Ita/403/2012 Of Commissioner Of Income Tax-Iii v. M/S. Wipro Limited

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9 DAY OF DECEMBER 27070PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD BETWEEN: ILT.A. NO.403 OF 2012 1.|COMMISSIONER OF INCOME TAX-III C.R. BUILDING, QUEENS ROAD BENGALURU. 2.|ADDITIONAL COMMISSIONER OF INCOME TAX RANGE-12, BENGALURU. .., APPELLANTS~ (BY SRI. E.I. SANMATHI, ADV.,)- AND* M/S. WIPRO LIMITED.DODDAKANNELLISARJAPUR ROADBENGALURU-5600725 (BY SRI. S. GANESH, SR. COUNSEL FOR| SRI. SANDEEP HUILGOL, ADV., FOR) SRI. R.B. KRISHNA, ADV.,) .., RESPONDENT THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT,|1961L ARISING OUT OF ORDER DATED 18.0/7.20L2 PASSED IN ITNO.1349/BANG/2010, FOR THE ASSESSMENT YEAR 2006-07,ANNEXURE-A,PRAYING|TO](1) DECIDE|THE|FOREGOINGQUESTION OF LAW STATED THERIEN. (II) SET ASIDE THEAPPELLATE ORDER DATED 18.07.2012 PASSED BY THE ITAT, B- BENCH,|BANGALORE.IN|APPEAL|PROCEEDINGS»TTA!NO.1349/BANG/2010 ANNEXURE-A IN THE INTEREST OF JUSTICEAND EQUITY. THIS ITA COMING ON FOR FINAL HEARING, THIS DAY,ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260A of the Income TaxAct, 1961 (nereinafter referred to as the Act for short)nas been preferred by the revenue. The subject matterof the appeal pertains to the Assessment year 2006-07..The appeal was admitted by a bench of this Court videorder dated 13.02.2013 on the following substantialquestions of law:| (1) WhetnerOf)thefactsandcircumstances of the case, the tribunal Is right in law in directing the assessing.authority to set off the loss of the units tnSTP from other taxable DUusiness [ncomeeven when the same is not permitted under|provisions of IT Act? (2) WhetherOf)thefactsandcircumstances of the case, the tribunal Is right in law in allowing the assessee's claim. of depreciation of Rs.19.46,23,236/- on|softwareimportedeVeClthough|theassessing authority had rightly disallowedthe expenditure under section 40(a)(i) of IT|Act as the assessee had failed to comply|with the provisions of section 195 whilemaking payments to the vendors? (3) WhetherOf)thefactsandcircumstances of the case, the tribunal Is right in law in setting aside the reallocationof expenditure done by assessing authority|relating to expenditure booked by WiproCorporate division to other divisions even|though|theSaidre-allocation|by theassessing authority was in accordance withlaw? (4) WhetherOf)thefactsandcircumstances of the case, the tribunal Is right in law in setting aside the exclusionsmade by assessing authority relating toInterestincome,foreignexchangefluctuations and income from sale of scrap|from the profits of 10A? (5) WhetherOf)thefactsandcircumstances of the case, the tribunal Is right in law in setting aside the re-allocationof Corporate Expenses even though theassessing authority was right in holdingthat in absence of such allocation ofexpenses, the profits of the units eligible fordeduction|In|chapter|VIAwouldbeartificially enhanced? (6) WhetherOf)thefactsandcircumstances of the case, the order of the|tribunal can be said as perverse in nature|as the tribunal has relied on Its earlierdecisions which have not reached finality|since appeals preferred by Revenue under|section 260A against those orders are|pending before this Hon'ble High Court tnITA No.363 of ZOOS and other connectedmatters and as such tribunal ought to haveawaited decision of this Hon'ble High Court? (7) WhetherOf)thefactsandcircumstances of the case, the tribunal Is right in law in setting aside the computationof deduction u/s.10A of IT Act whereby the assessing authority had rightly excluded aSUTYofRs.225/7,/0,94,710/-fromtheexport turnover by holding that the saidsum was incurred in providing technicalservices outside India? (6) WhetherOf)thefactsandcircumstances of the case, the order of the|tribunal can be said as perverse in nature|as the tribunal has relied on Its earlierdecisions which have not reached finality|since appeals preferred by Revenue under|section 260A against those orders are|pending before this Hon'ble High Court tnITA No.363 of ZOOS and other connectedmatters and as such tribunal ought to haveawaited decision of this Hon'ble High Court? (7) WhetherOf)thefactsandcircumstances