Income Tax Appellate Tribunal - Chennai
Scope International Pvt Ltd., Chennai vs Department Of Income Tax on 24 July, 2013
IN THE INCOME TAX APPELLATE TRIBUNAL
"C" BENCH, CHENNAI
BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER
AND SHRI V. DURGA RAO, JUDICIAL MEMBER
I.T.A. Nos. 824, 825 & 826/Mds/2013
(Assessment Years : 2005-06, 2006-07 & 2008-09)
The Deputy Commissioner of M/s Scope International Pvt. Ltd.,
Income Tax, No.1, Haddows Road,
Company Circle VI(1), v. Chennai - 600 006.
Chennai - 600 034.
PAN : AAECS 9043 E
(Appellant) (Respondent)
Appellant by : Shri Guru Bashyam, JCIT
Respondent by : Shri V.P. Manikandan, CA
Date of Hearing : 24.07.2013
Date of Pronouncement : 25.07.2013
O R D E R
PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER :
All these appeals have been filed by the Revenue. Grievance of the Revenue in these appeals is that CIT(Appeals) directed the Assessing Officer to exclude bandwidth expenses from total turnover while computing the deduction claimed by the assessee under Section 10A of Income-tax Act, 1961 (in short 'the Act'). As per the Revenue, decision of Special Bench of this Tribunal in the case of 2 I.T.A. Nos. 824 to 826/Mds/13 ITO v. Sak Soft Ltd. (313 ITR 353) had not become final since Revenue had appealed before Hon'ble jurisdictional High Court.
2. Facts apropos are that assessee's claim for deduction under Section 10A was curtailed by the Assessing Officer by excluding communication expenses in the nature of bandwidth charges, from its export turnover. However, Assessing Officer did not deduct such amount from total turnover.
2. Assessee moved in appeal before CIT(Appeals) on this issue as well as certain other issues. CIT(Appeals) held that communication expenses in the nature of bandwidth charges was rightly excluded by the Assessing Officer from the export turnover. However, according to him, once it was excluded from export turnover, necessarily it had to be excluded from the total turnover as well. For taking this view, he relied on the decision of Special Bench in the case of Sak Soft Ltd. (supra).
3. Now before us, learned D.R., strongly assailing the order of CIT(Appeals), submitted that communication expenses, even though it was excluded from export turnover, was still required to be included in the total turnover.
3 I.T.A. Nos. 824 to 826/Mds/13
4. Per contra, learned A.R. submitted that the view taken by the Special Bench in the case of Sak Soft Ltd. (supra) was favoured by Hon'ble Karnataka High Court in the case of CIT v. Samsung Electronics Co. Ltd. (350 ITR 65), CIT v. Tata Elxsi Ltd. (247 CTR
334) and that of Hon'ble Delhi High Court in the case of CIT v. Genpact India (203 Taxman 0632).
5. We have perused the orders and heard the rival submissions. In the case of Sak Soft Ltd. (supra), the Special Bench had clearly held that what were excluded from export turnover had to be excluded from total turnover also while applying the formula for computing deduction under Section 10A of the Act. This view has been endorsed by Hon'ble Karnataka High Court in the case of Samsung Electronics Co. Ltd. (supra) as well as in the case of Tata Elxsi Ltd. (supra). Learned D.R. was unable to place before us any decision of any higher authority which would require us to take a different view. We are, therefore, of the opinion that the CIT(Appeals) was justified in following the decision of Special Bench in the case of Sak Soft Ltd. (supra). We, therefore, do not find any merits in the appeals filed by the Revenue.
4 I.T.A. Nos. 824 to 826/Mds/13
6. In the results, all the appeals filed by the Revenue are dismissed.
Order was pronounced in the Court on Thursday, the 25th of July, 2013, at Chennai.
sd/- sd/-
(V.Durga Rao) (Abraham P. George)
Judicial Member Accountant Member
Chennai,
Dated the 25th July, 2013.
Kri.
Copy to: (1) Appellant
(2) Respondent
(3) CIT(A)-V, Chennai-34
(4) CIT, Chennai-III, Chennai
(5) D.R.
(6) Guard file