DCIT, Hyderabad V. M/s Lanco Global Systems Limited, Hyderabad

ITA 1341/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9915 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 22-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMLAN TRIPATHI
• Assessee Lawyers: P MURALI MOHAN RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1341/HYD/10 : ASSTT . YEAR 2006-07 DY. COMMISSIONER OF INCOME- TAX, CIRCLE-16(1), HYDERABAD V/S. M/S. LANCO GLOBAL SYSTEMS LTD., HYDERABAD. ( PAN AAAC L 5827 B ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AMLAN TRIPATHI RESPONDENT BY : SHRI P.MURALI MOHAN RAO O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 200 6-07 IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME- TAX(APPEALS)-V, HYDERABAD DATED 13.8.2010. 2. GROUNDS OF APPEAL OF THE REVENUE ARE AS UNDER- '1. THE ORDER OF THE LEARNED CIT(A)'S ERRONEOUS ON FACTS AND IN LAW 2. THE LEARNED CIT(A) OUGHT TO HAVE EXCLUDED THE TELECOMMUNICATION CHARGES AND FOREIGN TRAVEL EXPENS ES FROM THE EXPORT TURNOVER WHILE CALCULATING DEDUCTIO N U/S. 10A. THE ACT HAS ALSO NOT DEFINED 'TOTAL TURNOVER' TO BE CONSIDERED FOR THE PURPOSE OF CALCULATING THE EXPOR T PROFIT U/S. 10A. 3. THE LEARNED CIT(A) OUGHT TO HAVE EXCLUDED FOREIGN REMITTANCES FROM THE EXPORT TURNOVER WHILE CALCULAT ING DEDUCTION U/S. 10A.' ITANO.1341/HYD/10 M/S. LANCO GLOBAL SYSTEMS LTD., HYD. 2 5. WE HAVE HEARD BOTH SIDES AND PERUSED THE IMPUGNED ORDERS OF THE LOWER AUTHORITIES. AS FOR THE ISSUE INVOLVED I N GROUND NO.2 WITH REGARD TO EXCLUSION OF TELECOMMUNICATION EXPENSES AND FO REIGN TRAVEL EXPENSES FROM THE EXPORT TURNOVER IS CONCERNED, THE LEA RNED COUNSEL FOR THE ASSESSEE SUBMITTED AT THE OUTSET, THAT THE SAME IS COVER ED BY THE DECISIONS OF THE COORDINATE BENCHES OF THE HYDERABAD TRIBU NAL IN THE CASE OF PRITHVI INFORMATION SOLUTIONS LTD., SECUNDERABAD ( 225/HYD/2005 FOR ASSESSMENT YEAR 2001-020 DATED 12.10.2007; AND IN THE CASE OF ITO V/S. D.E. BLOCK INDIA SOFTWARE (P)LTD. (ITA NO.S983 AN D 984/HYD/2006 FOR ASSESSMENT YEAR 2002-03 AN 2004-05), WHICH HAVE IN F ACT BEEN FOLLOWED BY THE CIT(A) IN THE IMPUGNED ORDER. IT IS ALSO SUBMITTED THAT THIS ISSUE IS ALSO COVERED BY THE DECISION OF THE SPECIAL B ENCH(CHENNAI) OF THE TRIBUNAL IN THE CASE OF ITO V/S. SAK SOFT LTD. (31 3 ITR (AT) 353). LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVE RT THESE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. IN TH IS VIEW OF THE MATTER AND IN THE ABSENCE OF ANY DECISION TO THE CONTRA RY BROUGHT TO OUR NOTICE BY THE LEARNED DEPARTMENTAL REPRESENTATIVE, W E FIND NO JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE CIT( A). WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) AND REJECT GROUND NO .2 OF THE REVENUE IN THIS APPEAL. 6. AS FAR AS THE ISSUE INVOLVED IN GROUND NO.3 IS CON CERNED, VIZ. EXCLUSION OF FOREIGN EXCHANGE REMITTANCES, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED AT THE OUTSET THAT THIS ISSUE IS ALSO COVERE D BY THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S. BHRIGUS SOFTWARE INDIA P. LTD. SECUNDERABAD(ITA NO.66 5HYD/07 FOR ASSESSMENT YEAR 2004-05) DATED 30TH OCTOBER, 2009, BESIDE S BY THE DELHI BENCH DECISION OF THE TRIBUNAL IN THE CASE OF IDEA L CARPETS LTD. V/S. ITANO.1341/HYD/10 M/S. LANCO GLOBAL SYSTEMS LTD., HYD. 3 ITO (2008)(10 DTR(DEL) (TRIB) 551), COPIES OF WHICH A RE FILED BEFORE US. LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVE RT THESE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. HOWEVE R, CONSIDERING THE RATIO OF THE ABOVE DECISIONS OF THE TRIB UNAL, WE ARE INCLINED TO DIRECT THE ASSESSING OFFICER TO ALLOW THE ASSESSEE 'S CLAIM, IF THE EXPORT PROCEEDS ARE RECEIVED BY THE ASSESSEE, EVEN IF BELA TEDLY, BUT WITHIN THE EXTENDED TIME ALLOWED BY THE RESERVE BANK OF INDIA. WE ACCORDINGLY SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISS UE, AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A D IRECTION TO ALLOW THE CLAIM OF THE ASSESSEE, AFTER DUE VERIFICATION, AS TO RECE IPT OF THE EXPORT PROCEEDS WITHIN THE TIME EXTENDED BY THE RESERVE BANK OF INDIA. HE SHALL ACCORDINGLY REDECIDE THIS ISSUE IN ACCORDANCE WITH LAW AND AFTER GIVING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE . 7. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 13.1.2011 SD/- SD/- (G.C.GUPTA) (CHANDRA POOJARI) VICE PRESIDENT ACCOUNTANT MEMBER DT/- 13TH JANUARY, 2011 COPY FORWARDED TO: 1. M/S. LANCO GLOBAL SYSTEMS LTD., 8-2-293/82/A/796/B, ROAD NO.36, JUBILEE HILLS HYDERABAD 500 033. 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-16(1), HYD ERABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-V HYDERABAD. 4. COMMISSIONER OF INCOME-TAX IV , HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S