Synchronoss Technologies India Pvt Ltd., Bangalore V. Deputy Commissioner of Income-Tax, Bangalore

ITA 2032/BANG/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8533 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-02-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 24-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A R V SREENIVA SAN J
• Assessee Lawyers: V K GURUNATHAN
• Keywords: Principle of natural justice; Competent authority
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.2032/BANG/2016 ASSESSMENT YEAR : 2008-09 M/S. SYNCHRONOSS TECHNOLOGIES INDIA PVT. LTD., (FORMERLY KNOWN AS M/S. WISOR TELECOM INDIA PVT. LTD.) 6/7 FLOOR, TOWER B, NO. 12, SUBRAMANIAM ARCADE, BANNERGHATTA ROAD, BANGALORE 560 029. PAN: AAACW 3870F VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(5), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI V.K. GURUNATHAN, ADVOCATE RESPONDENT BY : SHRI A.R.V. SREENIVASAN, JCIT(DR) DATE OF HEARING : 16.02.2017 DATE OF PRONOUNCEMENT : 23.02.2017 O R D E R THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST TH E ORDER OF THE LD. CIT (APPEALS), BENGALURU-6, BENGALURU DATED 17.08.2 016 FOR THE ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - ITA NO.2032/BANG/2016 PAGE 2 OF 6 1.0 GROUND NO. 1: 1.1 ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) (CIT (A)) HA S MISINTERPRETED THE FACT THAT THE APPELLANT IS A SEZ UNIT WHILE THE APPELLANT HAD CLEARLY STATED IN ITS SUBMI SSION THAT IT IS AN STPI UNIT. 1.2 ON FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LEARNED CIT (A)/AO HAS ERRED IN NOT PROVIDING ANY OPPORTUNITY TO THE APPELLANT TO FURNISH DOCUMENT EVIDENCING THAT IT IS AN STPI UNIT AND HAS ERRED IN STATING THAT NO EVIDENCE HAS BEEN FILED OR PRODUCED TO SHOW THAT IT FUNCTIONS FROM A SEZ UNIT, THUS VIOLATING THE PR INCIPLE OF NATURAL JUSTICE. 1.3 ON FACTS AND CIRCUMSTANCES OF THE CASE AND LAW, THE LEARNED CIT(A)/AO HAS ERRED IN RE-COMPUTING EXEMPTI ON U/S 10A BY REDUCING THE AMOUNT OF EXPORT PROCEEDS REALIZED AFTER 6 MONTHS AMOUNTING TO RS. 1,65,03,05 3/- WITHOUT CONSIDERING THE AMENDMENT MADE TO RBI NOTIFICATION NO. FEMA 23/2000, FOREIGN EXCHANGE MANAGEMENT (EXPORT OF GOODS AND SERVICES) REGULATIO NS, 2000 DATED 3 MAY 2000, VIDE AP (DIR) CIRCULAR NO. 2 5 DATED 01 NOVEMBER 2004, WHEREBY THE PERIOD OF EXPOR T REALIZATION BY UNITS IN STPI WAS EXTENDED FROM SIX MONTHS TO TWELVE MONTHS. ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO ONE ANOTHER. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL HEREIN ON OR BEFORE HEARING OF THE APPEAL. 3. IT WAS SUBMITTED BY THE LD. AR OF ASSESSEE THAT GROUND NOS.1.1 & 1.2 ARE NOT PRESSED AND ACCORDINGLY THESE GROUNDS A RE REJECTED AS NOT PRESSED. 4. REGARDING GROUND NO.1.3, IT WAS SUBMITTED BY THE LD. AR OF ASSESSEE THAT AS PER THE TRIBUNALS ORDER RENDERED IN THE CASE OF HCL EAI SERVICES LTD. V. DCIT AS REPORTED IN 35 TAXMANN.COM 146 (BANGALORE TRIB.) ITA NO.2032/BANG/2016 PAGE 3 OF 6 (COPY AVAILABLE ON PAGES 53 TO 77 OF PB), THE EXPOR T PROCEEDS BROUGHT INTO INDIA WITHIN THE EXTENDED TIME PERMITTED BY RBI SHO ULD NOT BE EXCLUDED FROM THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTA TION OF THE DEDUCTION ALLOWABLE U/S. 10A OF THE I.T. ACT, 1961 [THE ACT ]. HE HAS DRAWN OUR ATTENTION TO PARAS 34 TO 36 OF THIS TRIBUNALS ORDE R. 5. