DCIT, BANGALORE vs. M/S KALKI COMMUNICATIONS TECH LTD., BANGALORE

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ITA 795/BANG/2015Status: DisposedITAT Bangalore28 October 2015AY 2011-123 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal confirmed the CIT(Appeals)'s order, holding that the jurisdictional High Court's judgment in CIT v. Tata Elxsi Ltd. is a binding precedent. The pendency of a Special Leave Petition (SLP) before the Supreme Court does not negate this binding nature.

What were the facts?

The assessee, a software development company, objected to the Assessing Officer's curtailment of deduction under Section 10A by excluding telecommunication and travel expenses from export turnover. The CIT(Appeals) directed the AO to follow the jurisdictional High Court's ruling in CIT v. Tata Elxsi Ltd.

What were the issues?

Whether the CIT(Appeals) erred in directing the AO to follow a jurisdictional High Court judgment when a SLP is pending before the Supreme Court, and the correct method for computing deduction under Section 10A.

Which sections of the Income-tax Act were involved?

Section 10A

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Income Tax Appellate Tribunal, “A” BENCH : BANGALORE

Before: SMT. ASHA VIJAYARAGHAVAN & SHRI ABRAHAM P. GEORGE

For Appellant: Dr. P.K. Srihari, Jt. CIT (DR)
Hearing: 19.10.2015Pronounced: 28.10.2015

Per Asha Vijayaraghavan, Judicial Member

1.

This appeal by the Revenue is directed against the order dated 11.03.2015 of the CIT(Appeals)-4, Bangalore relating to assessment year 2011-12.

2.

The assessee is a company engaged in the business of software development consultancy.

3.

Before the CIT(Appeals), the assessee objected to the curtailment of deduction u/s. 10A of the Act on account of adjustment of export turnover by the Assessing Officer. The AO excluded the value of telecommunication and travel expenses from the export turnover. The assessee contended that it should be reduced from the total turnover also.

4.

The ld. CIT(Appeals) held that the issue is covered by the judgment of the Hon’ble jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd., 349 ITR 98 (Kar) which is a binding precedent and respectfully following the same, he directed the AO to follow the ratio laid down in the aforesaid judgment while computing deduction u/s. 10A of the Act.

Aggrieved, the Revenue has raised the following effective ground:- 5.

“2. On the facts and circumstances of the case, the ld. CIT(A) has erred in directing the AO to follow the ratio laid down by the jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd. (349 ITR 98) (Kar) while computing deduction u/s. 10A, as the Department has preferred a SLP before the Hon’ble Supreme Court on this issue, which is pending adjudication.”

6.

We find that the Revenue has raised a ground that it has preferred a SLP before the Hon’ble Supreme Court on this issue, which is pending for adjudication. We confirm the order of ld. CIT(Appeals) in following the judgment of Hon’ble jurisdictional High Court in the case of Tata Elxsi Ltd. (supra) which is a binding precedent.

7.

In the result, the appeal by the Revenue is dismissed.

Pronounced in the open court on this 28th day of October, 2015.

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