M/s. Opus Sofware Solution Pvt. Ltd., Pune V. ACIT, Cir-3, Pune

ITA 158/PUN/2009

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6824 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-04-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARESHWAR SHARMA
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Competent authority
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER I.T.A. NO. 158/PN/2009 :ASSTT. YEARS: 2005-06 M/S. OPUS SOFTWARE SOLUTIONS PVT.LTD., COMMERZONE BUILDING NO. 4 1 ST FLOOR, SAMRAT ASHOKA PATH, OPP. AIRPORT ROAD, YERAWADA PUNE 411 505 PAN AAACO 2203 N .. APPELLANT VS. ASSTT. CIT CIR. 3, PUNE .. RES PONDENT APPELLANT BY: SHRI SUNIL PATHAK RESPONDENT BY: SHRI HARESHWAR SHARMA ORDER PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-II PUNE DATED 21-10-2008 FOR A.Y. 2005-06. 2. THE SUBSTANTIVE GRIEVANCE OF THE ASSESSEE IN THI S APPEAL IS AGAINST THE DISALLOWANCE OF RS. 26,07,968/- MADE BY THE AUTHORITIES BELOW IN RESPECT OF DEDUCTION CLAIMED BY THE ASSESS EE U/S 10A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT FOR SHORT). 3 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS, INTER ALIA, ENGAGED IN THE BUSINESS OF MANUFACTURE OF COMPUTER SOFTWARE AND IS REGISTERED UNDER SOFTWARE TECHNOLOGY PARK OF INDIA AND HAD CLAIMED EXEMPTION U/S 10A OF THE ACT WITH RESPECT TO SUCH P ROFITS. THE EXEMPTION WAS CLAIMED AT RS. 3,82,53,465/- WHICH WA S SCALED DOWN TO RS. 3,56,45,497/- BY THE A.O ON THE GROUND THAT THE SALE PROCEEDS OF THE COMPUTER SOFTWARE EXPORTED OUT OF INDIA TO THE EXTENT OF ITA NO. 158/PN/2009 OPUS SOFTWARE SOLUTIONS PVT. LTD. A.Y. 2005- 06 2 RS. 1,11,03,982/- WERE NOT BROUGHT INTO INDIA BY TH E ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN THE PERIOD PRES CRIBED U/S 10A(3) OF THE ACT. THUS THE EXEMPTION WAS SCALED DOWN TO THE EXTENT OF RS. 26,07,968/-. THE CIT(A) HAS ALSO UPHELD THE ST AND OF THE A.O FOR THE REASON STATED IN HIS ORDER. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT SUBSEQUENT TO THE ORDER OF THE CIT(A), THE ASSESSEE MOVED AN APPLICATION U/S 154 READ WITH SECTION 155(11A) OF T HE ACT BEFORE THE A.O ON THE GROUND THAT THE WHOLE OF RS. 1,11,03,982 /- WAS INCLUDIBLE AS EXPORT TURNOVER BECAUSE THE SAME HAS BEEN RECEIV ED IN INDIA, A COPY OF THE SAID APPLICATION HAS BEEN PLACED ON REC ORD AND IT IS FURTHER CONTENDED THAT IT HAS YET NOT BEEN DISPOSED OFF BY THE A.O. IN ANY CASE, THE PLEA RAISED IS THAT IN TERMS OF SECTION 1 0A(3) OF THE ACT, THE ASSESSEE IS REQUIRED TO BRING INTO INDIA THE SALE P ROCEEDS IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FURTHER PER IOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. ON THIS ASPECT , IT HAS BEEN POINTED OUT THAT HAVING REGARD TO THE CIRCULAR OF THE RESER VE BANK OF INDIA, WHICH IS A COMPETENT AUTHORITY REFERRED TO IN SECTI ON 10A(3) OF THE ACT , THE ASSESSEE HAS RECEIVED THE REMITTANCES WITHIN TH E PERIOD PRESCRIBED AND THEREFORE, SUCH RECEIPTS ARE ELIGIBLE TO BE CON SIDERED FOR THE PURPOSE OF EXEMPTION U/S 10A(3) OF THE ACT. THE PL EA OF THE LEARNED COUNSEL WAS THAT THE MATTER BE REMITTED BACK TO THE FILE OF THE A.O FOR EXAMINATION ON MERITS. 