Ita/134/2010 Of The Commissioner Of Income Tax v. M/S Ibm Global Services

IN THE HIGH COURT OF KARNATAKA AT BBNGALURU DATED THIS THE 16 DAY OF DBECBKRMBEBR 20 PRESENT THER HON’BLE MR.JUSTICK N.KUMAR| AN ] THR HON’BLBE MR.JUSTICBK B.MANOHAITA NO.134 OF 2010 BETWEEN 1.THE COMMISSIONER OF INCOME-TAX.C.R.BUILDING,QUEENS ROAD,BENGALURU| 2 THE DEPUTY COMMISSIONER OF INCOME-TAX _CIRCLE —- 11 (1)C.R.BUILDING QUEENS ROADBENGALURU| ... APPELLANTS (BY SRI K V ARAVIND, ADV.) AND M/S IBM GLOBAL SERVICESINDIA PVT LIDSUBRAMANYA ARCADE,NO.12, BANNERGHATTA ROAD,BENGALURU-5b60029 _ RESPONDENT (BY SMT VANI H, ADV.) This ITA is filed u/S.2600-A of I.T.Act, 1961arising out of Order dated 30-11-2009 passed in ITA|No./783/BNG/2009, for the Assessment Year 2002 2003, praying that this Hon'ble Court may be pleased|to: 1. formulate the substantial questions of law statedtherein, 11. allow the appeal and set aside the orderpassedby theITALBengaluru,1n ITA.No.783/BNG/2009, dated 30-11-2009, and confirm|the order passed by the Joint Assistant Commissioner|of Income Tax, LTU, Bengaluru, in the interest of|justice and equity. This appeal coming on for hearing this day,NKumar J., delivered the following: JUDGMENT This appeal is preferred by the Revenue againstthe order passed by the Tribunal granting relief to theassessee for the assessment year 2002-2003. | 2. The substantial questions of law that arises for consideration in this appeal are as under: 1.WhethertheAppellateAuthoritiesWETEcorrect in holding that the provision for|obsolescence in inventory of a sum_ oORs.5,/9,77,000/- is an allowable deduction|on account of the up gradation of technology|byignoringthefact.that|theseitems|continued with the assessee and it would be|an allowable deduction in the year when|these items were actually disposed of ?correct in holding that the provision for|obsolescence in inventory of a sum_ oORs.5,/9,77,000/- is an allowable deduction|on account of the up gradation of technology|byignoringthefact.that|theseitems|continued with the assessee and it would be|an allowable deduction in the year when|these items were actually disposed of ? 2.WhethertheAppellateAuthoritiesWETEcorrect in holding that the amount oOfcorrect in holding that the amount oOf provision for obsolescence in inventory of a|sum of Rs.5,79,/7,000/- is also an allowablededuction when the inventory stands valued|on the basis of the principle ‘cost’ or ‘market|value’ whichever is less and thus represent,true value of the inventory as on the last day|of the accounting year ? 3. In the assesssee’s case itself for the assessment.year 2001-2002, this Court had an occasion to.consider the said substantial question of law in ITA.No.445/2008 and by a considered order has held the.said substantial questions of law in favour of theaSSESSCEC,. 4. Following the said judgment in this appeal also,the said questions are answered in favour of the.assessee. Therefore, there is no merit in this appeal.Accordingly, the appeal is dismissed. JT/- Sd/-. JUDGE Sd/-| JUDGE|