'BLE COURT TO:DECIDE THE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY THE HON'BLE COURT AS DEEMED FIT AND SET ASIDE THE APPELLATE ORDER DATED: 09.06.2017 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, 'B' BENCH, BANGALORE, IN APPEAL PROCEEDINGS NO. IT[TP]A NO. 1561/BANG/2012 FOR ASSESSMENT YEAR: 2007-2008, AS SOUGHT FOR IN THIS APPEAL; AND TO GRANT SUCH OTHER RELIEF AS DEEMED FIT, INT HE INTEREST OF JUSTICE.
THIS APPEAL COMING ON FOR ORDERS, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
Mr. Sanmathi E.I., Adv. for Appellants – Revenue. Mr.Ankur Pai, Adv. for Respondent-Assessee
This Appeal is filed by the Revenue purportedly raising substantial questions of law arising from the Order of the Income Tax Appellate Tribunal, Bangalore Bench ‘B’, Bangalore, in IT[TP]A No.1561/B/2012 dated 09.06.2017, relating to the Assessment Year 2007-08.
The substantial question of law framed by the Revenue in the Memorandum of Appeal is as under: “Whether on the facts and in the circumstances of the case, that the Tribunal is right in law in including the expenditure incurred in
Date of Judgment 30-08-2018, ITA No.942/2017 Pr. Commissioner of Income Tax-7 & Another Vs. M/s Target Corporation India Pvt. Ltd., 3/5
foreign currency by relying upon the decision of this Hon’ble High Court in the case of CIT vs. Tata Elaxy even when the said decision has not reached finality and no such way of re-computation as directed by the tribunal is provided under the provisions of IT Act and when the Revenue has preferred appeal before this Hon’ble Court against its original order? ”
The issue is covered by the decision of the Hon’ble Supreme Court in the case of Commissioner of Income-tax, Central – III vs. HCL Technologies Ltd., [2018] 93 Taxmann.com 33(SC).
The relevant portion of the judgment of the Hon’ble Supreme Court in the case of HCL Technologies Ltd. (supra), is quoted below for ready reference:- “17. The similar nature of controversy, akin this case, arose before the Karnataka High Court in CIT v. Tata Elxsi Ltd. [2012] 204 Taxman 321/17/taxman.com 100/349 ITR 98. The issue before the Karnataka High Court was whether the Tribunal was correct in holding that while computing relief under Section 10A of the IT Act, the amount of communication expenses should be excluded from the total turnover if the same are reduced from the export turnover? While giving the answer to the issue, the High Court, inter-alia, held that when a
Date of Judgment 30-08-2018, ITA No.942/2017 Pr. Commissioner of Income Tax-7 & Another Vs. M/s Target Corporation India Pvt. Ltd., 4/5
particular word is not defined by the legislature and an ordinary meaning is to be attributed to it, the said ordinary meaning is to be in conformity with the context in which it is used. Hence, what is excluded from ‘export turnover’ must also be excluded from ‘total turnover’, since one of the components of ‘total turnover’ is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible.
XXXXXX
In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature.
Even in common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well”.
Date of Judgment 30-08-2018, ITA No.942/2017 Pr. Commissioner of Income Tax-7 & Another Vs. M/s Target Corporation India Pvt. Ltd., 5/5
Having heard the learned counsels appearing for the parties, we are therefore of the opinion that no substantial question of law arises in the present case. The Appeal filed by the Appellants-Revenue is liable to be dismissed and it is dismissed accordingly. No costs.
Sd/- JUDGE
Sd/- JUDGE