Commissioner of Income Tax and Others vs Safran Aerospace India Pvt. Ltd.

Vineet Saran, J—Heard Sri E.I. Sanmathi, learned counsel for the appellants and perused the record.

In this appeal, the following questions of law arise for consideration:

"i. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in directing the assessing officer to compute deduction under Section 10A without setting off of losses (depreciation/business) by placing reliance on the decision of Hon''ble High Court of Karnataka in the case of M/s. Yokogawa India Ltd., without appreciating the fact that deduction under Section 10A has to be allowed from the total income of the assessee and as per Section 2(45) of the Act, the total income should be computed from various sources after set off of losses from one source against income from other sources under the same head of income in terms of Section 70(1)?

ii. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in directing the assessing officer to exclude telecommunication expenses, insurance charges and other expenses incurred in foreign currency both from the export turnover and total turnover for the purpose of computation of deduction under Section 10A of the Act without appreciating the fact that the statute allows exclusion of such expenditure 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?

iii. Whether on the facts and in the circumstances of the case, the Tribunal is correct in law in directing the assessing officer to consider such income from computation of deduction under Section 10A without appreciating that income derived from interest on deposits to obtain bank guarantee, reimbursement of expenses and recovery from employees has no correlation with the eligible profits of the undertaking for computation of deduction under Section 10A and also the same is not said to be derived from the export activities of the assessee?"

It is not disputed by the learned counsel for the appellants that the first question raised in this appeal is covered by the decision rendered by this Court in the case of The Commissioner of Income Tax Ltu. Jss Towers. BSK III Stage Bangalore and The Asst.Commissioner of Income Tax Circle-12(5), C.R. Building, Queens Road, Bangalore and Others Vs. M/s. Yokogawa India Ltd., Plot No. 96, 3rd Cross Electronics City Complex, Hosur Road, Bangalore - 560 100 and Others etc. etc. whereby the question has been answered in favour of the assessee and against the Revenue.

The second question has been decided by the Judgment of this Court in the case of Commissioner of Income Tax Vs. Tata Elxsi Ltd., (2012) 204 TAXMAN 321 wherein also the question has been answered in favour of the assessee and against the Revenue.

The third question has been decided by the Judgment of this Court in the case of Commissioner of Income Tax and Another Vs. Motorola India Electronics (P) Ltd., (2014) 265 CTR 94 wherein also the question has been answered in favour of the assessee and against the Revenue.

In such view of the matter, we are of the opinion that no substantial question of law arises for determination by this Court.

Sri E.I. Sanmathi, learned counsel for the appellants states that in the cases of Yokogawa and Tata Elxsi Ltd. (supra), appeals have been filed before the Apex Court, which have been Admitted. In the case of Motorola (supra), learned counsel states that the Revenue is considering to file appeal against the said judgment.

In such view of the matter, it is provided, in the event, the Revenue succeeds in the appeals before the Apex Court, then the Assessing Authority shall pass consequential orders in terms of Section 260(IA) of the Income Tax Act, 1961, and in accordance with law, so as to give effect to the Judgment of the Apex Court.

With the aforesaid observations, the appeal is dismissed.