Appeal Details
Counselvise Citation
[2016] 133 COUNSELVISE.COM (IT) 7986 (ITAT-CHENNAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 13 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
17-02-2016
Appeal Filed By
Department
Bench Allotted
D
Next Hearing Date
10-02-2016
Assessment Year
2008-2009
Appeal Filed On
03-08-2015
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1780 /MDS./2015 ( / ASSESSMENT YEAR :2008-09) DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE-1(1), CHENNAI 600 034. VS. M/S.ANJANA SOFTWARE SOLUTIONS P LTD, UNIT 306, NSIC-SIP, B-24, GUINDY, INDUSTRIAL ESTATE, EKKATTUTHANGAL, CHENNAI 600 032. PAN AADCA1090 N ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.SUNGV SRINIVAS,JCIT, D.R / RESPONDENT BY : NONE / DATE OF HEARING : 10.02.2016 ! /DATE OF PRONOUNCEMENT : 17.02.2016 . / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE REVENUE IS DIRECTED A GAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-I, CHE NNAI DATED 25.05.2015 PERTAINING TO THE ASSESSMENT YEAR 2008-0 9. ITA NO.1780/MDS/2015 2 2. THE ONLY GROUND RAISED BY THE REVENUE IN ITS AP PEAL IS WITH REGARD TO REDUCE THE COMMUNICATION CHARGES AND FORE IGN TRAVEL EXPENDITURE WHICH HAVE BEEN EXCLUDED FROM EXPORT TU RNOVER TO BE EXCLUDED FROM THE TOTAL TURNOVER ALSO FOR THE PURPO SE OF RECOMPUTING DEDUCTION U/S.10B OF THE ACT. 3. ON THE DATE OF HEARING, NEITHER THE REPRESENTAT IVE OF THE ASSESSEE APPEARED NOR ANY APPLICATION FOR ADJOURNME NT WAS FILED IN ORDER TO PURSUE THE APPEALS. THEREFORE, WE PROCEED TO DECIDE THE APPEAL AFTER HEARING THE LD.D.R. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS A 100 PERCENT EXPORT ORIENTED UNIT REGISTERED WITH ST PI CHENNAI, FILED ITS RETURN OF INCOME ON 30.09.2008. SUBSEQUENTLY, THE CASE WAS TAKEN UP FOR SCRUTINY. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE LD. ASSESSING OFFICER REFERRED THE CASE TO TRAN SFER PRICING OFFICER (TPO) AND THE LD. TPO VIDE ORDER DATED 30.09.2011 F OUND THAT NO ADJUSTMENT WAS REQUIRED TO ARRIVE ARMS LENGTH PRICE . THEREAFTER, THE ITA NO.1780/MDS/2015 3 AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 22.11.2011 WHEREIN HE DISALLOWED FOLLOWING EXPENSES:- COMMUNICATION EXPENSES 7,34,034 TRAVELLING-FOREIGN 8,94,297 DIRECTORS TRAVELING-FOREIGN 76,407. 5. THE ASSESSEE RAISED AN ADDITIONAL GROUND WITH R EGARD TO SEEKING MAINTENANCE OF PARITY I.E. WHEN THE COMMUNI CATION CHARGES AND FOREIGN TRAVEL EXPENDITURE WERE REDUCED FROM EX PORT TURNOVER, THE SAME NEEDS TO BE REDUCED FROM TOTAL TURNOVER BEFORE THE CIT(A). THE CIT(A), FOLLOWING THE DECISION OF THE CHENNAI SPECI AL BENCH IN THE CASE OF SAK SOFT LTD., 121 TTJ 865, RELYING UPON TH IS CASE BY ASSESSEE ALSO, WHEREIN HELD THAT PARITY NEEDS TO BE MAINTAINED BETWEEN EXPORT TURNOVER AND TOTAL TURNOVER, DIREC TED THE AO TO REDUCE THE EXPENSES WHICH HAVE BEEN EXCLUDED FROM E XPORT TURNOVER FROM THE TOTAL TURNOVER ALSO FOR PURPOSE OF RE-COMPUTING DEDUCTION U/S.10B OF THE ACT. AGAINST THIS, THE REVENUE IS IN APPEAL BEFORE US. ITA NO.1780/MDS/2015 4 6. BEFORE US, THE LD. D.R ARGUED IN SUPPORT OF THE ORDER OF THE LD. ASSESSING OFFICER. THE LD. D.R FURTHER SUBMITTED TH AT THE LD. ASSESSING OFFICER HAD ARRIVED AT THIS DECISION OUT OF ABUNDANT CAUTION, BECAUSE THE REVENUE HAS CARRIED THE MATTER BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THE MATTER WA S PENDING. THE LD.D.R PRAYED THAT THE ORDER OF LD. ASSESSING OFFIC ER MAY BE UPHELD. 7. AFTER HEARING THE LD.D.R AND PERUSING THE MATER IALS ON RECORD, IT APPEARS THAT THE LD. ASSESSING OFFICER WAS OF THE V IEW THAT SINCE THE REVENUE WAS ON APPEAL AGAINST THE DECISION OF THE C HENNAI SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., (SUPRA) BEFORE THE HONBLE MADRAS HIGH COURT, HE NEED NOT FOLLOW THAT DECISION. FUR THER, IT IS NOT THE CASE OF THE REVENUE THAT THE JUDGMENT OF THE CHENNA I SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., (SURPA) IS STAYED BY THE MADRAS HIGH COURT. IT IS PERTINENT TO MENTION THAT IN THE ABSEN CE OF ANY STAY GRANTED BY THE BY THE HONBLE MADRAS HIGH COURT AGA INST THE OPERATION OF THE JUDGMENT OF THE CHENNAI SPECIAL BE NCH IN THE CASE OF SAK SOFT LTD., (SURPA), ALL THE LOWER JUDICIARIE S AS WELL AS QUASI JUDICIAL AUTHORITIES ARE BOUND TO FOLLOW THE DECISI ON OF THE CHENNAI ITA NO.1780/MDS/2015 5 SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., (SURPA) . SINCE THE LD.CIT(A) HAS RIGHTLY FOLLOWED THE DECISION OF THE DECISION OF SAK SOFT LTD., CITED SUPRA AND HELD THE ISSUES IN FAVOU R OF THE ASSESSEE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). THEREFORE WE HEREBY CONFIRM THE ORDER O F THE LD. LD. CIT (A). 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON WEDNESDAY, THE 17 TH OF FEBRUARY, 2016 AT CHENNAI. SD/- SD/- ' # $ . % & ' ( DUVVURU RL REDDY ) ) ( ( ( ) * + ) ) ' CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 17 TH FEBRUARY,2016. K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,'' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4,6 /GF
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