5. ON THE OTHER HAND, THE LEARNED DR HAS OPPOSED TH E PRAYER OF THE ASSESSEE BY POINTING OUT THAT IT IS CLEAR THAT THE SALE PROCEEDS HAVE NOT BEEN BROUGHT INTO INDIA WITHIN A PERIOD OF SIX MONT HS FROM THE END OF ITA NO. 158/PN/2009 OPUS SOFTWARE SOLUTIONS PVT. LTD. A.Y. 2005- 06 3 THE PREVIOUS YEAR AND THEREFORE, THE ASSESSEE IS NO T ENTITLED FOR THE CLAIM OF EXEMPTION AND THE SAME HAS BEEN RIGHTLY DE NIED BY THE LOWER AUTHORITIES. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS THE SHORT POINT INVOLVED IN THIS APPEAL RELATES TO THE PROVIS IONS OF SECTION 10A(3) OF THE ACT WHICH PRESCRIBES THAT THE EXEMPTION U/S 10A IS AVAILABLE IN RELATION TO SALE PROCEEDS OF ARTICLES OR THINGS EXP ORTED OUT OF INDIA WHICH ARE RECEIVED OR BROUGHT INTO INDIA BY THE ASS ESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF PREVIOUS YEAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. IN THIS CASE, THE SALE P ROCEEDS TO THE EXTENT OF RS. 1,11,03,982/- HAVE NOT BEEN BROUGHT INTO IND IA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF PREVIOUS YEAR. ON THIS BASIS, THE LOWER AUT HORITIES HAVE DISALLOWED THE CLAIM OF EXEMPTION U/S 10A OF THE AC T WITH RESPECT TO SUCH SALE PROCEEDS. HOWEVER, THE CLAIM NOW MADE BE FORE US IS THAT THE ASSESSEE HAS BROUGHT THE RECEIPTS INTO INDIA UL TIMATELY WITHIN SUCH FURTHER PERIOD AS ALLOWED BY THE COMPETENT AUTHORIT Y WHICH IS RESERVE BANK OF INDIA IN THIS CASE. IN OUR CONSIDERED OPIN ION, THE PLEA OF THE ASSESSEE CANNOT BE SHUT DOWN WITHOUT EVALUATION ON MERITS, SINCE SECTION 10A(3) OF THE ACT ALLOWS THE ASSESSEE TO BR ING ANY SALE PROCEEDS INTO INDIA WITHIN SUCH FURTHER PERIOD AS R ESERVE BANK OF INDIA MAY ALLOW IN THIS BEHALF. THEREFORE, WE ARE INCLIN ED TO SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE PROVISIONS OF SECTION 10A(3) OF THE ACT AND THEREAF TER PASS AN ORDER AFRESH ON THIS ASPECT. NEEDLESS TO SAY, THE ASSESS ING OFFICER SHALL ITA NO. 158/PN/2009 OPUS SOFTWARE SOLUTIONS PVT. LTD. A.Y. 2005- 06 4 AFFORD ADEQUATE OPPORTUNITY OF HEARING TO THE ASSES SEE. THIS GROUND OF APPEAL IS THEREFORE, TREATED AS ALLOWED FOR STATIST ICAL PURPOSES. 7. THE NEXT GROUND OF APPEAL IN THIS APPEAL IS IN R ELATION TO THE DISALLOWANCE OF RS. 4,06,495/- IN RESPECT OF TRAVEL ADVANCES GIVEN TO EMPLOYEES, FOR WHICH NO ARGUMENTS HAVE BEEN ADVANCE D AND IS THEREFORE, DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF APRIL 2011. SD/- SD/- (SHAIALENDRA KUMAR YADAV) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 13 TH APRIL, 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A) II PUNE 4. THE CIT, - II PUNE 5. THE D.R, A BENCH, PUNE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE