The Commissioner Of Incometax-Ltu, Mumbai v. Tata Consultancy Services Ltd. …

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX Appeal NO. 269 OF 2015 The Commissioner of IncomeTax-LTU, Mumbai … Appellant vs. Tata Consultancy Services Ltd. … Respondent …....... Mr.A. R. Malhotra for the Appellant. Mr. Dinesh Vyas, Senior Counsel a/w. Mr. Mandar Vaidya & Mr. Srihari Iyer for the Respondent …....... CORAM : A.S. OKA & A.K. MENON, JJ.DATE : 5[th] DECEMBER, 2017 P. C. 1.Heard the learned Counsel appearing for the Appellant and the learnedCounsel appearing for the Revenue. The learned Counsel appearing for theAppellant has pressed into service the following substantial questions of law : “(A)Whether on the facts and in the circumstance of the case and in lawthe Tribunal was right in holding that on-sight consultancy servicesexpenses of Rs.5,32,25,662/-, Telecommunication expenses ofRs.2,37,31,480/-, travel expenses of Rs.1,38,70,716/-, expenses borne bythe customers of the Assessee Company on behalf of the Assessee Companyamounting to Rs.4,86,53,446/-, were to be reduced from Total Turnoverwhile computing exemption u/s 10A of the Income Tax Act? (B)Whether on the facts and in the circumstance of the case and in lawthe Tribunal was right in not allowing set off of the loss incurred by theAssessee Company from the Non-STPI Unit with the profit of the STPIUnit to arrive at the profits of the business eligible for exemption u/s 10Aof the Income-Tax Act?” 2.The present Appeal takes an exception to the judgment and order dated28[th] March, 2014 passed by the Income Tax Appellate Tribunal by which twoAppeals preferred by the Appellant-Revenue for the Assessment years 2003-04and 2004-05 were decided. The challenge in this Appeal is confined to theAppeal pertaining to the year 2004-05. The Appellate Tribunal whiledismissing the Appeal preferred by the Appellant-Revenue first relied upon adecision of this Court in Income Tax Appeal No. 3474 of 2010 in the case ofCIT vs Tata Infotech (amalgamated with Tata Consultancy Services Ltd.-present respondent). This Court while deciding the said case, relied upon adecision in the case of CIT vs. Gemplus Jewellery Ltd.[1] Based on the saiddecisions, the first question of law which is pressed into service has beendecided against the Appellant-Revenue. As far as the decision in the case ofCIT vs Tata Infotech is concerned, the learned Counsel appearing for theAppellant-Revenue stated that he could not get information whether the saiddecision was challenged by the Revenue. As regards the other decision of theCourt in the case of Gemplus Jewellery Ltd (supra), he pointed out that anAppeal has been preferred by the Appellant Revenue being Civil Appeal No.1[2010] 233 CTR 248 (Bom) 8492 of 2013 which is pending for final hearing before the Apex Court.However, there is no dispute that as of today, the decisions of this Court inboth the cases stand. 3.As regards the second question of law, the Appellate Tribunal hasfollowed the decision of Karnataka High Court dated 9[th] August, 2011 in thecase of CIT vs Yokogawa India Ltd. Similar view was taken by this Court inthe case of Hindustan Unilever Ltd vs. Deputy Commissioner of Income-tax1(1), Mumbai.[2] It was fairly pointed out that the decision of the KarnatakaHigh Court was carried to the Apex Court and that the Apex Court by itsjudgment in the case of Commissioner of Income-tax vs. Yokogawa IndiaLtd.[3] confirmed the view taken by the Karnataka High Court. 4. On the first question, the submission is that the Appeal requiresconsideration on the ground that an Appeal preferred by the AppellantRevenue against the decision of this Court in the case of Gemplus JewelleryLtd.(supra) is pending before the Apex Court. 4. On the first question, the submission is that the Appeal requiresconsideration on the ground that an Appeal preferred by the AppellantRevenue against the decision of this Court in the case of Gemplus JewelleryLtd.(supra) is pending before the Apex Court. 5.The law is very well settled. So long as the decision of the Co-ordinateBench of this Court is not set aside by the higher Court, all Co-ordinateBenches of this Court continue to be bound by the said decision. Even if ajudgment of the Co-ordinate bench is stayed by the higher Court, as far as this Court is concerned, it continues to be bound by the judgment. 2[2010] 325 ITR 102 (Bombay)3[2017] 77 taxmann.com 41 (SC)3[2017] 77 taxmann.com 41 (SC) 6.A Division Bench of this Court in the case of Commissioner of IncomeTax vs Desai Bros. Ltd.[4] has dealt with the issue of effect of the pending ofSpecial Leave Petition before the Apex Court in the context of entertaining anapplication under Section 256(2) of the Income Tax Act, 1961. It wasaccepted position before the Division Bench that the issue which was sought tobe raised by the application filed by the Revenue was already decided in thecase of CIT vs. Century Spg. & Mfg. Co. Ltd.[5] in favour of the assessee by theDivision Bench of this Court. It was urged by the revenue that a Special LeavePetition against the said decision of this Court was pending before the ApexCourt. This Court held that pendency of the Special Leave Petition or Appealbefore the Apex Court is of no consequence as this Court continues to bebound by its own decision until it is set aside. 7.Therefore, in our view, no substantial question of law arises as bothquestions pressed into service have been already answered against theAppellant. Accordingly, the Appeal is dismissed. No order as to costs. (A.K. MENON, J.) (A.S. OKA, J.) 4[1991] 189 ITR 88 (Bom) 5[1978] 111 ITR 6 (Bom)