Communication charges should be excluded both from export turnover and total turnover for deduction u/s 10A

Last updated: 21 January 2021

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The Income Tax Appellate Tribunal (ITAT) has ruled that communication charges should be excluded from both export turnover and total turnover when calculating deductions under Section 10A. This decision applies to ABB Global Industries and Services Pvt. Ltd. for the assessment year 2010-11, affecting how their tax benefits are determined.

Court :
ITAT Bangalore

Brief :
ITA No.1448/Bang/2017 is an appeal by the assessee, while ITA No.1660/Bang/2017 is an appeal by the revenue. Both these appeals aredirected against the order dated 12.04.2017 of the CIT(Appeals)-I, Bengaluru, relating to assessment year 2010-11.

Citation :
ITA No.1488/Bang/2017

IN THE INCOME TAX APPELLATE TRIBUNAL
“B” BENCH : BANGALORE

BEFORE SHRI N V VASUDEVAN, VICE PRESIDENT
AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER

ITA No.1488/Bang/2017
Assessment year: 2010-11

ABB Global Industries and
Services Pvt. Ltd.
(formerly ABB Global Industries
and Services Ltd.),
21st Floor, WTC, Dr. Rajkumar
Road, Malleshwaram West,
Bangalore – 560 055.
PAN: AADCA 3217B
APPELLANT

Vs.

The Deputy Commissioner
of Income Tax,
Circle 11(1),
Bangalore.
RESPONDENT

ITA No.1660/Bang/2017
Assessment year: 2010-11

The Deputy Commissioner
of Income Tax,
Circle 11(1),
Bangalore.
PAN: AADCA 3217B
APPELLANT

Vs.

ABB Global Industries and
Services Pvt. Ltd.
(formerly ABB Global Industries
and Services Ltd.),
Bangalore – 560 055.
RESPONDENT

Appellant by : Shri T. Suryanarayana, Advocate
Respondent by : Shri Gopalan Guruswamy, CIT(DR)(ITAT), Bengaluru.

Date of hearing : 07.12.2020
Date of Pronouncement : 31.12.2020

O R D E R

Per N.V. Vasudevan, Vice President

ITA No.1448/Bang/2017 is an appeal by the assessee, while ITA No.1660/Bang/2017 is an appeal by the revenue. Both these appeals aredirected against the order dated 12.04.2017 of the CIT(Appeals)-I, Bengaluru, relating to assessment year 2010-11.

2. First we shall take up for consideration the assessee’s appeal which is ITA No.1488/Bang/2017. Ground No.1 was not pressed for adjudication and hence dismissed as not pressed. Ground No.2 raised by the assessee reads as follows:-

To know more in details find the attachment file

FAQ :

The ITAT has decided that communication charges should not be included when calculating export turnover and total turnover for the purpose of Section 10A deductions.

Section 10A of the Income Tax Act is relevant, which deals with deductions for undertakings in special economic zones.

The case involved ABB Global Industries and Services Pvt. Ltd. as the assessee and the Deputy Commissioner of Income Tax, Circle 11(1), Bangalore, as the respondent.

The ruling pertains to the assessment year 2010-11.

Excluding these charges means that the quantum of deduction available under Section 10A might be affected, potentially reducing the overall tax benefit.