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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 1ST DAY OF MARCH 2016
PRESENT
THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MRS.JUSTICE B.V.NAGARATHNA ITA NO.549/2015 BETWEEN:
PR.COMMISSIONER OF INCOME TAX C R BUILDING QUEENS ROAD BANGALORE-560 001
THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-4(1)92) BANGALORE ... APPELLANTS (BY SRI.E.I.SANMATHI, ADVOCATE)
AND
M/S Mc CREADE SOFTWARE (ASIA) PVT.LTD NO.811, 23RD MAIN, 12TH CROSS, J P NAGAR
2 BANGALORE PAN: AABCM1978R ...RESPONDENT
THIS ITA IS FILED UNDER SEC.260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED:14/05/2015 PASSED IN ITA NO.1494/BANG/2014, FOR THE ASSESSMENT YEAR 2009-2010 PRAYING 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: 14/05/2015 PASSED BY THE ITAT, 'B' BENCH, BENGALURU, IN APPEAL PROCEEDINGS NO. ITA NO. 1494/BANG/2014 FOR ASSESSMENT YEAR 2009-2010, AS SOUGHT FOR IN THIS APPEAL.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, JAYANT PATEL J., DELIVERED THE FOLLOWING:
JUDGMENT
The Revenue has preferred the present appeal by raising the following substantial question of law: “Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the lease line charges and other
3 expenses incurred in foreign currency for delivery of software are to be excluded both from total turnover as well as from export turnover for computation of deduction u/s.10A whereas such exclusion is permitted to arrive at export turnover only as per the definitions given in Sec.10A of the IT Act and total turnover has not been defined in the Section and by following the judgment of this Hon’ble Court in the case of CIT vs. Tata Elxsi Ltd., which has not become final since the same has not been accepted by the Department and SLPs filed by the revenue on this issue are pending before the Hon’ble Supreme Court?”
We have heard Mr.E.I.Sanmathi, learned Counsel appearing for the appellants-Revenue.
We may record that so far as the reasoning of the Tribunal are concerned, the Tribunal in para 5.1 and 5.2 has observed thus:
4 “5.1 The revenue challenges the action of the learned CIT(A), in excluding the reimbursement of certain expenses incurred in foreign currency from both export turnover and total turnover, while computing the deduction u/s 10A of the Act. It is also contended that the learned CIT(A) the erred in directing the AO to compute the deduction u/s 10A of the Act, placing reliance on the decision of the Hon’ble Karnataka High Court in the case of CIT Vs Tata Elxsi Ltd (2012) 349 ITR 98(Kar.), which has not become final since the department has not accepted the same and has filed SLP’s before the Hon’ble Apex Court which are pending.
5.2 We have heard both the learned AR and the learned DR in the matter. Taking into consideration the decision rendered by the Hon’ble High Court of Karnataka in the case of Tata Elxsi Ltd. (Supra), we are of the view that the learned CIT(A)’s action in directing the AO that the reimbursement of expenses incurred
5 in foreign currency are to be excluded from both export turnover as well as total turnover while computing the deduction u/s 10A of the Act, is in order. We therefore, dismiss the grounds at sl.nos.2 & 3, raised by the revenue.”
The aforesaid shows that the Tribunal has followed the decision of this Court in the case of Commissioner of Income Tax And Another Vs. Tata Elxsi Ltd. reported at (2012) 349 ITR 98 (Karn.) and hence as such, it cannot be said that any substantial question of law would arise for consideration, as sought to be canvassed.
However, Mr.E.I.Sanmathi, learned Counsel appearing for the appellants-Revenue contended that aforesaid decision of this Court in case of Tata Elxsi Ltd., (supra) is carried before the Apex Court and the
6 matter is pending before the Apex Court and therefore, the question may not be concluded.
We are not impressed by the submission, since as on today, the question is covered by the decision of this Court. Hence, the present appeal does not deserve to be admitted. However, it is observed that in the event the Apex Court holds otherwise, the Revenue may take appropriate proceedings in accordance with law.
The appeal is dismissed accordingly.
Sd/- JUDGE
Sd/- JUDGE
JT/-