Another v. Tata Elxsi Ltd., @& Others Reported In(2012) 204 Taxman 321.In View Of The Same, Theaforesaid Substantial Questions Of Law Are Answered Infavour Of The Assessee

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 17 DAY OF JUNE 2014| .PRESENT° THR HON’BLE MR. JUSTICK N. KUMAR *AND: THE HON’BLE MR. JUSTICE B.MANOHAR| I.T.A. NO.453/2008 BETWEEN 1. THR COMMISSIONBR OF INCOME TAX.C.R. BUILDING, QUEENS ROAD,BANGALORE, 2. THR ASSITANT COMMISSIONEROF INCOME TAX.CIRCLE - 11(3) C.R. BUILDING,QUEENS ROAD,BANGALORE. APPELLANTS (BY SRI K V ARAVIND, ADV.) ANDa M/S I.GATE GLOBAL SOLUTIONS LTD158-162 (P) & 1695 (P) — 1/70(P) EPIPHASE - II , WHITEFIELDBANGALORE — O06— RBSPONDENT (BY SRI SURYANARAYANA, ADV. FOR M/S KING &PATRIDGE) KRKEKRE THIS ITA IS FILED U/S.260-A OF I.T.ACT, 1961ARISING OUT OF ORDER DATED 27-11-2007 PASSED| IN ITA NO. 248/BNG/2007, FOR THE ASSESSMENTYEAR 2002-03, PRAYING THAT THIS HON'BLE COURTMAY BE PLKBASED TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OF)LAW STATED THEREIN, Il ALLOW THR APPEAL AND SBT ASIDE THE ORDER|PASSEKHD BY THE ITAT BANGALORE IN £J[TA N248/BNG/2007,DATED 27-11-2007 CONFIRM THEORDERS OF THR APPBLLATK COMMISSIONBR AND|CONFIRM THR ORDER PASSED BY THE ASSISTANT|COMMISSIONER.OFINCOMETAX|s,CIRCLE11(3), BANGALORE IN THE INTEREST OF JUSTICE ANDEQUITY. THIS ITA COMING ON FOR ORDERS, THIS DAY,N, KUMAR J.DBELIVERBED THERE FOLLOWI JUDGMENT The Revenue has preferred this appeal challengingthe order passed by the Income Tax Appellate Tribunalin ITA No.24/Bang/2007 dated 27.11.2007. 2. The appeal is admitted for considering thefollowing substantial question of law: “(1)|Whether the tribunal was correct inholding that up-linking charges deducted for'computing export turnover u/s.10A of the Act|Should also be reduced for computing total) 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 tobe 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 SectionIOA 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 ActP” 2. In so far as substantial question of law No.1 isconcerned, this Court had an occasion to consider the|same in the case ot Commissioner of Income Jax and| Another Vs. Tata Elxsi Ltd., @& Others reported in(2012) 204 TAXMAN 321.In view of the same, theaforesaid substantial questions of law are answered infavour 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 alsoconsidered by this Court in the case of Commissioner ofIncome Tax and Another Vs. Yokogawa India Ltd., &Others reported in(2012) 341 ITR 385,and was}answered in favour of the assessee and against theRevenue. 4. In so far as substantial question of law Nos.1to 3 are concerned, the Revenue in both the aforesaid|judgments of this Court are before the Apex Court inappeal and are now pending. Therefore, it is|appropriate that the assessing authority shall passconsequential order u/s.260(1)(A) of the Act pursuant tothe order of the Apex Court. >. In so far as substantial question of law No.4 isconcerned, the error committed by the Assessing Officer was relying on Section 92(C)(4) to a case where Arm’s|Length Price was determined by the assessee, whereasthe said provision applies to a case where Arm’s LengthPrice was determined by the Assessing authority. Thatmistake has been corrected by the tribunal by settingaside the order passed by the Commissioner as well as.the assessing authority. 4. In so far as substantial question of law Nos.1to 3 are concerned, the Revenue in both the aforesaid|judgments of this Court are before the Apex Court inappeal and are now pending. Therefore, it is|appropriate that the assessing authority shall passconsequential order u/s.260(1)(A) of the Act pursuant tothe order of the Apex Court. >. In so far as substantial question of law No.4 isconcerned, the error committed by the Assessing Officer was relying on Section 92(C)(4) to a case where Arm’s|Length Price was determined by the assessee, whereasthe said provision applies to a case where Arm’s LengthPrice was determined by the Assessing authority. Thatmistake has been corrected by the tribunal by settingaside the order passed by the Commissioner as well as.the assessing authority. 6. In that view of the matter, we do not see anyerror 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. PL| od/-| JUDGE. sd/-|JUDGE.