2021 (10) TMI 1467 - HC - Income Tax

Deduction u/s 10B - foreign currency expenditure and Expenditure incurred on telecommunication charges relatable to delivery of software outside India has to be excluded from both export turnover and total turnover or not? - HELD THAT - The substantial questions of law Nos.1 and 2) referred above are substantial questions of law Nos.1 and 2) respectively in all these appeals in respect of which already the Honourable Supreme Court in the case of Commissioner of Income Tax Central III Vs. HCL Technologies Ltd. 2018 (5) TMI 357 - SUPREME COURT decided the issue in favour of the assessee. Interest u/s 234D - leviable from assessment year 2004-2005 onwards when the assessee s regular assessment was completed only on 17.03.2005 - HELD THAT - The substantial question of law already been decided by this Court in favour of the assessee in re M/s. United India Insurance Co. Ltd 2021 (9) TMI 556 - MADRAS HIGH COURT Disallowance u/s 14A of exempt income @ 2% - HELD THAT - Substantial question of law is decided in favour of the assessee by this Court in TAC Investments Finance (Madras) Ltd. 2016 (9) TMI 1685 - MADRAS HIGH COURT Current losses of the eligible unit must be set off against profits of the other eligible units before allowing the deduction u/s 10A/10B or not? - HELD THAT - Substantial question of law decided in favour of the assessee by the decision of this Court in the case of M/s. Yokogowa 2016 (12) TMI 881 - SUPREME COURT

Summary

The Madras High Court, in appeals under Section 260A of the Income Tax Act, 1961 filed by the Revenue, addressed five substantial questions of law concerning the exclusion of foreign currency expenditure and telecommunication charges from turnover under Section 10B, levy of interest under Section 234D, disallowance under Section 14A, and set-off of current losses among eligible units.The Court noted that these issues have been conclusively decided in favor of the assessee by the Supreme Court and this Court in prior rulings, including:- Commissioner of Income Tax, Central III v. HCL Technologies Ltd., (2018) 404 ITR 719 (SC) on foreign currency expenditure and telecommunication charges,- The Commissioner of Income Tax v. United India Insurance Co. Ltd., T.C.A.No.733/2013 (Madras HC, 2021) on interest under Section 234D,- CIT v. TAC Investments Finance (Madras) Ltd., (2016) 74 Taxmann.Com 38 (Madras HC) on disallowance under Section 14A,- Commissioner of Income Tax v. M/s. Yokogowa, (2017) 77 Taxmann.Com 41 (SC) on set-off of losses among eligible units.Since the substantial questions of law are no longer res integra and have been adjudicated in favor of the assessee, the appeals were dismissed without costs.