Income Tax Appellate Tribunal - Bangalore
Dell International Services India Pvt. ... vs Department Of Income Tax on 26 March, 2009
Page 1 of 4 1 ITA No.696/B/09
IN THE INCOME TAX APPELLATE TRIBUNAL,
BANGALORE BENCH 'A'
BEFORE SHRI GEORGE GEORGE K, J.M.
AND SHRI A MOHAN ALANKAMONY, A.M
ITA No.696/Bang/2009
(Assessment year 2004-05)
The Deputy Commissioner of Income Tax,
LTU, Bangalore. - Appellant
Vs
M/s Dell International Services India
(P) Lomited, No.12/1, 12/2A, 13/1A,
Divyasree Greens, Challaghatta Village,
Varthur, Hobli, Bangalore-71. - Respondent
Appellant by : Shri Jason P Boaz
Respondent by : Shri Ananda Padmanabhan
ORDER
PER GEORGE GEORGE K :
This appeal, filed by the revenue, is directed against the order of learned CIT(A)-IV, dated 26th March, 2009. The asst. year concerned is 2004-05.
2. The solitary issue raised in this appeal, is whether the CIT(A) is justified in directing the Assessing Officer to allow the deduction about reducing telecommunication expenses from the Page 2 of 4 2 ITA No.696/B/09 export turnover as well as the total turnover while computing the deduction u/s 10A in respect of the Bangalore STP Unit of the assessee.
3. The brief facts of the case are as follows:-
The assessee company is engaged in the trade of computer systems, in providing call center, back office and after sales support, IT support and shared services. The return of income was filed on 29.10.2004 declaring a total income of Rs.9,37,31,683/-. Assessment was completed on 27th December, 2006 determining a total income of Rs.44,59,68,980/-. While completing the assessment, the Assessing Officer was of the view, Section 10A requires that any amount of freight, insurance or telecommunication charges attributable to the delivery of article or thing or software outside India should be excluded for the purpose of arriving at the export turnover. Accordingly, Section 10A deduction was reworked by excluding telecommunication charges amounting to Rs.19,11,69,979/- as attributable to delivery of software outside the country from the export turnover.
4. Aggrieved by the order of the Assessing Officer, the assessee was in appeal before the CIT(A). The learned CIT(A), after considering the submissions of the assessee and after perusing the decisions relied upon by the assessee in support of its case, directed the Assessing Officer to re-work the deduction u/s Page 3 of 4 3 ITA No.696/B/09 10A by excluding from export turnover and total turnover the telecommunication charges amounting to Rs.19,11,69,976/-.
5. Aggrieved by the order of the learned CIT(A), the revenue is in appeal before us.
6. When the matter was taken up for hearing, the learned DR relied on the reasoning of the Assessing Officer. The learned AR filed a list of cases relied upon by him and also the decision of the ITAT in ITA No.251 & 309/Bang/2007 for the asst. years 2002-03 and 2003-04 in assessee's own case.
7. We have heard rival submissions and perused the material on record. The issue is covered in favour of the assessee by the decision of the Tribunal in assessee's own case cited supra. Moreover, the decision of Special Bench in the case of ITO v Sak Soft Ltd. 313 ITR (AT) 353 (Chennai) is also in favour of the assessee wherein it was held that 'expenses on freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses incurred in foreign exchange in providing technical services outside India, which are required to be excluded from export turnover is also to be excluded from the total turnover'.
8. Respectfully following the co-ordinate bench decision of Tribunal in assessee's own case and the Special Bench cited supra, we hold that the CIT(A) is justified in directing to exclude Page 4 of 4 4 ITA No.696/B/09 telecommunication charges of Rs.19,11,69,976/- not only from the export turnover but also from the total turnover while computing the deduction u/s 10A of the Act.
9. In the result, the appeal of revenue is dismissed.
Pronounced in the open court on 27th November, 2009.
Sd/- Sd/-
(A MOHAN ALANKAMONY) (GEORGE GEORGE K)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Bangalore,
Dated :27/11/2009
Copy to : 1. The Revenue
2. The Assessee
3. The CIT concerned.
4. The CIT(A) concerned.
5. DR
6. GF
7. GF, ITAT, New Delhi.
MSP/23/11/ By order
Asst. Registrar, ITAT, Bangalore.