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AU THORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT IN THE PRESENT CASE, IT IS NOTED BY THE AO ON PAGE 3 OF THE ASSESS MENT ORDER THAT A SUM OF RS.1,65,03,053 (FIRC # 934797) HAS BEEN RECEIVED AFTER SIX MONTHS FROM THE END OF RELEVANT FINANCIAL YEAR AND HENCE, IT HAS TO BE EXCLUDED FROM THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTA TION OF DEDUCTION U/S. 10A OF THE ACT. AS PER THE TRIBUNALS ORDER CITED BY THE LD. AR OF ASSESSEE AS NOTED ABOVE, IT WAS HELD BY THE TRIBUNAL THAT TH E PERIOD OF BRINGING EXPORT PROCEEDS INTO INDIA HAS BEEN EXTENDED BY RBI AND IF THE EXPORT PROCEEDS HAVE BEEN BROUGHT INTO INDIA WITHIN SUCH E XTENDED TIME, SUCH EXPORTS SHOULD NOT BE REDUCED FROM THE EXPORT TURNO VER FOR THE PURPOSE OF DEDUCTION ALLOWABLE U/S. 10A OF THE ACT. FOR THE S AKE OF READY REFERENCE, I REPRODUCE PARAS 34 TO 36 OF THIS TRIBUNALS ORDER:- 34. GROUND NO.4 RAISED BY THE ASSESSEE READS AS F OLLOWS:- FOREIGN RECEIPT NOT RECEIVED WITHIN STIPULATED TIM E (I.) THE ASSESSEE SUBMITS THAT THE FOREIGN RECEIPT HAS BEEN RECEIVED WITHIN THE TIME PERMITTED BY RESERVE BANK OF INDIA AND HENCE SHOULD NOT BE EXCLUDED. THE ASSESSEE POINTS OUT TH AT SECTION 155(11A) OF THE ACT ALSO PERMITS RECTIFICATION OF T HE SAME. ITA NO.2032/BANG/2016 PAGE 4 OF 6 (II.) IN ANY EVENT, IF SUCH AMOUNT IS EXCLUDED FRO M EXPORT TURNOVER IT SHOULD ALSO BE EXCLUDED FROM THE TOTAL TURNOVER (CI T V. M/S. TATA ELXSI LTD. 2011-TIOL-684-HC-IT). 35. IT IS THE STAND OF THE ASSESSEE THAT IN VIEW OF THE RBI CIRCULAR DATED 01.11.2004, THE ASSESSEE WHO IS A UNIT SET UP UNDER THE STP SCHEME, IS ALLOWED TO REALIZE AND REPATRIATE THE FU LL VALUE OF EXPORT PROFITS WITHIN A PERIOD OF 12 MONTHS FROM THE DATE OF EXPORTS. OUR ATTENTION WAS DRAWN TO THE PROVISIONS OF SECTION 10 A(3) OF THE ACT WHEREBY RBI IS A COMPETENT AUTHORITY TO PRESCRIBE T HE PERIOD WITHIN WHICH THE SALE PROCEEDS FROM EXPORT ARE TO BE BROUG HT INTO INDIA. IN VIEW OF THE ABOVE, IT WAS SUBMITTED THAT THE AO SHO ULD BE DIRECTED TO ADD THE SUM OF FOREIGN EXCHANGE BROUGHT INTO INDIA BY THE ASSESSEE WITHIN THE EXTENDED PERIOD OF 12 MONTHS PERMITTED B Y THE RBI CIRCULAR [REF: RBI/2004-05/264 A.P.(DIR SERIES) CIRCULAR NO. 25 DATED NOVEMBER 1, 2004]. 36. WE HAVE CONSIDERED THE SUBMISSION OF THE LD. CO UNSEL FOR THE ASSESSEE AND WE FIND THAT IN THE LIGHT OF THE RBI C IRCULAR AND THE PROVISIONS OF SECTION 10A(3) OF THE ACT, THE AMOUNT OF EXPORT PROCEEDS BROUGHT INTO INDIA WITHIN THE EXTENDED TIME PERMITT ED BY RBI SHOULD NOT BE EXCLUDED FROM THE EXPORT TURNOVER. WE HOLD AND DIRECT ACCORDINGLY. GROUND NO.4 IS ALLOWED. 7. FROM THE ABOVE PARAGRAPHS REPRODUCED FROM THE TR IBUNALS ORDER, IT IS SEEN THAT IT IS NOTED BY THE TRIBUNAL IN THIS CA SE THAT AS PER RBI CIRCULAR NO.25 DATED 01.11.2004, THE PERIOD OF BRINGING EXPO RT PROCEEDS INTO INDIA HAS BEEN INCREASED TO 12 MONTHS. BUT AS PER THE FA CTS AVAILABLE ON RECORD, IT IS SEEN THAT AS PER FIRC NO.934797 AVAILABLE AT PAGE 51 OF PB, THE EXPORT PROCEEDS OF RS.1,65,02,661 WAS RECEIVED IN I NDIA ON 23.10.2008, BUT IT IS NOT CLEAR AS TO WHAT WAS THE DATE OF RELE VANT EXPORT FOR WHICH THIS REMITTANCE WAS RECEIVED, TO FIND OUT AS TO WHETHER SUCH RECEIPT IS WITHIN THE EXTENDED PERIOD OF ONE YEAR OR NOT. HENCE, I FEEL IT APPROPRIATE TO SET ASIDE THE ORDER OF LD. CIT(APPEALS) ON THIS ISSUE AND RES TORE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER FOR A FRESH DECISION. ACCORDINGLY, I SET ASIDE ITA NO.2032/BANG/2016 PAGE 5 OF 6 THE ORDER OF CIT(APPEALS) ON THIS ISSUE AND RESTORE THE MATTER BACK TO THE AO FOR A FRESH DECISION WITH A DIRECTION THAT THE A O HAS TO EXAMINE THIS ASPECT AS TO WHETHER THIS RECEIPT OF RS.1,65,02,661 AS PER FIRC # 934797 IS WITHIN THE EXTENDED PERIOD OF ONE YEAR FROM THE DATE OF EXPORT OR NOT AND IF IT IS FOUND THAT THIS RECEIPT IS WITHIN THIS EXT ENDED PERIOD OF ONE YEAR FROM THE DATE OF RELEVANT EXPORT, THEN THE SAME SHOULD N OT BE EXCLUDED FROM THE EXPORT TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCT ION ALLOWABLE U/S. 10A OF THE ACT. THE AO HAS TO PASS NECESSARY ORDER AS PER LAW AS PER THE ABOVE DISCUSSION, AFTER PROVIDING ADEQUATE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF FEBRUARY, 2017. SD/- ( A.K. GARODIA ) ACCOUNTANT MEMBER BANGALORE, DATED, THE 23 RD FEBRUARY, 2017. / D ESAI S MURTHY / MS / ITA NO.2032/BANG/2016 PAGE 6 OF 6 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.