Convergys India Services Pvt. Ltd. v. Commissioner of Income-tax
[Citation -2013-LL-1213-195]

Citation 2013-LL-1213-195
Appellant Name Convergys India Services Pvt. Ltd.
Respondent Name Commissioner of Income-tax
Court SUPREME COURT
Relevant Act Income-tax
Date of Order 13/12/2013
Judgment View Judgment
Keyword Tags exchange fluctuation • income from business • foreign exchange • working capital • memo of appeal • other source
Bot Summary: UPON hearing counsel the Court made the following ORDER In C.I.T.-II, Ahmedabad, Gujarat vs. M/s. Mastek Ltd., a three-Judge Bench of this Court in the order dated 4.3.2013 observed as follows: We find that appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 has been admitted by the High Court and two substantial questions of law have been framed for consideration of the appeal. The grievance of the Revenue is that by necessary implication, the other questions raised in the memo of appeal before the High Court have been rejected. The proviso following the main provision of Section 260A(4) of the Act states that nothing stated in sub-section, i.e., 'The appeal shall be heard only on the question so formulated' shall be deemed to take away or abridge the power of the Court to hear, for reasons to be recorded, the appeal on any other substantial question of law not formulated by it, if it is satisfied that the case involves such question. The High Court's power to frame substantial question(s) of law at the time of hearing of the appeal other than the questions on which appeal has been admitted remains under Section 260A(4). Mr. C.S. Agarwal, learned senior counsel of the petitioner submits that appeal being I.T.A. No. 1056 of 2011 is pending before the High Court on one substantial question of law. Mr. Gourab Banerji, learned Additional Solicitor General for the Revenue has no objection if the grievance of the petitioner is considered by the High Court in light of the observations made by this Court in the order dated 4.3.2013 in Mastek Ltd. 5. Having considered the above submissions, we observed that the High Court shall keep in view the order dated 4.3.2013 passed by this Court in Mastek Ltd. which has been quoted above while considering whether or not the above two questions of law which the petitioner intends to press for consideration by the High Court need to be framed at the time of hearing of the appeal.


ITEM NO.44 COURT NO.2 SECTION IIIA UPREME COURT OF INDIA RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (Civil) No(s).9839/2012 (From judgement and order dated 25/11/2011 in ITA No.1056/2011 of HIGH COURT OF DELHI AT N. DELHI) CONVERGYS INDIA SERVICES PVT.LTD. Petitioner(s) VERSUS COMMISSIONER OF INCOME TAX Respondent(s) Date: 13/12/2013 This Petition was called on for hearing today. CORAM : HON'BLE MR. JUSTICE R.M. LODHA HON'BLE MR. JUSTICE SHIVA KIRTI SINGH For Petitioner(s) Mr. C.S. Agarwal, Sr. Adv. Mr. Bhargava V. Desai,Adv. Mr. Shreyas Mehrotra, Adv. For Respondent(s) Mr. Gourab Banerji, ASG Mr. Arijit Prasad, Adv. Ms. Tanushree Sinha, Adv. for Mrs Anil Katiyar,Adv. UPON hearing counsel Court made following ORDER In C.I.T.-II, Ahmedabad, Gujarat vs. M/s. Mastek Ltd., three-Judge Bench of this Court in order dated 4.3.2013 observed as follows: "We find that appeal filed by Revenue under Section 260A of Income Tax Act, 1961 (for short, 'Act') has been admitted by High Court and two substantial questions of law have been framed for consideration of appeal. grievance of Revenue is that by necessary implication, other questions raised in memo of appeal before High Court have been rejected. We are afraid that Revenue is under some mis-conception. proviso following main provision of Section 260A(4) of Act states that nothing stated in sub-section (4), i.e., 'The appeal shall be heard only on question so formulated' shall be deemed to take away or abridge power of Court to hear, for reasons to be recorded, appeal on any other substantial question of law not formulated by it, if it is satisfied that case involves such question. High Court's power to frame substantial question(s) of law at time of hearing of appeal other than questions on which appeal has been admitted remains under Section 260A(4). This power is subject, however, to two conditions, (one) Court must be satisfied that appeal involves such questions, and (two) Court has to record reasons therefor." 2. Mr. C.S. Agarwal, learned senior counsel of petitioner submits that appeal being I.T.A. No. 1056 of 2011 is pending before High Court on one substantial question of law. He submits that present special leave petition has been filed as two questions of law that arise from order of Income Tax Appellate Tribunal, have not been framed by High Court. He submits that if those two questions of law, in light of order dated 4.3.2013 of this Court in Mastek Ltd. (supra), are considered by High court at time of hearing of income tax appeal, he does not have much to say. 3. two questions, which are being pressed by petitioner for consideration by High Court in ITA No. 1056 of 2011, are as follows: A. Whether Income Tax Appellate Tribunal was justified in law, on facts and in circumstances of case and on true and correct interpretation of Section 10A(1) read with section 10A(4) of Act, in holding that petitioner is not entitled to deduction under Section 10A of Income Tax Act, 1961 in respect of foreign exchange fluctuation gain amounting to Rs. 3,52,90,374/- arising on external commercial borrowings for meeting working capital requirements? B. Whether Income Tax Tribunal was justified in law, in not allowing deduction under Section 10A of Income Tax Act, 1961, despite fact that petitioner did not have other source of earning income except from export activity which was covered under 10A of Income Tax Act, 1961 and for which entire income including foreign exchange fluctuation gain had been derived and consequently foreign exchange fluctuation gain arising on external commercial borrowings for meeting working capital requirements is income from business and eligible for relief under Section 10A of Act? 4. Mr. Gourab Banerji, learned Additional Solicitor General for Revenue has no objection if grievance of petitioner is considered by High Court in light of observations made by this Court in order dated 4.3.2013 in Mastek Ltd. (supra). 5. Having considered above submissions, we observed that High Court shall keep in view order dated 4.3.2013 passed by this Court in Mastek Ltd. (supra) which has been quoted above while considering whether or not above two questions of law which petitioner intends to press for consideration by High Court need to be framed at time of hearing of appeal. 6. In light of above, obviously observations made by High Court in impugned order do not survive. 7. Special leave petition is disposed of accordingly. |(Pardeep Kumar) | |(Sneh Lata Sharma) | |AR-cum-PS | |Court Master | Convergys India Services Pvt. Ltd. v. Commissioner of Income-tax
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