THE COMMISSIONER OF INCOME-TAX vs. M/S LUWA INDIA PVT LTD

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF DECEMBER 2020 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD I.T.A. NO.329 OF 2012 BETWEEN: 1. COMMISSIONER OF INCOME TAX-III

C.R. BUILDING, QUEENS ROAD

BANGALORE. 2. DEPUTY COMMISSIONER OF INCOME TAX

RANGE-12(5), BANGALORE. ... APPELLANTS (BY SRI. E.I. SANMATHI, ADV.,) AND: M/S. WIPRO LIMITED DODDAKANNELLI SARJAPUR ROAD BANGALORE-560025. ... RESPONDENT (BY SRI. S. GANESH, SR. COUNSEL FOR SRI. SANDEEP HUILGOL, ADV., FOR SRI. R.B. KRISHNA, ADV.,) - - - THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT, 1961 ARISING OUT OF ORDER DATED 15.06.2012 PASSED IN ITA NO.972/BANG/2011 FOR THE ASSESSMENT YEAR 2007-08, ANNEXURE-A, PRAYING TO (I) FORMULATE THE SUBSTNATIAL QUESTIONS OF LAW AS STATED THEREIN, (II) SET ASIDE THE APPELLATE ORDER DATED 15-06-2012 PASSED BY THE ITAT, 'B'

2 BENCH, BANGALORE IN APEAL PROCEEDINGS ITA NO.972/BANG/2011, ANNEXURE-A. THIS ITA COMING ON FOR FINAL HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short) has been preferred by the revenue. The subject matter of the appeal pertains to the Assessment year 2007-08. The appeal was admitted by a bench of this Court vide order dated 11.09.2013 on the following substantial questions of law: (1) Whether on the facts and circumstances of the case, the tribunal is right in law in directing the assessing authority to set off the loss of the units in STP from other taxable business income even when the same is not permitted under provisions of IT Act? (2) Whether on the facts and circumstances of the case, the tribunal is right in law in allowing the assesse's claim of depreciation of Rs.57,38,83,507/- on

3 software imported even though the assessing authority had rightly disallowed the expenditure under section 40(a)(i) of IT Act as the assessee had failed to comply with the provisions of section 195 while making payments to the vendors? (3) Whether on the facts and circumstances of the case, the tribunal is right in law in setting aside the reallocation of expenditure of Rs.52,51,49,491/- done by assessing authority relating to expenditure booked by Wipro corporate division to other divisions even though the said re-allocation by the assessing authority was in accordance with law? (4) Whether on the facts and circumstances of the case, the tribunal is right in law in setting aside the exclusions made by assessing authority relating to interest income of Rs.6,61,13,968/- and income from sale of scrap of Rs.47,11,908/- from the profits of 10A? (5) Whether on the facts and

4 circumstances of the case, the tribunal is right in law in setting aside the exclusion of Rs.3238,12,53,173/- (incurred in providing technical services outside India) from the export turnover while computing deduction u/s10A? (6) Whether on the facts and circumstances of the case, the tribunal is right in law setting aside the exclusion of sum of Rs.65,69,39,304 received after 30.09.2007 even when the assessing authority had rightly excluded by holding that the said sum was not remitted to India within 6 months from the end of the previous years in terms of section 10A(3) of IT Act? (7) Whether on the facts and circumstances of the case, the tribunal is right in law in setting aside the re- computation of deduction under section 10A/10B/10AA of the IT Act done by assessing authority even though the assessing authority had rightly made the adjustments to the export turnover and the

5 profits of the business by holding that certain units of the company started operations in Bangalore on the strength of the earlier approvals from the STP for expansion of business and as such do not represent new undertakings but only extension of original units? (8) Whether on the facts and circumstances of the case, the tribunal is right in law in setting aside the re-allocation of Corporate Expenses to an extent of Rs.1,34,98,879/- to Wipro Infotech division even though the assessing authority was right in holding that in absence of such allocation of expenses, the profits of the units eligible for deduction in chapter VIA would be artificially enhanced? (9) Whether on the facts and circumstances of the case, the tribunal is right in law in setting aside re-allocation of corporate expenses to the extent of Rs.71,53,718/- to Wipro consumer care division even though the assessing authority was right in law in holding that in absence of

6 such allocation of expenses the profits of the units eligible for deduction in chapter VIA would be artificially enhanced? (10) Whether on the facts and circumstances of the case, the tribunal is right in law in setting aside the exclusion of other income done by assessing authority relating to computation under section deduction 80 IAB of IT Act and allocation of expenses to the unit even when the assessing authority had rightly reallocated corporate expenses to the extent of Rs.8,23,157/- to Kolkata salt lake SEZ developer on the basis that in the absence of such allocation of expenses the profits of the units eligible for deduction in chapter VIA would be artificially enhanced? (11) Whether the order of the tribunal can be said as perverse in nature as the tribunal has relied on its earlier decision which have not reached finality since appeals preferred by Revenue under section 260A against those orders are pending before this Hon'ble High Court in ITA NO.363 of 2009

7 and other connected matters and as such tribunal ought to have awaited decision of this Hon'ble High Court? 2. Learned counsel for the revenue submits that all the remaining issues covered by decisions of this court in M/S WIPRO LTD. VS. DCIT, 383 ITR 179 (KAR) and 'COMMISSIONER OF INCOME-TAX & ANOTHER VS. TATA ELXSI LTD.' 382 ITR 654 (KAR) are pending adjudication at the instance of the revenue before the Supreme Court. In view of aforesaid submission needless to state that the Assessing Officer shall decide the issues in accordance with the decision which may be rendered by the Supreme Court. 3. For the reasons assigned by us in the judgment passed today in I.T.A.No.464/2017, this appeal also stands disposed of in the same terms and with similar directions. Sd/- JUDGE Sd/- JUDGE ss