Ita/203/2009 Of The Commissioner Of Income Tax v. Sun Microsystems India Pvt Ltd

IN THE HIGH COURT OF KARNATAKA AT.BENGALURU DATED THIS THE 6 DAY OF APRIL 2015) PRESENT THE HON’BLE MR.JUSTICE VINEET SARAN| AND THE HON’BLE MRS.JUSTICE S SUJATHAITA NO.Z203 OF 200 BETWEEN 1.THE COMMISSIONER OF INCOME TAXCR BUILDINGCR BUILDING QUEENS ROADBANGALOREBANGALORE 2.THE ASST. COMMISSIONBR OF INCOME TAX CIRCLE -12(3) C.R.BUILDING QUEENS ROAD BANGALORE ... APPELLANTS (BY SRI K V ARAVIND, ADV.) AND SUN MICROSYSTEMS INDIA PVT LID6TH FLOOR, DIVYASHREE CHAMBERSLANGFORD ROADBANGALORE 560025. .. RESPONDENT (BY SRI A SHANKAR @& SRI M LAVA, ADV) THIS TTA IS FILED UNDER SECTION 260-A OF.I.T.ACT, 1961 ARISING OUT OF ORDER DATED 14-11-2008 PASSED IN ITA NO.661/BNG/2008, FOR THE ASSESSMENT YEAR 2003-2004, PRAYING THAT THIS—HON'BLE COURT MAY BERK PLEASKD TO I. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAWSTATED THEREIN, Ill ALLOW THR APPBAL AND SET ASIDE THE ORDERPASSED.BY|THEITAT.BANGALORE|IN|ITANO.661/BNG/2008, DATED 14-11-2008, CONFIRMINGTHR ORDER OF THR APPKRLLATK COMMISSIONBR ANDCONFIRM THR ORDER PASSEKED BY THR ASSISTANCOMMISSIONEROFINCOMETAX, CIRCLE-12(3),BANGALORE IN THE INTBRBEBST OF JUSTICK ANEOUITY. THIS APPBAL COMING ON FOR ADMISSION THIS.DAY,VINEET SARAN J., DELIVERED THE FOLLOWING: JUDGMENT Wehaveheard|SriK.V.Aravind,learned|Counsel appearing for the appellants as well as Sri|A.Shankar, learned Counsel appearing for _ threspondent and perused the record. 2. The sole question involved in the presentappeal is as to whether after the amendment broughtin sub-section 4 of Section 1OA of the Income Tax Act,1961 with effectfrom 01.04.2001, while computing thededuction the total turnover of the undertaking is to be considered or the total turnover of the business of theCompany tis to be considered P 3. The briet facts of this case are that on thebasis of the amended provision of subsection (4) of|section 10A of the Income Tax Act, 1961 (hereinafter|referred to as ‘the Act’ for brevity), the assessee had|filed his returns which were accepted by the|Assessing Officer. The Commissioner re-opened the|matter under Section 263 oft the Act and was oft thopinion that the order of the Assessing Officer was|erroneous as well as prejudicial to the interest of theRevenue, as according to the Commissioner of the|Income Tax, the turnover of the entire business of theCompany ought to have been considered and not ofthe undertaking in question. In the appeal filed by|the assessee, the Tribunal has set aside the order ofthe Commissioner of Income Tax. Aggrieved by the|said order, this appeal has been filed by the Revenueraising the following substantial question of law: “Whether the Tribunal was correct in settingaside the order passed u/s.263 of the Act,|where the commissioner had held that the'computation of deduction u/s.10OA of the Actwhen computing total income should be inrespect of both STP units as well as non-STP|units Le., in respect of the entire company has.been contrary to the provision and withoutjurisdiction?” 4. Learned Counsel tor the appellants has notbeen able to justify as to how after the amendment otfsub-section (4) of Sub-section 1OA of the Act with|effect from 01.04.2001, the total turnover of thebusiness carried on by the assessee could have been|considered and not the total turnover of the businesscarried on by the undertaking, as has been provided|by the amended provision. o. Learned Counsel for the appellants thensubmitted that even though the interpretation taken|by the Assessing Officer may be correct, no reasons|have been given by the Assessing Officer in arriving| at such a conclusion and thus the order was rightly|taken up for revision under Section 263 of the Act. | 4. Learned Counsel tor the appellants has notbeen able to justify as to how after the amendment otfsub-section (4) of Sub-section 1OA of the Act with|effect from 01.04.2001, the total turnover of thebusiness carried on by the assessee could have been|considered and not the total turnover of the businesscarried on by the undertaking, as has been provided|by the amended provision. o. Learned Counsel for the appellants thensubmitted that even though the interpretation taken|by the Assessing Officer may be correct, no reasons|have been given by the Assessing Officer in arriving| at such a conclusion and thus the order was rightly|taken up for revision under Section 263 of the Act. | 6. We are unable to accept the said submission|of the learned Counsel for the appellants, as by|accepting the return filed by the assessee in which|the requisite details had been given, it was not|necessary for the Assessing Officer to give detailed|reasons, although it could be said that had such|reasons been given, it may have been better.|However, the order cannot be said to be erroneous insofar as it is prejudicial to the interests of the|revenue or taken up for revision under Section 263of the Act, merely because no reasons had been|given, even though the order of the Assessing Officer|was in terms of the amended provision of Section|1OA(4) of the Act. As such, we are of the view that nosubstantial question of law arises for determination|of this Court. ,�)�� H���.-�/99-/5�38�/??61234:5F�238B388-2�� �����������������������������������������