DCIT, BANGALORE vs. M/S COCO LATEX EXPORTS PVT. LTD., BANGALORE

PDF · subscribers
ITA 1042/BANG/2014Status: DisposedITAT Bangalore29 May 2015AY 2007-083 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that as per the jurisdictional High Court's decision, expenses excluded from export turnover must also be excluded from total turnover. Therefore, the CIT(Appeals) order was confirmed.

What were the facts?

The Revenue appealed against the CIT(Appeals) order directing the exclusion of shipping and freight charges from both export and total turnover for computing deduction under Section 10B. The AO had excluded these from export turnover but not from total turnover.

What were the issues?

Whether shipping and freight charges, excluded from export turnover, should also be excluded from total turnover for the purpose of Section 10B deduction.

Which sections of the Income-tax Act were involved?

Section 10B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI N.V. VASUDEVAN & SHRI JASON P. BOAZ

For Appellant: Shri N. Balakrishna, Jt. CIT(DR)
Hearing: 26.05.2015Pronounced: 29.05.2015

Per N.V. Vasudevan, Judicial Member

1.

This appeal by the Revenue is against the order dated 25.3.2014 of the CIT(Appeals)-I, Bangalore relating to assessment year 2007-08.

2.

The only issue that arises for consideration in this appeal is as to whether the CIT(Appeals) was justified in directing the AO to exclude shipping charges of Rs.1,80,29,037, freight charges of Rs.3,627, marine insurance of Rs.2,00,000 from both the export turnover of Rs.16,13,43,923 and total turnover of Rs.16,21,48,371, while computing deduction u/s. 10B of the Act.

3.

According to the AO, as per the definition of export turnover given in clause (iv) to Explanation 2, the expenses incurred for freight expenses attributable to the delivery of the product or software outside India should be reduced from the export turnover. However, the provisions of section 10B do not provide for exclusion of such expenditure from total turnover. In the absence of a definition for total turnover in section 10B, the normal definition of total turnover has to be adopted and as such the expenses which are reduced from the export turnover in accordance with the specific definition cannot be reduced from the total turnover.

4.

On appeal by the assessee, the CIT(Appeals) following the decision of the Hon’ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd., 349 ITR 98 (Karn), held that whatever is excluded from the export turnover, has also to be excluded from the total turnover.

5.

Aggrieved by the order of the CIT(Appeals), the revenue is in appeal before the Tribunal.

6.

The only grievance of the Revenue is that the decision of Hon'ble High Court of Karnataka in Tata Elxsi (supra) has not attained finality and a SLP by the department is pending before the Hon'ble Supreme Court. We are of the view that as of today, law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us. We therefore hold that the order of CIT(A) does not call for any interference and accordingly the same is confirmed.

In the result, the appeal by the Revenue is dismissed. 7.

Pronounced in the open court on this 29th day of May, 2015.

More judgments on Section 10B

All 1,217 judgments and leading authorities on Section 10B →

Recent GST High Court judgments

Search GST case law →