Ita/248/2015 Of Commissioner Of Income Tax v. M/S. Safran Aerospace

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28 DAY OF SEPTEMBER, 2015. PRESENT THE HON'BLE MR. JUSTICE VINEET SARAN AND THE HON’BLE MR. JUSTICE B.MANOHAR.ITA NO.248/2015 BETWEEN 1.)COMMISSIONBR OF INCOME TAX|CHENTRAL REVENUE BUILDINGSCHENTRAL REVENUE BUILDINGS QUEENS ROAD, BANGALORE -560 O0O1 iaTHR DEPUTY COMMISSIONER OF.INCOME TAX, CIRCLE 12 (3)BANGALORE.INCOME TAX, CIRCLE 12 (3)BANGALORE. _. APPBELLANTS~ (By Sri. E.].SANMATHI, ADV., ) ANT M/S. SAFRAN AEROSPACEINDIA PVT. LTD.,|CSRIE, #32, GRAPE GARDEN,17 "H" MAIN ROAD,VI BLOCK, KORAMANGALA,BANGALORE.PAN: AARFCS 9003 —. RESPONDENT This [TA is filed under Sec.260-A ot Income Tax Act|1961, arising out of order dated:31/12/2014 passed in ITA)No.1261/Bang/2010, for the Assessment Year 2OOQ6-2007with a prayer to 1) Decide the foregoing question of law and/ or such other questions of law as may be tormulated by the.Hon'ble Court as deemed fit 2) Set aside the appellate order|dated: 31/12/2014 passed by the ITAT, ‘A’ Bench,|Bangalore,inappealproceedings1n ITA|NO.|1261/Bang/2010 for assessment year 2006-2007 as soughtfor in this appeal. THIS ITA COMING ON FOR ADMISSION THIS DAY, VINE ET SARAN JDELIVERED THER FOLLOWING: JUDGMENT Heard Sri E.I.Sanmathi, learned counsel for.the appellants and perused the record. 2 |In this appeal, the following questions of lawarise for consideration: ¢1.Whether on the facts and in thecircumstances of the case, the Tribunal is correctin law in directing the assessing officer tocompute deduction under Section 10A withoutsetting off of losses (depreciation / business) by placing reliance on the decision of Hon'ble High|Court of Karnataka in the case of M/s. YokogawaIndia Ltd., without appreciating the fact that|deduction under Section JOA has to be qllowedfrom the total income of the assessee and as per|section 2(45) of the Act, the total income shouldbe computed from various sources after set off oflosses from one source against income from other|sources under the same head of income in terms.of Section 7O(1)P Il.Whether on the facts and in thecircumstances of the case, the Tribunal is correctin law in directing the assessing officer to excludetelecommunication expenses, insurance chargesand other expenses incurred in foreign currency|both from the export turnover and total turnover|for the purpose of computation of deduction undersection 1OA of the Act without appreciating the|fact that the statute allows exclusion of suchexpenditure only from the ETO by way of specific.definition of export turnover defined in the Act|and there is no specific provision in Section 10A)warranting exclusion of the above expenses from|the total turnover?| 111.Whether on the facts and in thecircumstances of the case, the Tribunal is correctin law in directing the assessing officer toconsider such'income from computation ofdeduction under Section 10A without appreciatingthat income derived from interest on deposits toobtainbankguarantee,|reimbursement ofexpenses and recovery from employees has nocorrelationwiththe eligible profits of theundertaking for computation of deduction underSection JOA and also the same is not said to bederivedfromthe exportactivitiesofthe assesseer” 3.It is not disputed by the learned counsel forthe appellants that the first question raised in thisappeal is covered by the decision rendered by this Courtthe appellants that the first question raised in thisappeal is covered by the decision rendered by this Court in the case oftThe Commissioner of Income Tax -vs-| Yokogawa India Ltd., (341 ITR 385 (Kar)whereby the|question has been answered in favour of the assesseeand against the Revenue. The second question has been decided by theJudgment of this Court in the case of-Commisstoner of Income Tax -vs- Tata Elxsi Ltd. (2012) 349 ITR 98 (Kar)wherein also the question has been answered in|favour of the assessee and against the Revenue. 3.It is not disputed by the learned counsel forthe appellants that the first question raised in thisappeal is covered by the decision rendered by this Courtthe appellants that the first question raised in thisappeal is covered by the decision rendered by this Court in the case oftThe Commissioner of Income Tax -vs-| Yokogawa India Ltd., (341 ITR 385 (Kar)whereby the|question has been answered in favour of the assesseeand against the Revenue. The second question has been decided by theJudgment of this Court in the case of-Commisstoner of Income Tax -vs- Tata Elxsi Ltd. (2012) 349 ITR 98 (Kar)wherein also the question has been answered in|favour of the assessee and against the Revenue. The third question has been decided by theJudgment of this Court in the case of|Commiuisstoner o Income Tax -vs- Motorola India Electronics (P) Ltd., (2014) 265 CTR 0094 (Kar)wherein also the questionhas been answered in favour of the assessee andsagainst the Revenue. In such view of the matter, we are of the opinion|that.hhosubstantial|questionoT lawarisesfordetermination by this Court. 4sri E.I.Sanmathi, learned counsel for theappellants states that in the cases of- Yokogawaand Tata Elxsi Ltd. (supra),appeals have been filed beforethe Apex Court, which have been Admitted. In the caseOT Motorola (supra),learned counsel states that the Revenue is considering to file appeal against the saidjudgment. 5 |In such view of the matter, it is provided, in the event, the Revenue succeeds in the appeals beforethe Apex Court, then the Assessing Authority shall pass—consequential orders in terms of Section 260(IA) of theIncome Tax Act, 1961, and in accordance with law, soas to give elfect to the Judgment of the Apex Court. With the aforesaid observations, the appeal isdismissed. Sd/-.JUDGESd/-.JUDGE. TL