The Income-tax Officer, Ward-11(3), Hyderabad V. Sri. Murali Krishna Chada, Hyderabad

ITA 1679/HYD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2896 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 12-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LAXMAN RAO
• Assessee Lawyers: K SAI PRASAD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1679/HYD/2012 ASST. YEAR 2009-10 ITO, WARD-11(3), HYDERABAD. VS SRI MURALI KRISHNA CHADA, HYDERABAD. PAN: ABFPC 6402 L (APPELLANT) (RESPONDENT) APPELLANT BY : SRI LAXMAN RAO RESPONDENT BY : SRI K. SAI PRASAD DATE OF HEARING : 02-5-2013 DATE OF PRONOUNCEMENT : 22-5-2013. ORDER PER SAKTIJIT DEY,JUDICIAL MEMBER. THIS APPEAL PREFERRED BY THE DEPARTMENT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A)-VI, HYDERAB AD PASSED IN APPEAL NO.0588/2011-12/CIT (A) VI PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. THE DEPARTMENT HAS RAISED THE FOLLOWING EFFECT IVE GROUND:- THE LD CIT (A) HAD NOT PROVIDED AN OPPORTUNITY TO T HE ASSESSING OFFICER AS PROVIDED UNDER RULE 46A AND A ITA NO.1679 OF 2012 SRI MURALIKRISHNA CHADA, HYD.. ================== 2 RELIEF WAS GIVEN TO THE APPELLANT ON THE BASIS OF F RESH EVIDENCE FILED BY THE APPELLANT. 3. BRIEFLY THE FACTS ARE, THE ASSESSEE AN INDIVIDU AL IS CARRYING ON ITS ACTIVITY AS A SOFT WARE SERVICE PROVIDER. F OR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED I TS RETURN OF INCOME ON 24-9-2009 DECLARING A TOTAL INCOME OF RS. 2,76,430/- AFTER CLAIMING EXEMPTION U/S 10A OF THE ACT OF AN AMOUNT OF RS.61,89,355/-. DURING THE SCRUTINY ASSESSMENT PROC EEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD ENTERED INTO CONTRACT AGREEMENT WITH M/S. HILTON HOTEL, NEW YORK , USA VIDE AGREEMENT DATED 17-5-2006 AS PER WHICH THE ASSESSEE WAS REQUIRED TO PROVIDE SERVICES BEING PEOPLE SOFT APP LICATION DEVELOPMENT AND SUPPORT STATED AS ACTUALLY THE RE MOTE MAINTENANCE OF THE ACCOUNTING SOFTWARE USED BY THE HOTEL IN THE RUNNING OF THE BUSINESS AT USA. THE ASSESSEE S TATED BEFORE THE ASSESSING OFFICER THAT EARLIER, THE ASSESSEE W AS ACTUALLY BEEN PROVIDING SERVICES IN USA ITSELF. FOR PERSO NAL REASONS PRIOR TO THE PREVIOUS YEAR RELEVANT TO THE ASSESSME NT YEAR 2009- 10 CAME BACK TO INDIA AND RESUMED HIS BUSINESS CONN ECTION WITH USA CONTRACTOR FOR PROVIDING SERVICES AS SOFT WARE EXPORT. IN THIS CONNECTION, THE ASSESSEE GOT ITSELF REGISTE RED WITH THE SOFTWARE TECHNOLOGY PARKS OF INDIA, HYDERABAD. THE ASSESSEE ALSO PRODUCED COPY OF THE SOFTEX FORMS CLEARED BY T HE STPI INVOICE WISE WHICH WAS SHOWN AS MARKED FOR THE REAL ISATION OF THE RESPECTIVE BANKER SO THAT THE CORRESPONDING FOR EIGN EXCHANGE REMITTANCE IS TO BE RECEIVED AND REPATRIAT ED INTO INDIA THROUGH THE BANKER. THE ASSESSING OFFICER FURTHER N OTICED THAT THE BANK ACCOUNT OF THE ASSESSEE REFLECT THE DEPOSI T OF FOREIGN