DCIT, BANGALORE vs. M/S SUZLON WIND INTERNATIONAL LTD., BANGALORE

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ITA 52/BANG/2015Status: DisposedITAT Bangalore02 June 2015AY 2010-113 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that expenses reduced from export turnover must also be reduced from total turnover for Section 10A deduction. The CIT(A)'s order was in line with the jurisdictional High Court's ruling.

What were the facts?

The revenue appealed against the CIT(A)'s order directing the exclusion of foreign currency expense reimbursements from both export and total turnover for Section 10A deduction. The CIT(A) followed the Karnataka High Court's decision in Tata Elxsi Ltd.

What were the issues?

Whether reimbursement of foreign currency expenses should be excluded from export turnover and total turnover for calculating deduction under Section 10A, following jurisdictional High Court precedent.

Which sections of the Income-tax Act were involved?

Section 10A

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, ‘B’ BENCH : BANGALORE

Before: SMT. P. MADHAVI DEVI & SHRI JASON P.BOAZ

For Appellant: Shri Farhat Hussain Qureshi, CIT(DR)
For Respondent: Shri Tata Krishna, Advocate
Hearing: 21/05/2015Pronounced: 02/06/2015

This appeal by the revenue is directed against the order of the CIT(A)-III, Bangalore, dated 07/10/2014 for the assessment year 2010-11. The revenue has raised as many as 5 grounds of appeal but the only grievance is that the CIT(A) has erred in law in directing the AO to exclude reimbursement of expenses such as freight, telecommunication expenses, insurance incurred in M/s.Suzlon Wind International Ltd. Page 2 of 3 foreign currency, both from export turnover as well as total turnover for the purpose of computation of deduction u/s 10A of the Income-tax Act, 1961 [hereinafter referred to as 'the Act' for short] by following the decision of the Hon’ble Karnataka High Court in the case of Tata Elxsi Ltd.,reported in 349 ITR 98 even though the Department has not accepted the same and SLPs are pending before the Hon’ble Supreme Court. Learned Departmental Representative supported the order of the AO while the learned counsel for the assessee placed reliance upon the order of the jurisdictional High Court in the case of Tata Elxsi Ltd., (cited supra).

2. Having regard to the rival contentions and the material on record, we find that the issue is squarely covered in favour of the assessee by the decision of the jurisdictional High Court in the case of Tata Elxsi Ltd., (cited supra) wherein it has been held that if any expenditure is to be reduced from the export turnover then the same should also be reduced from the total turnover for the purpose of computation of deduction u/s 10A of the Act. Since the order of the CIT(A) is in consonance with the decision of the jurisdictional High Court, we see no reason to interfere with the same.

M/s.Suzlon Wind International Ltd. Page 3 of 3 3. In the result, the revenue’s appeal is dismissed.

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