M/s. Sri Lakshmi Comptech , Visakhapatnam V. The ITO, Ward (1), Srikakulam

ITA 19/VIZ/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6567 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-12-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 22-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S ARAVINDHAKSHM
• Assessee Lawyers: Y ANIL KUMAR
• Keywords: Revised return
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER ITA NO. 1 9 / VIZ /201 6 (ASST. YEAR : 20 05 - 06 ) M/S. SRI LAKSHMI COMPTECH, S.S.L.M. COMPLEX, RAJAM, SRIKAKULAM DISTRICT. V . IT O , WARD - 1, SRIKAKULAM. PAN NO. AASFS 7353 Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI Y.ANIL KUMAR C A. DEPARTMENT BY : SHRI R.S. ARAVINDHAKSHM - DR DATE OF HEARING : 2 3 / 01 /201 7 . DATE OF PRONOUNCEMENT : 25 / 01 /201 7 . O R D E R PER V. DURGA RAO, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 0 2/ 11 /201 5 FOR THE ASSESSMENT YEAR 2005 - 06 . 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS IN THE BUSINESS OF DEVELOPMENT AND EXPORT OF SOFTWARE, HAD FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF 27,39,980/ - AND CLAIMED THE SAME AS EXEMPT UNDER SECTION 10A OF THE INCOME TAX ACT, 1961 . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER NOTED THAT IT WAS SEEN FROM THE BALANCE SHEET FILED BY THE ASSESSEE FOR THE F INANCIAL Y EAR END ING O N 2 ITA NO. 19/VIZ/2016 31/03/2005 THAT THE ASSESSEE HAS SHOWN 10,56,000/ - AS RECEIVABLE FROM SOFTPATH OY AS ON 31/03/2005 . A LONG WITH RETURN OF INCOME SUBMITTED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005 - 06 , A CERTIFICATE OF CHARTERED ACCOUNTANT WAS ALSO ENCLOSED STATING THAT THE EXPORT EARNINGS WERE DULY RECEIVED AND ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT. HOWEVER, ON VERIFICATION OF THE BANK STATEMENTS, IT IS SEEN THAT THIS AMOUNT HAS NEVER BEEN RECEIVED IN INDIA AND HENCE THE CERTIFICATE GIVEN BY THE CHARTERED ACCOUNTANT IS FALSE AND HENCE, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 10A OF THE ACT. THEREAFTER, THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE TO T HE NOTICE ISSUED BY THE ASSESSING OFFICER, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 11/03/2009 ADMITTING THE TOTAL INCOME OF 16,83,979/ - AND CLAIMED THE SAME AS EXEMPT UNDER SECTION 10A BY IGNORING THE CLAIM MADE ORIGINALLY OF 10,56,000/ - . IT W AS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THERE IS A MISTAKE CREPT IN THE ACCOUNTS MAINTAINED BY HIM AND OVERSIGHT THE AMOUNT OF 10,56,000/ - SHOWED AMOUNT AS RECEIVABLE IN THE BALANCE SHEET . IN FACT, NO BILL WAS SENT NO AMOUNT WAS RECEIVED BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER NOT ACCEPTED THE SUBMISSIONS MADE BY THE ASSESSEE AND THE AMOUNT OF 10,56,000/ - IS ADDED IN THE HANDS OF THE ASSESSEE. 3 . ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 3 ITA NO. 19/VIZ/2016 4 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW . THE ASSESSEE IS IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND EXPORT , ORIGINALLY FILED ITS RETURN OF INCOME BY CLAIMING EXEMPTION UNDER SECTION 10A OF THE ACT FOR 27,39,980/ - . THE ASSESSING OFFICER WHILE PROCESSING THE RETURN OF INCOME, NOTICED THAT THE AMOUNT OF 10,56,000/ - AS RECEIVABLE FROM SOFTPATH OY ON 31/03/2005 AND ASKED THE ASSESSE E WHY TH IS AMOUNT , WHICH IS NOT RECEIVED , CLAIMED AS EXEMPT UNDER SECTION 10A OF THE ACT AND ALSO REOPEN E D THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. BEFORE THE ASSESSING OFFICER, THE ASSESSEE SUBMITTED THAT THERE IS A MISTAKE CREPT IN THE ACCOUNTS MAINTAINED BY HIM. IN FACT, THE ASSESSEE HAS NOT RECEIVED ANY AMOUNT AND NO INVOICE WAS SENT TO THE SOFTPATH OY COMPANY . HOWEVER, THE ASSESSING OFFICER NOT ACCEPTED THE EXPLANATION GIVEN BY THE ASSESSEE AND THE AMOUNT OF 10,56,000/ - ADDED IN THE HANDS OF THE ASSESSEE AS HIS INCOME . WE FIND THAT THE ASSESSING OFFICER HIMSELF HAS NOTICED TH A T THE AMOUNT OF 10,56,000/ - IS RECEIVABLE AND NOT YET RECEIVED, T HEREFORE, HE DECIDED THAT THE ASSESSEE IS NO T ELIGIBLE FOR EXEMPTION UNDER SECTION 10A OF THE ACT IN RESPECT OF 10,56,000/ - . WHEN THE ASSESSING OFFICER AS K ED THE ASSESSEE, IT WAS CLEAR L Y SUBMITTED TH A T THERE IS A MISTAKE CREPT IN THE ACCOUNTS MAINTAINED BY HIM. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAS RECEIVED THE AMOUNT AND NOT SHOWN IN THE BOOKS. THE ASSESSING OFFICER HIMSELF DISALLOWED THE CLAIM MADE BY THE ASSESSEE ON THE GROUND TH A T THE 4 ITA NO. 19/VIZ/2016 ASSESSEE IS NOT RECEIVED. UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , THE AM OUNT WHICH IS NOT RECEIVED BY THE ASSESSEE CANNOT BE CONSIDERED AS AN INCOME IN THE HANDS OF THE ASSESSEE . BOTH THE AUTHORITIES BELOW WRONGLY CAME TO THE CONCLUSION THAT THE AMOUNT OF 10,56,000/ - AS INCOME OF THE ASSESSEE. THUS, THIS GROUND OF APPEAL RA ISED BY THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON TH IS 2 5 T H DAY OF JANUARY , 201 7 . S D / - ( V. DURGA RAO ) JUDICIAL MEMBER DATED : 2 5 T H JANUARY , 201 7 . VR/ - COPY TO: 1 . THE ASSESSEE. M/S. SRI LAKSHMI COMPTECH, S.S.L.M. COMPLEX, RAJAM, SRIKAKULAM DISTRICT. 2 . THE REVENUE - ITO, WARD - 1, SRIKAKULAM. 3 . THE CIT - 2, VISAKHAPATNAM . 4 . THE CIT(A) - 2, VISAKHAPATNAM. 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., VISAKHAPATNAM .