of the case, the tribunal Is right in law in setting aside the computationof deduction u/s.10A of IT Act whereby the assessing authority had rightly excluded aSUTYofRs.225/7,/0,94,710/-fromtheexport turnover by holding that the saidsum was incurred in providing technicalservices outside India? (8) WhetherOf)thefactsandcircumstances of the case, the Tribunal Is right in law in setting aside deduction done.by the assessing authority under section10A of IT Act by excluding a sum ofRs.13,07,29,648/- received after 30-09-2006 from the export turnover even when|the assessing authority had right held thatthe said sum was not remitted to [Indiawithin 6 months from the end of theprevious years in terms of section 10-A(3)? (9) whetherOf)thefacts|andcircumstances of eh case, the tribunal Is right in law in setting aside the reallocationof corporate expenses to the extent of|Rs.1,15,45,780/- to unit in Pondecherry|eventhoughtheSaldre-allocation ofexpenses by the assessing authority was inaccordance with the provisions of law? (10)Whether on the facts and|circumstances of the case, the tribunal Is right in law in confirming the decision of theCommissioner of Income Tax (Appeals) indirecting the assessing authority to set offthe loss of the units [in STP from taxablebusiness income? (11).Whether on the facts and|circumstances of the case, the tribunal Is right in setting the order of the assessing|authority with regard to re-computation ofdeduction at Rs.850,46,91,962/- u/s.10-A/10-B, 10AA of the Income Tax Act)eventhough the same was in accordancewith aforesaid provisions of the IT Act? (12).Whether on the facts and|circumstances of the case, the tribunal Is right in setting aside the order of theassessingauthoritywith regard|To disallowance of the set off of loss of.Rs.24,62,222/- incurred in unit eligible for|aqeauction under section 80-IC against tnetaxable income from business by invoking| section 880-IC(7/7) read with section 8IA(s) of IT Act? (13).Whether, on the facts and.circumstances of the case, the tribunal Is right in setting aside the order of theassessingauthorityrelatingionthereallocation of corporate expenses to the|eCXTenyofRs.57,/6,956/-To WiproConsumer Care DIVvIsSion (14)Whether, on tne facts and.circumstances of the case, the tribunal Is right in law in setting aside the order of theassessment relating to issue of excludingthe profits from software development|centre outside India for the purpose ofdeduction under section 10-A of IT Act? (15).Whether, on tne facts and.circumstances of the case, the tribunal Is right in law in setting aside the order of theassessingauthorityrelatingionthereallocation of expenses in respect of 80-ICunit? (16).Whether on the facts and|circumstances of the case, the tribunal Is right in law tn setting aside the order of theassessment.relatingiontheISSUeofdeduction under section 10-A on enhancedprofit after disallowing compensation. ofRs.12.15 Crore, the tribunal erred in settingaside the same even though the same wasin accordance of provisions of IT Act? 2 |Learned counsel for the revenue submits that.all the remaining issues covered by decisions of this|court InM/S WIPRO LTD. VS. DCIT, 383 ITR 179(KAR) and|COMMISSIONER OF INCOME-TAX &ANOTHER VS. TATA ELXSI LTD." 382 ITR 654|(KAR)are pending adjudication at the instance of therevenue before the Supreme Court. In view of aforesaidsubmission needless to state that the Assessing OfficerShall decide the issues In accordance with the decision|which may be rendered by the Supreme Court. 2 |Learned counsel for the revenue submits that.all the remaining issues covered by decisions of this|court InM/S WIPRO LTD. VS. DCIT, 383 ITR 179(KAR) and|COMMISSIONER OF INCOME-TAX &ANOTHER VS. TATA ELXSI LTD." 382 ITR 654|(KAR)are pending adjudication at the instance of therevenue before the Supreme Court. In view of aforesaidsubmission needless to state that the Assessing OfficerShall decide the issues In accordance with the decision|which may be rendered by the Supreme Court. !��"����������������������������������������������������������������#���$��%&%'�()*+������������������������������������������������������������������������������������� ����������� ��� �����������