Karnataka High Court
The Commissioner Of Income Tax vs M/S I Gate Global Solutions Ltd on 17 June, 2014
Bench: N.Kumar, B.Manohar
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 17TH DAY OF JUNE 2014
:PRESENT:
THE HON'BLE MR. JUSTICE N. KUMAR
:AND:
THE HON'BLE MR. JUSTICE B.MANOHAR
I.T.A. NO.453/2008
BETWEEN:
1. THE COMMISSIONER OF INCOME TAX
C.R. BUILDING, QUEENS ROAD,
BANGALORE
2. THE ASSITANT COMMISSIONER
OF INCOME TAX
CIRCLE - 11(3) C.R. BUILDING,
QUEENS ROAD,
BANGALORE. ... APPELLANTS
(BY SRI K V ARAVIND, ADV.)
AND:
M/S I.GATE GLOBAL SOLUTIONS LTD
158-162 (P) & 165 (P) - 170(P) EPIP
PHASE - II , WHITEFIELD
BANGALORE - 06 ... RESPONDENT
(BY SRI SURYANARAYANA, ADV. FOR M/S KING &
PATRIDGE)
******
THIS ITA IS FILED U/S.260-A OF I.T.ACT, 1961
ARISING OUT OF ORDER DATED 27-11-2007 PASSED
2
IN ITA NO. 248/BNG/2007, FOR THE ASSESSMENT
YEAR 2002-03, PRAYING THAT THIS HON'BLE COURT
MAY BE PLEASED TO:
I. FORMULATE THE SUBSTANTIAL QUESTIONS OF
LAW STATED THEREIN,
II. ALLOW THE APPEAL AND SET ASIDE THE ORDER
PASSED BY THE ITAT BANGALORE IN ITA NO.
248/BNG/2007,DATED 27-11-2007 CONFIRM THE
ORDERS OF THE APPELLATE COMMISSIONER AND
CONFIRM THE ORDER PASSED BY THE ASSISTANT
COMMISSIONER OF INCOME TAX ,CIRCLE-
11(3),BANGALORE IN THE INTEREST OF JUSTICE AND
EQUITY.
THIS ITA COMING ON FOR ORDERS, THIS DAY,
N. KUMAR J. DELIVERED THE FOLLOWING:
JUDGMENT
The Revenue has preferred this appeal challenging the order passed by the Income Tax Appellate Tribunal in ITA No.24/Bang/2007 dated 27.11.2007.
2. The appeal is admitted for considering the following substantial question of law:
"(1) Whether the tribunal was correct in holding that up-linking charges deducted for computing export turnover u/s.10A of the Act should also be reduced for computing total 3 turn over when arriving at Section 10A of the Act deduction?
(2) Whether the tribunal was correct in holding that Section 10A of the Act deduction is allowable to the assessee in respect of profit making units only if they are found to be independent and the unit making loss cannot be setoff for the purpose of allowing deduction?
(3) Whether the tribunal was correct in failing to appreciate the substituted Section 10A of the Act by Finance Act, 2000 w.e.f.
1.4.2001 that the deduction is to be allowed u/s.10A of the Act on the total income of the assessee without setting out the loss from non-profit making units?
(4) Whether the tribunal was correct in holding that deduction u/s.10A of the Act is allowable in respect of income computed on the arms length price by ignoring the proviso to Section 92(4) of the Act?"
2. In so far as substantial question of law No.1 is concerned, this Court had an occasion to consider the same in the case of Commissioner of Income Tax and 4 Another Vs. Tata Elxsi Ltd., & Others reported in (2012) 204 TAXMAN 321. In view of the same, the aforesaid substantial questions of law are answered in favour of the assessee and against the Revenue.
3. In so far as substantial question of law Nos.2 & 3 do not arise for consideration and they were also considered by this Court in the case of Commissioner of Income Tax and Another Vs. Yokogawa India Ltd., & Others reported in (2012) 341 ITR 385, and was answered in favour of the assessee and against the Revenue.
4. In so far as substantial question of law Nos.1 to 3 are concerned, the Revenue in both the aforesaid judgments of this Court are before the Apex Court in appeal and are now pending. Therefore, it is appropriate that the assessing authority shall pass consequential order u/s.260(1)(A) of the Act pursuant to the order of the Apex Court.
5. In so far as substantial question of law No.4 is concerned, the error committed by the Assessing Officer 5 was relying on Section 92(C)(4) to a case where Arm's Length Price was determined by the assessee, whereas the said provision applies to a case where Arm's Length Price was determined by the Assessing authority. That mistake has been corrected by the tribunal by setting aside the order passed by the Commissioner as well as the assessing authority.
6. In that view of the matter, we do not see any error committed by the Tribunal in the impugned order. Therefore, the said question is also answered in favour of the assessee and against the Revenue.
Accordingly, the appeal is dismissed.
Sd/-
JUDGE Sd/-
JUDGE PL