Karnataka High Court
Commissioner Of Income Tax - Iii vs M/S Sanyo Lsi Technology India Pvt Ltd on 21 March, 2012
Bench: N.Kumar, Ravi Malimath
IGH COURT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COI
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 24°° DAY OF MARCH 2012 a
THE HOW'BLE MR. JUSTICE N. KUMAR
AND
THE HON'BLE MR. JU STICE RAVI MALIMATH
TTA No. 279120 1b
1. COMMISSIONER OF
INCOME TAX-II,-
REVERUE BUILDINGS, -
QUEENS RCAD, "BANGALORE - 560 001.
2. THE DEPUTY COMMISSIONER OF INCOME TAX
CIRCLE 12{3), BANGALORE.
_ (BY SPI.M. THIRUMALESH, ADVOCATE]
M/e.SARYO LSI
TECHNOLOGY INDIA PRIVATE LIMITED
- UNTT-3, LEVEL 8,
_ DISCOVERER BLOCK
INTERNATIONAL TECHNOLOGY
PARK, WHITEFIELD ROAD
_*. BANGALORE-66 ..RESPONDENT
THIS ITA IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 13.05.2011 PASSED IN ITA L-
ih Cau tT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH ¢ NO.977/BANG/2010, FOR THE ASSESSMENT YEAR 2004-2005, TO FORMULATE THE QUESTIONS OF LAW STATED THEREIN AND TO SET ASIDE. 'THE. APPELLATE ORDER DATED 13.5.2011 IN. 7TA NO.977/BANG/2010 PASSED BY THE TAT, Be . BENCH, BANGALORE. a Se 'THIS. ITA COMING ON FOR ORDERS THIS. Day 7 N.KUMAR, J. DELIVERED THE FOLLOWING: eo | The revenue has preferred this 'appeal challenging the order passed by 'the Tribunal holding that telecormm: anination charges: and 'ravel expenses etc., have to be excluded while computing export turnover and total turnover for the purpose of payment under Section 10A of the Act.
-- SB "the said question arose for consideration : before thie Court in the case of Commissioner of Income Tax va. Tata Etesi 1TA No.70/09 and other " eonnected matters disposed of on 30.8.2011] and | 'this Court has held as under:-
"The formula for computation of the deduction under Section 10-A would be as under: \ IGH CO URT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COL emerges is that, thire should en ' uniformity in the ingredients of both the. a numerator and the denominator of the | formula, since otherwise it "would produce anomalies or absurd results. Section 10-A is a benesicial: section. it is intended -- 'to provide incentives to promote: exports, The incentive is fo exempt profits relatable to exports. In the case. of combined 'business of an assesses, having export business and domestic business, the legislature 4 _ intended to have a formula to ascertain the profits from export business by ._ apportioning the total profits of the business on the basis of furnovers.
- 'Apportionment of profits on the basis of "turnover was accepted as a method of arriving at export profits. In the case of Section 80HHC, the export profit is to be derived from the total business income of the assessee, whereas in Section 10- A, the export profit is to be derived from \ Gh COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH € the total business of the undertaking. --
Even in the case of business of. an a undertaking, it may include ove | business and domestic. business, a oy other words, export. turmover and domestic turnover. The export tumover | would be a component or part of a0 . denominator, the other component being the domestic hurnover. in other words, to the extent of. export. turnover, there wouid be @ commonality between the numeraior and. the denominator of the formuic. In view of the commonality, the understanding should also be the same.
In other words, 1 if the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing _-- "the export turnover as a component of total turnover in the denominator. The . reason being the total turnover includes "export turnover. The components of the export turnover in the mumerator and the denominator cannot be different. Therefore, though there is no definition ofthe term 'total tumnover' in Section 10- A, there is nothing in the said Section to IGH COURT OF KARNATAKAHIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH CO mandate that, what is excluded from the numerator that is export tumnover a would nevertheless form part of the denominator. Though when @ particular a word is not defined by the legislature ns and an ordinary meaning is to be attributed to the same, the said ordinary -- .
meaning to be attributed to such wend is to be in conjorinity with he context in which it is used. When. the statute presirihes a formula and in the said formula, 'export turnover' is defined, . and when the. total turnover' includes export turnover, the very same meaning given to. the. export turnover by the legislature is 'to be adopted while . | understanding the meaning of the total Be aS turnover, when the total turnover
- inchudes export turnover. If what is excuded in computing the export tumover is included while arriving at the
- total turnover, when the export turnover is a component of total turnover. such an interpretation would run counter to If that were the intention of the legislature, they would have expressly oe stated so. If they have not chosen to :
expressly define what the total turnover means, then, when the total tureiqver assigned by the legislature to > the export so, turnover is to be respected and gwen effect to, while inierpreting the 'totcl turnover which is inclusive of the export | turnover. Therefore the - formula for computation -- of the. deduction under Section: 110A, would be. as under: ~ _ Export urn over Profita of the fiatneas * ofthe undertaking. X oe te "Report turnover + domestic turn ove Total Turn Caer
3. "In that view of the matter, as the law is well settled, 'there is no merit in this appeal Accordingly, aT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH COURT OF KARNATAKA HIGH ¢ 'HQRE ADORNS : . "the appeal is + dismissed.
Sd/-
JUDGE Sd/-
JUDGE talb/-,