DCIT, CHENNAI V. M/s. Scope International Pvt. Ltd., CHENNAI

ITA 200/CHNY/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1867 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-10-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 15-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.200/CHNY/2018 ( )( / ASSESSMENT YEAR : 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), CHENNAI - 600 034. V. M/S SCOPE INTERNATIONAL PVT. LTD., 1 ST FLOOR, EUROPE BUILDING, GRINDLAYS GARDENS, NO.1, HADDOWS ROAD, NUNGAMBAKKAM, CHENNAI - 600034. PAN : AAECS 9043 E (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI GURU BASHYAM, JCIT -.+, / 0 / RESPONDENT BY : SH. SP. CHIDAMBARAM, ADVOCATE 1 / 2% / DATE OF HEARING : 05.11.2018 3') / 2% / DATE OF PRONOUNCEMENT : 16.11.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -15, CHENN AI, DATED 28.09.2017 AND PERTAINS TO ASSESSMENT YEAR 2009-10. 2 I.T.A. NO.200/CHNY/18 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO DIRECTION OF THE CIT(APPEALS) TO EXCLUDE THE EXPEND ITURE INCURRED IN FOREIGN CURRENCY BOTH FROM EXPORT TURNOVER AND TOTA L TURNOVER FOR THE PURPOSE OF DEDUCTION UNDER SECTION 10A OF THE INCOM E-TAX ACT, 1961 (IN SHORT 'THE ACT'). 3. WE HEARD SHRI GURU BASHYAM, THE LD. DEPARTMENTAL REPRESENTATIVE AND SH. SP. CHIDAMBARAM, THE LD.COUN SEL FOR THE ASSESSEE. THE ONLY CONTENTION OF THE REVENUE BEFOR E THIS TRIBUNAL IS THAT THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE SPECIAL BENCH OF THIS TRIBUNAL IN ITO V. SAK SOFT L IMITED (2009) 313 ITR (AT) 353 IS PENDING BEFORE THE HIGH COURT AND I T HAS NOT ATTAINED FINALITY. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT WHEN THE SPECIAL BENCH OF THIS TRIBUNAL DECIDED THE MATTER, IT IS BINDING ON ALL OTHER BENCHES. IT IS NOT THE CASE O F THE REVENUE THAT THE ORDER OF THIS TRIBUNAL IN SAK SOFT LIMITED (SUP RA) IS STAYED BY THE HIGH COURT. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTL Y FOLLOWED THE ORDER OF THIS TRIBUNAL IN THE CASE OF SAK SOFT LIMI TED (SUPRA). 3 I.T.A. NO.200/CHNY/18 4. EVEN OTHERWISE, THE DENOMINATOR AND NUMERATOR SH OULD BE OF THE SAME FACTOR. THEREFORE, ONCE IT WAS TAKEN A S EXPORT TURNOVER, IT SHOULD BE TAKEN AS TOTAL TURNOVER ALSO. IN THI S CASE, THE ASSESSING OFFICER HAS TAKEN THE EXPENDITURE MADE IN FOREIGN CURRENCY AS EXPORT TURNOVER. HOWEVER, THE SAME WAS EXCLUDED FROM THE TOTAL TURNOVER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO EXCLUDE THE EXPENDITURE INCURRED IN FORE IGN CURRENCY BOTH FROM EXPORT TURNOVER AND TOTAL TURNOVER. HENCE THE ORDER OF THE CIT(APPEALS) IS CONFIRMED. 5. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DIREC TION OF THE CIT(APPEALS) TO EXAMINE THE CASE OF EXEMPTION UNDER SECTION 10A OF THE ACT IN RESPECT OF UNIT II. 6. HAVING HEARD THE LD. D.R. AND THE LD.COUNSEL FOR THE ASSESSEE, THIS TRIBUNAL IS OF THE CONSIDERED OPINIO N THAT WHEN THE ASSESSEE MADE CLAIM IN RESPECT OF UNIT II, IT HAS T O BE EXAMINED. THE CIT(APPEALS) MAY NOT HAVE POWER TO SET ASIDE TH E ORDER OF THE ASSESSING OFFICER FOR RE-EXAMINATION. HOWEVER, THE MATTER NEEDS TO BE RE-EXAMINED BY THE ASSESSING OFFICER. THEREFORE , IN EXERCISE OF 4 I.T.A. NO.200/CHNY/18 POWER CONFERRED ON THIS TRIBUNAL, THE ASSESSING OFF ICER IS DIRECTED TO RE-EXAMINE THE MATTER IN RESPECT OF UNIT II ALSO . 7. THE NEXT ISSUE ARISES FOR CONSIDERATION IS CLAIM OF SURCHARGE AND EDUCATION CESS FOR THE PURPOSE OF COMPUTING MAT CREDIT. THE CIT(APPEALS) DIRECTED THE ASSESSING OFFICER TO ALLO W THE MAT CREDIT AFTER VERIFICATION. THE OBJECTION OF THE DEPARTMEN T IS THAT THE CIT(APPEALS) HAS NO POWER TO DIRECT THE ASSESSING O FFICER TO VERIFY. HOWEVER, THE MAT CREDIT HAS TO BE VERIFIED BEFORE A LLOWING THE CLAIM. THE SURCHARGE AND EDUCATION CESS ARE PART O F INCOME-TAX AS HELD BY APEX COURT IN CIT V. K. SRINIVASAN (1972) 8 3 ITR 346. THEREFORE, IN EXERCISE OF POWER CONFERRED ON THIS T RIBUNAL, THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE CLAIM O F THE ASSESSEE AND THEREAFTER ALLOW THE CLAIM WITH REGARD TO MAT CREDI T. IN VIEW OF THE ABOVE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTE RFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. 5 I.T.A. NO.200/CHNY/18 ORDER PRONOUNCED IN THE COURT ON 16 TH NOVEMBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 16 TH NOVEMBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-15, CHENNAI 4. PRINCIPAL CIT-6, CHENNAI 5. 7: -2 /DR 6. ;( < /GF.