Income Tax Appellate Tribunal - Bangalore
Assistant Commissioner Of Income Tax ... vs M/S Harman Connected Services ... on 15 June, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
BANGALORE BENCH ' A '
BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND
SHRI JASON P BOAZ, ACCOUNTANT MEMBER
I.T. A. No.2141/Bang/2017
(Assessment Year : 2014-15)
Asst. Commissioner of Income Tax,
Circle 3(1)(2), Bangalore. .... Appellant.
Vs.
M/s. Harman Connected Services Technologies Pvt. Ltd.,
C-4 Block, Wing A, Manyata SEz Park,
Nagawara ORR, RAchenahalli Village,
Bangalore. ..... Respondent.
Appellant By : Shri B.R. Ramesh, JCIT (D.R)
Respondent By : Ms. Vidya, Advocate.
Date of Hearing : 12.6.2018.
Date of Pronouncement : 15.06.2018.
O R D E R
Per Shri Jason P Boaz A.M. :
This appeal by Revenue is directed against the order of the CIT(A)-3, Bangalore dated 22.08.2017 for Assessment Year 2014-15.
2. Briefly stated, the facts of the case are as under:- 2 ITA No.2141/Bang/2017
2.1 The assessee, a company engaged in the business of providing IT Enabled Services, filed its original return of income for Assessment Year 2014-15 on 3 0 . 1 1 . 2014 declaring total loss of Rs.15,84,20,984 a nd cla iming a refund of R s.4 ,94,16,150 .
Subsequently, the a ssessee filed revised ret urn on 2 3 . 2 . 2 0 1 6 d e c l a r i n g a t o t a l l o s s o f R s . 1 3 , 9 9 , 9 8 , 7 1 7 . The case was taken up for scrutiny by issue of notice u/s. 143(2) of t h e Income Tax Act, 1961 (in short'the Act'). The assessment was completed u/s.143(3) of the Act vide order dated 23.12.2016, wherein the assessee's loss was determined at Rs.12,89,67,940 in view of the Assessing Officer ('AO') disallowing the assessee's claim for deduction u/s. 10AA of the Act to the extent of Rs.1,10,30,777. On appeal, the CIT(A)-3, Bangalore partly allowed the assessee's appeal vide the impugned order dated 22.8.2017. In doing so, the ld. CIT(A) allowed the assessee's claim for deduction u/s. 10AA of the Act following the decision of the Hon'ble Karnataka High Court in the case of CIT v Tata Elxsi Ltd. (2012) (349 ITR 98) (Kar).
3.1 Aggrieved by the order of the CIT(A)-3, Bangalore dated 22.08.2017 for Assessment Year 2014-15, Revenue has filed this appeal, raising the following grounds:-
"1. The order of the CIT (Appeals) is opposed to law and facts of the case.
2. The learned CIT (Appeals) erred in following the ratio laid down by the Hon'ble High Court in the case of M/s. Tata Elxsi 3 ITA No.2141/Bang/2017 Ltd. (ITA No.70/2009).
3. The learned CIT (Appeals) erred in holding that the expenses reduced from the export turnover must also be reduced from the total turnover since there is no provision under section 10A for exclusion of such expenses from total turnover.
4. The appellant craves leave to add, alter, amend and /or delete any of the grounds mentioned above."
3.2 The ld. DR was heard in support of the grounds raised. 3.3 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncement cited. As regards the issue of reduction of the items of expenditure on foreign travel, communication and insurance incurred in foreign currency attributable to the delivery of computer software outside India, the jurisdictional High Court of Karnataka in the case of CIT v Tata Elxsi Ltd (349 ITR 98) (Kar) has held that when certain expenses are excluded from the export turnover for the purposes of computing deduction admissible under the Act; like u/s. 10A of the Act, such expenses are also to be excluded from total turnover, as export turnover is a part of total turnover. The decision in the case of Tata Elxsi Ltd (supra) has also been followed by the Hon'ble Court in its order in the case of DCIT v Motor Industries Co. Ltd., (ITA No. 776/2006, 744/2007 and 1155/2006 dated 13.06.2014), holding that if any expenditure is sought to be removed from export turnover, then it should also be reduced from total turnover for the purposes of computing the eligible deduction u/s. 10A of the Act. In this legal and factual matrix of the case, as discussed above, we find no reason to 4 ITA No.2141/Bang/2017 interfere with or deviate from the finding rendered by the ld. CIT(A) on this issue, and therefore uphold the same. Consequently, the grounds S.Nos. 1 to 4 raised by revenue are dismissed.
4. In the result, Revenue's appeal for Assessment Year 2014-15 is dismissed.
Pronounced in the open court on this 15th day of June, 2018.
Sd/- Sd/-
(N.V. VASUDEVAN) (JASON P BOAZ)
Judicial Member Accountant Member
Bangalore,
Dt.15.06.2018.
*Reddy gp
Copy to :
1 Appellant 4 CIT(A)
2 Respondent 5 DR. ITAT, Bangalore
3 CIT 6 Guard File
Senior Private Secretary
Income Tax Appellate Tribunal
Bangalore.