IN HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS 25TH DAY OF FEBRUARY 2020 PRESENT HON BLE MR. JUSTICE ALOK ARADHE AND HON BLE MR. JUSTICE RAVI V.HOSMANI I.T.A. NO.335 OF 2019 (T-IT) BETWEEN: 1. PRINCIPAL COMMISSIONER OF INCOME TAX-7 BMTC COMPLEX KORAMANGALA BENGALURU. 2. DY. COMMISSIONER OF INCOME TAX CIRCLE-7(1)(1), BMTC COMPLEX KORAMANGALA, BENGALURU. ... APPELLANTS (By Sri. SANMATHI E.I. ADV.) AND: M/S. TATA ELXSI LTD ITBP ROAD, HOODY WHITEFIELD BANGALORE-560048 PAN:AAACT7872Q. ... RESPONDENT --- THIS I.T.A. IS FILED UNDER SECTION 260-A OF INCOME TAX ACT, 1961, ARISING OUT OF ORDER DATED 2 5.12.2018 PASSED IN ITA NO.1222/BANG/2017 (ANNEXURE- A) FOR ASSESSMENT YEAR 2011-12, PARYING TO DECIDE FOREGOING QUESTION OF LAW AND/OR SUCH OTHER QUESTIONS OF LAW AS MAY BE FORMULATED BY HON BLE COURT AS DEEMED FIT AND ECT. THIS I.T.A. COMING ON FOR ADMISSION, THIS DAY, ALOK ARADHE J., DELIVERED FOLLOWING: JUDGMENT This appeal under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act , for short) filed by revenue against order dated 05.12.2018 passed by Income Tax Appellate Tribunal. 2. Facts leading to filing of this appeal briefly stated are that assessee is company incorporated under provisions of Companies Act, 1956 and is engaged in business of distribution of computer systems. assessee filed return of income for Assessment Year 2010-11 on 30.09.2010 declaring NIL income under normal provisions and book profits under Section 115JB of Act of Rs.7,77,33,533/-. Against said return, Assessing Officer passed order 3 under Section 143(3) of Act at total income of Rs.18,05,19,790/- Assessing Officer allowed exemption under Section 10A in respect of STPI, Bangalore Unit after set off loss of Rs.4,92,52,645/- in respect of 10A eligible unit of Bombay and other income in form of sales of scrap of Rs.62,65,142/- was excluded from business profits for purpose of computing exemption under Section 10A of Act. Assessing Officer also reduced sum of Rs.27,68,91,445/- from export turnover as same was realized within due date prescribed nor permission from RBI was furnished. Assessing Officer also excluded insurance and telecommunication expenditure of Rs.3,41,59,000/- on export turnover for purpose of computing benefit under Section 10A of Act. Assessing Officer made addition of Rs.18,65,13,852/- and brought to tax rental income under other sources . 3. Being aggrieved, appeal was preferred before Commissioner of Income Tax (Appeals) who 4 vide impugned order allowed claim of other income . appellate authority held other income of Rs.62,65,141/- is part of business profits eligible for exemption under Section 10A of Act. Commissioner of Income Tax (Appeals) held that amount of Rs.27,68,91,455/- was not realized within prescribed time and therefore, same should be considered as export turnover for current year. It was further held that insurance expenditure incurred in foreign currency should be reduced from export turnover as well as total turnover. It was also held that expenditure in foreign currency was not incurred for purpose of export of software and therefore, should not be reduced from export turnover. 4. Being aggrieved, assessee as well as revenue filed appeals before Income Tax Appellate Tribunal. appellate tribunal by order dated 05.12.2018 has dismissed appeal preferred by revenue for Assessment Years 2010-11 and 2011-12 5 and has allowed cross appeal preferred by assessee by setting aside disallowance of Rs.46,97,000/- and held that said amount has to be treated as part of export turnover by following decision of this court. Being aggrieved, revenue has filed this appeal. 5. We have heard learned counsel for revenue at length. From perusal of order passed by Tribunal, we find that Tribunal has followed decision of this court in case of CIT VS. M/S HEWLETT PACKARD GLOBAL SOFT LTD. (2018) 402 ITR 454 KAR. FB. Thus, order passed by Tribunal does not suffer from any infirmity. No substantial question of law arises for consideration in this appeal as order of Tribunal is based on decision rendered by this court. 6 In result, we do not find any merit in this appeal. same fails and is hereby dismissed. Sd/- JUDGE Sd/- JUDGE SS Principal Commissioner of Income-tax-7, Bengaluru / Dy. Commissioner of Income-tax, Circle-7(1)(1), Bengaluru v. Tata Elxsi Ltd