EXCHANGE IN USA ACCOUNT AND ITS TRANSMISSION TO THE BANK ACCOUNT IN INDIA BY JUNE, 2009. THE ASSESSING OFFI CER FURTHER ITA NO.1679 OF 2012 SRI MURALIKRISHNA CHADA, HYD.. ================== 3 NOTED THE FACT THAT THE BANK ACCOUNT EXTRACTS INDIC ATED THE RECEIPT OF FOREIGN EXCHANGE BY THE BANKER THROUGH THE ASSESSEES ACCOUNT VIZ., CITI BANK IN USA TO THE CI TI BANK IN INDIA BOTH SHOWING THE NAMES OF THE ASSESSEE. THE ASSESSING OFFICER, HOWEVER DISALLOWED THE CLAIM OF EXEMPTION U/S 10A OF THE ACT BY OBSERVING THAT THE ASSESSEE FAILED TO FI LE THE CORRESPONDING FOREIGN EXCHANGE INWARD REMITTANCE CE RTIFICATE (FIRC) AND THE INVOICE WISE PAYMENTS AS PER THE SOF TEX FORMS ARE NOT REFLECTED IN THE BANK ACCOUNT CORRESPONDING TO THE CONTRACT AMOUNT CLAIMED AS RECEIVED FROM THE CONTRA CT AGAINST THE SAID INVOICES, TOTALLING TO US $1,29,000/- ON W HICH BASIS THE CLAIM OF 10A EXEMPTION IS BASED. THE ASSESSEE BEI NG AGGRIEVED OF THE DISALLOWANCE OF EXEMPTION U/S 10A OF THE ACT PREFERRED AN APPEAL BEFORE THE CIT (A). 4. THE CIT (A) ON EXAMINING THE MATERIALS ON RECORD FOUND THAT THE ASSESSEE HAD RAISED 9 INVOICES ON HILTON HOTELS AGGREGATING TO A SUM OF US $1,29,000 IT WAS FURTH ER FOUND THAT THE COPIES OF THE INVOICES AND THE BANK ACCOUN T COPY OF CITI BANK, HYDERABAD INDICATED THE REMITTANCE OF USD 16 800 ON 17- 6-2008 AND OF USD 1,12,000 ON 13-6-2009. THE TWO FIRCS SHOWING THESE TWO REMITTANCES AND THE BANK ACCOUNT COPY OF THE ASSESSEE IN BANK OF AMERICA, USA SHOWED DEPOSIT S OF USD 51,000, USD 28,100 AND USD 49,900 AGGREGATING TO US D 1,12,000 WHICH WAS EVENTUALLY REMITTED INTO HIS ACC OUNT OF CITI BANK HYDERABAD WERE ALSO SUBMITTED. ONLY BECAUSE IN THE FIRCS THE ASSESSEE WAS SHOWN AS THE REMITTER OF FOR EIGN EXCHANGE OF USD 1,12,000, THE ASSESSING OFFICER DIS ALLOWED THE EXEMPTION U/S 10A OF THE ACT. THE CIT (A) FURTHER NOTED THAT THE ASSESSEE HAD DEPOSITED A SUM OF USD 1,10,000 RE CEIVED FROM HILTON HOTELS, USA IN THREE INSTALMENTS IN HIS BANK ACCOUNT ITA NO.1679 OF 2012 SRI MURALIKRISHNA CHADA, HYD.. ================== 4 IN BANK OF AMERICA, USA WHICH EXACTLY TALLY WITH TH E AMOUNTS IN THE INVOICES. THE DEPOSITS IN BANK OF AMERICA AND SUBSEQUENT REMITTANCE IN HIS ACCOUNTS IN CITI BANK IN INDIA AR E ALSO EVIDENCED BY THE COPIES OF BANK ACCOUNTS. IT WAS FURTHER NOTED BY THE CIT (A) THAT THE AMOUNTS HAVE BEEN BROUGHT I NTO INDIA WITHIN THE SPECIFIED PERIOD. THE CIT (A) HELD THAT ONLY BECAUSE THE ASSESSEE HIMSELF WAS SHOWN AS REMITTER IN FIRC FOR A SUM OF USD 1,12,000, THE ASSESSING OFFICER HAS DISALLOWED THE SAME. THE CIT (A) WAS OF THE VIEW THAT SINCE THE ASSESSEE HAD FIRST DEPOSITED THE RECEIPTS FROM HILTON HOTELS IN HIS AC COUNTS AND SINCE HIS REMITTANCE IN HIS BANK ACCOUNT IN INDIA H AS BEEN MADE FROM HIS OWN BANK ACCOUNT IN USA. IT WAS LOGICAL TH AT THE ASSESSEES NAME