THE COMMISSIONER OF INCOME TAX vs. M/S IGATE GLOBAL SOLUTIONS LTD

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ITA/490/2013HC KarnatakaKAHC01041086201320 November 2015Bench: VINEET SARAN,MOHAN M. SHANTANAGOUDAR3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the expenditure incurred in foreign currency excluded from export turnover should also be excluded from total turnover, and that the assessee is entitled to deduction under Section 10A on transfer pricing adjustments. These decisions were based on previous judgments of the same court.

What were the facts?

The Revenue appealed against an ITAT order concerning the assessment year 2004-05. The appeal raised two substantial questions of law regarding the exclusion of foreign currency expenditure from export turnover and the eligibility for deduction under Section 10A on transfer pricing adjustments.

What were the issues?

Whether foreign currency expenditure excluded from export turnover should also be excluded from total turnover, and whether transfer pricing adjustments are eligible for deduction under Section 10A.

Which sections of the Income-tax Act were involved?

Section 10A,Section 92C,Section 260A

AI-generated summary — verify with the full judgment below

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 20TH DAY OF NOVEMBER, 2015

PRESENT

THE HON'BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MR. JUSTICE MOHAN M. SHANTANAGOUDAR

ITA NO.490/2013

BETWEEN:

1.

THE COMMISSIONER OF INCOME TAX

C R BUILDING, QUEENS ROAD

BANGALORE.

2.

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(4) RASHTROTHANA BHAVAN NRUPATHUNGA ROAD, BANGALORE.

... APPELLANTS (BY SRI. K.V.ARAVIND, ADV.)

AND:

M/S.IGATE GLOBAL SOLUTIONS LTD., NO.158-162 & 165-170, EPIP PHASE II, WHITEFIELD, BANGALORE-560 066. …RESPONDENT (BY SRI T.SURYANARAYANA, ADV.,)

THIS ITA IS FILED UNDER SEC.260A OF IT ACT, 1961, ARISING OUT OF ORDER DATED 10.05.2013 PASSED IN ITA NO.429/BANG/2012, FOR THE ASSESSMENT YEAR 2004-05, PRAYING TO I. FORMULTE THE SUBSTANTIAL QUESTIONS OF LAW II. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE, CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONR AND CONFIRM THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(4), BANGALORE.

THIS ITA COMING ON FOR ADMISSION THIS DAY, VINEET SARAN J., DELIVERED THE FOLLOWING:

JUDGMENT

We have heard Sri K.V.Aravind, learned counsel for the appellants-Revenue as well as Sri T.Suryanarayana, learned counsel for the respondent-assessee and perused the record.

2.

This appeal has been filed by the Revenue raising the following substantial questions of law:

“i. Whether on the facts and in the circumstances of the case and in law the Tribunal was correct in holding that the expenditure incurred in foreign currency excluded from export turnover has to be excluded from total turnover when there is no provision in Section 10A to exclude from total turnover?

ii. Whether on the facts and in the circumstances of the case and in law the Tribunal was correct in holding that the assessee is entitled to deduction under Section 10A of the Act in respect of the Transfer Pricing adjustments made as a apart of profits and gains of the business contrary to Section 92C of the Act?”

3.

Learned counsel for the parties have jointly stated that the second question raised in this appeal is covered by the decision of this Court in the case of the same assessee in ITA No.452/2008 dated 17.06.2014.

4.

As such, for the reasons given in the aforesaid judgment, the second question of law is answered in favour of the assessee and against the revenue.

5.

However, insofar as the first question of law is concerned, learned counsel for the parties have stated that the said question is covered by the decision of this Court in the case of Commissioner of Income Tax –vs- Tata Elxsi Limited (2012) 349 ITR 98 wherein the question has been answered in favour of the assessee and against the Revenue. As such, the first question is accordingly answered in favour of the assesee and against the Revenue.

6.

It is submitted by learned counsel for the appellants that against the judgment of this Court in the case of Tata Elxsi (supra), an appeal is filed to the Apex Court and is pending consideration.

7.

In the event of the Apex Court reversing the judgment of this Court, the assessing authority shall pass consequential orders in terms of Section 260(1)(A) of the Income Tax Act, 1961, in conformity with the outcome of the appeal before the Supreme Court.

With the above observation, the appeal stands dismissed.

Sd/-

JUDGE

Sd/-

JUDGE TL

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