Karnataka High Court
The Commissioner Of Income Tax-Iii vs M/S Oak Labs India Pvt Ltd on 13 March, 2012
Bench: N.Kumar, Ravi Malimath
IN THE HIGH COURT OF KARNATAKA A'-ij Bz§N'TeAs_{>:éE é
DATED THI THE T" V.OF"MA'RCH 2012"
THE HON'BLE MF}m%6S%I'IQE N".Ku"MAR
THE HON'BLE' R.IJu:_éTI.CE RAT/I..MALIMAATH
BETWEEN; .
1. The CoIT)rTi..i_ssioner af"Ir'Tcdme
Tax-IIIvI., TACentfa;! --Re~«_enue,'
Bu:ildingsI'CTg-I:eeiT,s RQad__, _ _'
Bangalore _--'5f6-O " __
2. The IVVrTc<_)%Vr1*..e-VVI':a_><4V
wared-12(I.),'~' '
'~Ba:n;gaIVvore. ...APPELLANTS
_V I ;(B\/_SrVi'_ E,I«..iS'avnmathi, Advocate)
M/s.oak~ I_fa'.bsT India Pvt Ltd.,
No.24," 2"" Cross,
I8?' Mam" Road,
VJayaénagar 3'" Block East,
TB-angalore -- 560 041. ...RESPONDENT
***
_.2_ This ITA filed under section 260~A of I.T.Act;"'1961 arising out of order dated 30.08.2011 pas.sed_f.._in ITA.No.1421/Bang/2010, for the AssessrneritV"a_y_ea~ru 2005-06, praying to formulate the substantial.q_ue'stio*n.s *o_fY_ law stated therein, set aside the order passed'i)_y the "ITAT; 'B' Bench, Bangalore in Mmappeal''''"--pi=oce.eding.s 0' ITA.No.1421/Bang/2010 dated 30:.'08.'201_17,as;soughtfor in:
this appeal. * "
This ITA coming on'=._for Vlladrnissiori N.KUMAR J., delivered the foll'o,w'ingg:--
The revenue V"ap"peal against the order passed gvbylme the expenditure incurred expenses as well as travellingw,V a-rid-::V'con'v'vex,'aince expenses is to be reduced " turnover while computing deductionlsundelr SeActi"on"..'i'10A of the Act. This question was considered by this Court in I the c'asT'e«»..o'f Cczmmissioner of Income Tax and another vs. Tata /n ITA No.70/09 and other connected mattersiwhich were disposed 015' on 30.08.2011, where it xi'?-,.h'a.<:.'.zbeen held as under:
profit is to be derived from the total business of the undertaking. Even in the case business of an undertaking, it may export business and domestic business, other words, export turnover and"'dom'_estic turnover. The export turnover 'wouldéi 'b_e",a._g component or part of a denominawtor, other it component being the gomestic __tur_no-ve'r._: other words, to the extent_of,expo'rt.turnover, there would co.mmor;a_li.tv'~-betweenifthe numerator and 'Tithe of the formula.4_:1'n__ vieh/"o:f:: theV:'ve.._commonality, the understanding a4lso'"be""the same. In other v:i_oi_:ds,"if "expoit "turnover in the n'umera;tor"i2;"'to'--.be arrfl/ed" at after excluding 'certain. 'expenses,.._the 'same should also be excluded in conapu-ting the export turnover as a
--.,comi5o.'ierIt. of fitotal turnover in the deriominabtor.----«The reason being the total .turn'o,v"e_r__ includes export turnover. The of the export turnover in the numerator and the denominator cannot be ~~ vdifferent. Therefore, though there is no definition of the term 'total turnover' in Section 10-A, there is nothing in the said Section to M/_ mandate that, what is excluded from the numerator that is export turnover would}, nevertheless form part of the denomin.a__to.r}: Though when a particular word is not by the legislature and an ordinary n'r1eanii_ivg"'is to be attributed to the same, thegisjaid meaning to be attributed to szicnwordighis to be V' in conformity with the-context" in "is used. When the statutefiprescribes' algforrriula and in the said:_f'c'rmula,:_ is defined, and whenthe includes export turno_ver, {the ' V-rrzeaning given to the turnoziver legislature is to be the meaning ofi'ti;e.:totalIfturnover, whenllthe total turnover includes If what is excluded inicomputing".the."export turnover is included whilehuarrivinvg at total turnover, when the export turrio-'.-[er is a component of total tui=nover,__ such an interpretation would run the legislative intent and impermlwissible. If that were the intention of the ~.Ieg;is/ature, they would have expressly stated A' so. If they have not chosen to expressly ' define what the total turnover means, then, V when the total turnover includes exportif--«.:"",,A turnover, the meaning assi'gned -1- legislature to the export turnover_.tiS'V_''_'tQ' ' respected and given :effect. A_ 'to,, interpreting the total turnofver T1" inclusive of the export'tu__rnove.i. "'There'fi:$,»j¢~.:the formula for computation:"'T»of the ldehdutctiion under Section 1v0--.A, wouidlje a"s,under.""-A Profits of the business over of the undertaking X. =..('o-v"er + domestic 3 " 3: turn"[over)TVf'Tota/ Turn Over
1.. matter, we do not seem, anvtii---e}?,ror'-- the Tribunal in rendered in the context oVf.,S'ectio.nVV<S;OHHCV_:tir2:interpreting Section 10-A when..__t'.',1exV' underlying both these 'pio,visions.,_isV'one and the same. Therefore, we notggseetanv merit in these appeals. The question of law framed is answered h"-.i'inV'fagvoAtir of the assessee and against the
--- revenue. "
3. No substantial question of law arises for consideration in this appeal. In that view of the...h1~att~er, there is no merit in this appeal. Accotdliihgifi'fit:
dismissed.
Prs*