Brightcom Group Limited(Formerly Known as Ybrant Digital Limited), Hyderabad V. Dy. Commissioner of Income Tax , Circle-17(1), Hyderabad

ITA 1593/Hyd/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2934 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 06-09-2021
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S SRINIVAS
• Assessee Lawyers: P MURALI MOHANA RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD (THROUGH VIDEO CONFERENCE) BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER I.T.A. NO.1593/HYD/2019 ASSESSMENT YEAR: 2009-10 BRIGHTCOM GROUP LIMITED, (PREVIOUSLY KNOWN AS YBRANT DIGITAL LIMITED), HYDERABAD [PAN: AAACL5827B] VS DCIT, CIRCLE-17(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI P.MURALI MOHANA RAO, AR FOR REVENUE : SHRI S.SRINIVAS, CIT-DR DATE OF HEARING : 06-09-2021 DATE OF PRONOUNCEMENT : 25-10-2021 O R D E R PER S.S.GODARA, J.M. : THIS ASSESSEES APPEAL FOR AY.2009-10 ARISES FROM TH E CIT(A)-1, GUNTURS ORDER DATED 18-09-2019 PASSED IN CASE NO.0407 / 2014-15, INVOLVING PROCEEDINGS U/S. 143(3 ) OF THE INCOME TAX ACT, 1961 [IN SHORT, THE ACT]. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. THE ASSESSEE RAISES THE FOLLOWING SUBSTANTIVE GROU NDS IN THE INSTANT APPEAL: 1. THE ORDER OF LD.CIT(A) IS ERRONEOUS BOTH ON FAC TS AND IN LAW. ITA NO. 1593/HYD/2019 :- 2 -: 2. A. THE LD.CIT(A) ERRED IN ADOPTING ONLY RS.6,50, 60,398/- AS 'EXPORT TURNOVER' IN THE COMPUTATION OF DEDUCTION U/S 10A O F THE ACT. B. THE LD.CIT(A) ERRED IN REJECTING ADDITIONAL GROU ND NOS.11 & 12 TAKEN BEFORE HIM. C. THE LD. CIT(A) ERRED IN REDUCING FROM EXPORT TUR N OVER, ON SITE DEVELOPMENT PROCEEDS OF US BRANCH FOR RS.42,86,17,4 92/- IN HIS COMPUTATION OF DEDUCTION U/S.10A OF THE ACT. D. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT T HE 'ON SITE I DEVELOPMENT PROCEEDS OF US BRANCH' FOR RS.42,86,17, 492/- HAVE ALREADY BEEN CREDITED TO A SEPARATE BANK ACCOUNT MA INTAINED BY THE ASSESSEE OUTSIDE INDIA WITH THE APPROVAL OF RBI IN TUNE WITH EXPLANATION-2 UNDER SUB-SECTION (3) OF SECTION 10A OF THE ACT. E. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AS PER RBI CIRCULAR NO.33 DATED 28.02.2007 THE RBI HAS DELEGATED POWER OF APPROVAL TO ING VYSYA BANK WHICH IN TURN HAS APPROVED WE LLS FA RGO BANK IN WHICH THE AMOUNT OF RS.42,86,17,492/- HAS BEEN C REDITED. F. