DCIT, BANGALORE vs. MPHASIS SOFTWARE & SERVICES (INDIA) PVT. LTD., BANGALORE

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ITA 1032/BANG/2015Status: DisposedITAT Bangalore27 November 2015AY 2006-073 pages
AI SummaryDismissed

What did the Tribunal hold?

The CIT(A) held that telecommunication expenditure deducted from export turnover must also be deducted from total turnover for calculating Section 10B deduction, following the jurisdictional High Court's precedent. The Tribunal upheld this decision.

What were the facts?

The Assessing Officer (AO) excluded telecommunication expenditure from export turnover while calculating deduction under Section 10B. However, the AO did not deduct this expenditure from the total turnover. The assessee appealed this decision.

What were the issues?

Whether telecommunication charges should be deducted from both export turnover and total turnover when calculating deduction under Section 10B of the Income-tax Act.

Which sections of the Income-tax Act were involved?

Section 10B

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Income Tax Appellate Tribunal, BANGALORE BENCH C, BANGALORE

Before: SHRI. ABRAHAM P. GEORGE & SHRI. VIJAYPAL RAO

For Appellant: Shri. B. R. Sudheendra, CA

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. VIJAYPAL RAO, JUDICIAL MEMBER (Assessment Year : 2006-07) Deputy Commissioner of Income tax, Circle -12(1), Bangalore .. Appellant v. Mphasis Software & Services (India) P. Ltd, 6th floor, A Block, Bagmane Techpark, Byrasandra, C. V. Raman Nagar, Bangalore 560 093 .. Respondent PAN : AACCM5986G Assessee by : Shri. B. R. Sudheendra, CA Revenue by : Shri. Sanjay Kumar, CIT- III Heard on : 24.11.2015 Pronounced on :27.11.2015 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :

In this appeal filed by the Revenue its grievance is that CIT (A)-4, Bengaluru, directed the AO to recompute the deduction allowed to the assessee u/s.10A of the Income-tax Act, 1961 (‘the Act’ in short), after ITA.1032/Bang/2015 Page - 2 reducing telecommunication charges from export turnover as well as the total turnover relying on the judgment of Hon’ble jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd (349 ITR 98).

2.

Assessee which is a company engaged in the development of software had claimed deduction u/s.10B of the Act. AO excluded from the export turnover the telecommunication expenditure while working out the eligible deduction under the said section. However, the AO did not deduct the said amount from the total turnover while working out the deduction u/s.10B of the Act.

3.

Appeal of the assessee before the CIT (A) in this regard was successful. CIT (A) relying on the judgment of Hon’ble jurisdictional High Court in the case of Tata Elxsi Ltd (supra), held that what was deducted from export turnover had to be reduced from the total turnover also while working out the eligible deduction u/s.10B of the Act.

4.

We have perused the orders and heard the rival contentions. Just for a reason that an SLP has been filed before the Hon’ble Supreme Court against the view taken by the Hon’ble jurisdictional High Court, we cannot ITA.1032/Bang/2015 Page - 3 deviate from the said view. We are opinion that CIT (A) was justified in giving the directions. No interference is required.

5.

Appeal of the Revenue stands dismissed.

Order pronounced in the open court on 27th day of November, 2015.

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