SHOULD BE REFLECTED AS REMITTER IN FIRC. THE CIT (A) FURTHER OBSERVED THAT EVEN THOUGH THE FIRC FOR A SUM OF USD 16800 SHOWN HILTON HOTELS AS REMITTER, THE ASSESSING OFFICER HAS DISALLOWED THE ENTIRE CLAIM OF EXEMPT ION U/S 10A AMOUNTING TO RS.61,89,355/- 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS OF THE PART IES AND PERUSED THE MATERIAL ON RECORD. FROM THE ASSESSMENT ORDER, IT IS VERY MUCH EVIDENT THAT THE ASSESSING OFFICER ADMITS THE FACT THAT THE ASSESSEES BANK I.E., CITI BANK, HYDERABA D REFLECTS THE DEPOSIT OF FOREIGN EXCHANGE IN USA ACCOUNT AND ITS TRANSMISSION TO THE BANK ACCOUNT IN INDIA BY JUNE, 2009. THE ON LY REASON FOR WHICH THE ASSESSING OFFICER HAS DISALLOWED THE EXEM PTION IS DUE TO THE FACT THAT THE FIRCS MENTIONED THE ASSESSEE A S REMITTER OF THE FOREIGN EXCHANGE. THIS, IN OUR VIEW, CANNOT BE A VALID REASON FOR REJECTING THE ASSESSEES CLAIM OF EXEMPT ION U/S 10A OF THE ACT. WHEN ALL DOCUMENTS LIKE BANK ACCOUNT COPIES, INVOICES AND THE FIRCS ESTABLISHES THE FACT THAT TH E AMOUNT RECEIVED FROM HILTON HOTELS TOWARDS SERVICES PROVID ED BY THE ITA NO.1679 OF 2012 SRI MURALIKRISHNA CHADA, HYD.. ================== 5 ASSESSEE AND WHICH WAS DEPOSITED INTO THE ASSESSEE S BANK ACCOUNT IN USA HAS IN FACT BEEN REMITTED TO THE AS SESSEES BANK ACCOUNT IN INDIA, THEN THE ASSESSEES CLAIM FOR EXE MPTION SHOULD NOT HAVE BEEN DISALLOWED BY RAISING PURELY TECHNIC AL AND IRRELEVANT ISSUE. APART FROM RAISING THE TECHNICAL DEFECTS IF AT ALL IT CAN BE CALLED A DEFECT, THE ASSESSING OFFICER HA S SHOWN NO OTHER VALID REASON FOR DISALLOWING THE ASSESSEES C LAIM OF EXEMPTION. WHEN THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS FOR CLAIMING EXEMPTION U/S 10A OF THE ACT, THE SAME SHO ULD BE ALLOWED TO THE ASSESSEE. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NO T SPECIFICALLY POINT OUT WHAT ARE THE ADDITIONAL EVID ENCES PRODUCED BY THE CIT (A) AND WHICH WERE CONSIDERED BY HER IN VIOLATION OF RULE 46A OF IT RULES. THEREFORE, CONSIDERING THE T OTALITY OF FACTS AND THE CIRCUMSTANCES OF THE CASE, WE DO NOT FIND A NY INFIRMITY IN THE ORDER PASSED BY THE CIT (A) WHICH IS ACCORDI NGLY SUSTAINED. THEREFORE, THE GROUND RAISED BY THE DE PARTMENT IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T STANDS DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22-05-201 3. SD/- (CHANDRA POOJARI) SD/- (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 22 ND MAY, 2013. JMR* ITA NO.1679 OF 2012 SRI MURALIKRISHNA CHADA, HYD.. ================== 6 COPY FORWARDED TO: 1. ITO WARD-11(3), D- BLOCK, 5 TH FLOOR, IT TOWERS, AC GUARDS, HYDERABAD. 2. SRI MURALI KRISHNA CHADA, 106, JAI VAYU VIHAR, KUKA TPALLY, HYDERABAD. 3. CIT (A)-VI, HYDERABAD. 4. CIT CONCERNED, HYDERABAD. 5. THE DR, ITAT, HYDERABAD ITA NO.1679 OF 2012 SRI MURALIKRISHNA CHADA, HYD.. ================== 7