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT TH E HON'BLE DRP VIDE THEIR ORDER DATED 24.12.2014 IN THE ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2010-11 HAS DIRECTED THE ASSESSING OFFICER TO TREAT 'ON SITE DEVELOPMENT RECEIPTS' AS PART OF EXPORT TU RN OVER FOR THE PURPOSE OF DEDUCTION U/S 10A OF THE ACT. G. THE LD. CIT(A) GROSSLY ERRED IN OBSERVING THAT T HE APPELLANT HAD FAILED IN BRINGING ANY EVIDENCE REGARDING THE CONTR ACTS AND REPATRIATION OF AMOUNTS TO INDIA. H. THE LD. CIT(A) OUGHT TO HAVE APPRECIATED THAT AN Y DELAY IN ACTUAL REPATRIATION OF THE IMPUGNED SALE PROCEEDS TO INDIA IS IMMATERIAL WHEN ONCE THE IMPUGNED SALE PROCEEDS ARE CREDITED I N A SEPARATE BANK ACCOUNT AS PER THE REQUIREMENT OF EXPLANATION- 2 UNDER SECTION 10A(3) OF THE ACT. I. THE LD. CIT(A) GROSSLY ERRED IN HOLDING THAT IF THE ON SITE DEVELOPMENT PROCEEDS OF RS.42,86,17,492/- ARE REDUC ED FROM THE TOTAL TURNOVER ALSO, THERE WON'T BE ANY DISINCENTIV E, IN SPITE OF THE FACT THAT THE SAME AMOUNT HAS BEEN INCLUDED IN THE TOTAL TURNOVER OF RS.48,08,54,127/- AS ADOPTED BY HIM IN HIS COMPUTAT ION OF DEDUCTION U/S.10A OF THE ACT. J. WITHOUT PREJUDICE TO OTHER GROUNDS, THE LD. CIT( A) OUGHT TO HAVE REDUCED THE AMOUNT OF RS.42,86,17,492/- FROM THE TO TAL TURNOVER COMPUTED BY HIM OF RS.48,08,54,127/-. 3. THE APPELLANT MAY ADD OR ALTER OR AMEND OR MODIF Y OR SUBSTITUTE OR DELETE AND/OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL AT ANY TIME BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. ITA NO. 1593/HYD/2019 :- 3 -: 3. WE HAVE HEARD RIVAL SUBMISSIONS AGAINST AND IN SU PPORT OF THE IMPUGNED EXPORT TURNOVER DISALLOWANCE OF RS.42,86,17,492/-. WE FIND FORCE IN THE ASSESSEES GROUND NO.(I) TO BE SPECIFIC WHEREIN ITS CASE IS THAT WHATEVE R REVENUE ITEM IS EXCLUDED FROM EXPORT TURNOVER, THE VERY COURSE OF ACTION APPLIES TO THE TOTAL TURNOVER AS WELL. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUTE THAT NOT ONLY THE HONBLE APEX COURTS LANDMARK DECISION IN CIT VS. HCL TECHNOLOGIES LTD. (2018) [404 ITR 719] (SC) HAS SETTLED THE INSTANT ISSUE BUT ALSO THE CBDT HAS ISSUED ITS CIRCUL AR NO.4/2018, DT.14-08-2018 THAT SUCH AN ITEM; EXCLUDED FR OM THE EXPORT TURNOVER, IS NOT INCLUDED IN THE TOTAL TURNOVER AS WELL. WE THEREFORE PARTLY ACCEPT THE FOREGOING PLEADINGS FO R STATISTICAL PURPOSES AND DIRECT THE ASSESSING OFFICER TO FRAME CONSEQUENTIAL COMPUTATION AS PER LAW. NO OTHER GROUND HAS BEEN PRESSED BEFORE US. 4. THIS ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWE D FOR STATISTICAL PURPOSES IN ABOVE TERMS. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER, 2021 SD/- SD/- (LAXMI PRASAD SAHU) (S.S.G ODARA) ACCOUNTANT MEMBER JUDICIAL MEM BER HYDERABAD, DATED: 25-10-2021 TNMM ITA NO. 1593/HYD/2019 :- 4 -: COPY TO : 1.BRIGHTCOM GROUP LIMITED (PREVIOUSLY KNOWN AS YBRA NT DIGITAL LIMITED), C/O. P.MURALI & CO., CHARTERED ACCOUNTANTS, 6-3-655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD. 2.THE DCIT, CIRCLE-17(1), HYDERABAD. 3.CIT(APPEALS)-1, GUNTUR. 4.PR.CIT-IV, HYDERABAD. 5.D.R. ITAT, HYDERABAD. 6.GUARD FILE.