TOSHIBA SOFTWARE (INDIA) PRIVATE LIMITED vs THE JOINT COMMISSIONER OF INCOME TAX

ITA No.761/2017

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 23RD DAY OF JANUARY 2018

PRESENT

THE HON’BLE MR.H.G.RAMESH ACTING CHIEF JUSTICE

AND

THE HON’BLE MR. JUSTICE P.S.DINESH KUMAR INCOME TAX APPEAL NO. 761/2017

BETWEEN : TOSHIBA SOFTWARE (INDIA) PRIVATE LIMITED [ERSTWHILE TOSHIBA SOFTWARE (INDIA) P. LTD.]

NO.3A, ESSAE VAISHNAVI SOLITAIRE 3RD BLOCK, KORAMANGALA BANGALORE – 560 034 REPRESENTED HEREIN BY ITS MANAGING DIRECTOR MR. HIDEHITO KOKA

...APPELLANT

(BY SRI K.P.KUMAR FOR M/S KING AND PARTRIDGE, ADVOCATES)

AND : 1. THE JOINT COMMISSIONER OF

INCOME TAX (OSD), CIRCLE 12(4)

BMTC BUILDING 80 FEET ROAD

KORAMANGALA 6TH BLOCK

BANGALORE – 560 095

THE PRINCIPAL COMMISSIONER

OF INCOME-TAX-1, BMTC BUILDING 80 FEET ROAD, KORAMANGALA 6TH BLOCK

BANGALORE – 560 095

...RESPONDENTS

(BY SRI K.V.ARAVIND, ADVOCATE)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF I.T.ACT, 1961 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW AND TO SET ASIDE THE

ITA No.761/2017

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ORDER DATED 09.06.2017 PASSED BY THE ITAT, BENGALURU BENCH ‘C’ IN ITA NO.748/BANG/2016 FOR THE ASSESSMENT YEAR 2010-2011.

THIS INCOME TAX APPEAL COMING ON FOR ADMISSION, THIS DAY, THE ACTING CHIEF JUSTICE DELIVERED THE FOLLOWING:

JUDGMENT Ag.CJ (Oral):

The following substantial questions of law are raised in this appeal: “9.1. Whether on facts, in the circumstances and on the grounds urged, the Tribunal was correct in holding that interest on fixed deposits is not includible in the profits eligible for deduction under section 10A of the Act?

9.2. Whether on facts, in the circumstances and on the grounds urged, the Tribunal was right in holding that interest earned out of deposits not made out of any compulsion or necessity would not help augment the export activity of the Appellant without appreciating that fixed deposits in the case of the Appellant were made out of export realisations and advances received and consequently, interest earned therefrom had a direct nexus to the business of the undertaking?

9.3. Whether on facts, in the circumstances and on the grounds urged, the Tribunal erred in not following the decision of this Hon’ble Court in CIT v. Motorola India Electronics P. Ltd [265 CTR 95 (Kar.)], which was rendered on similar facts and is thus squarely applicable to the Appellant?

ITA No.761/2017

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9.4. Whether on facts, in the circumstances and on the grounds urged, the Tribunal ought to have appreciated that the interest income in question was assessable under the head ‘profits and gains of business or profession and not ‘income from other sources’ as held by the 1st Respondent?”

Learned Counsel appearing on both sides jointly submit that in view of the opinion of the Full Bench dated 30.10.2017 rendered in the appeal in I.T.A.No.812/2007, the substantial questions of law raised in the appeal at paras 9.1 and 9.2 (extracted above) are to be answered in the negative and in favour of the assessee and the questions of law raised at paras 9.3 and 9.4 (extracted above) are to be answered in the affirmative and in favour of the assessee. Ordered accordingly. The impugned order of the Tribunal stands modified in terms stated above.

Appeal disposed of.

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ACTING CHIEF JUSTICE

Sd/-

JUDGE

TOSHIBA SOFTWARE (INDIA) PRIVATE LIMITED vs. THE JOINT COMMISSIONER OF INCOME TAX