DCIT, Cirlce-1(1), Hyd, Hyderabad V. Applabs Technologies Pvt.Ltd., Hyd, Hyderabad

ITA 214/HYD/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 6576 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAN SINGH SINGHANIA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI D.MANMOHAN, VICE PRESIDENT AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO.214/HYD/2016 : ASSESSMENT YEARS 2010-1 1 DY. COMMISSIONER OF INCOME - TAX, CIRCLE 1(1), HYDERABAD V/S M/S. APPLABS TECHNOLOGIES PVT. LTD., HYDERABAD (PAN - AADCA 0632 N ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MOHAN SINGH SINGHANIA DR RESPONDENT BY : NONE DATE OF HEARING 19.5.2016 DATE OF PRONOUNCEMENT 19.5.2016 O R D E R PER D.MANMOHAN, VICE PRESIDENT : THIS APPEAL FILED AT THE INSTANCE OF THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INC OME-TAX(APPEALS) I, HYDERABAD AND IT PERTAINS TO ASSESSMENT YEAR 201 0-11. 2. REGISTRY HAS ISSUED A DEFECT MEMO STATING THAT COL. NOS.1, 2 AND 5 ARE FILLED INCORRECTLY. 3. AT THE TIME OF HEARING, LEARNED CIT-DEPARTMENT AL REPRESENTATIVE, SUBMITTED THAT THE ONLY ISSUE INVOL VED IN THIS APPEAL IS COVERED BY THE DECISION OF THE ITAT, WHICH HAS BEEN REFERRED TO BY THE LEARNED CIT(A) IN PARA 5.2 OF THE IMPUGNED ORDER, WHICH IS EXTRACTED FOR IMMEDIATE REFERENCE ITA NO.214/HYD/2016 M/S. APPLABS TECHNOLOGIES P. LTD., HYDERABAD 2 5.2 TELE COMMUNICATION CHARGES: THE FIRST GROUND RAISED ID THE ALLOWANCE OF TELECOMMUNICATION CHARGES. DURING THE ASSESSMENT, T HE ASSESSING OFFICER DISALLOWED THE TELECOMMUNICATION EXPENDITURE FROM THE EXPORT TURNOVER. HOWEVER, IT W AS NOT REDUCED FROM TOTAL TURNOVER. FOLLOWING THE HYDERABAD TRIBUNAL BENCH, THE COMMUNICATION CHARGES NEED TO BE REDUCED FROM TOTAL TURNOVER ALSO. REFEREN CE IS MADE TO FOLLOWING CASES: 1. M/S. SOFTSOL (I) LTD. VS. DCIT (2008) 22 SOT 271 (HYDERABAD ITAT); 2. PATNI TELECOM (P) LTD. VS. ITO (2008) 120 TTJ 967 (HYDERABAD ITAT). 3. I-GATE GLOBAL SOLUTIONS LTD. V/S. ASST. CIT (2008) (24 SOT 3))(BANG)(URO) 4. IN ITS OWN CASE OF JURISDICTIONAL TRIBUNAL (ITA NO.784/HYD/2008 FOR AY 2004-05). HENCE THE AO IS DIRECTED TO REDUCE RS.1,53,23,893, T HE COMMUNICATION CHARGES FROM TOTAL TURNOVER ALSO FOR S.10A PURPOSES. -GROUND ALLOWED UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT EVEN ON MERITS, REVENUE HAS NO CASE AND THEREFORE PROCEED TO DISPOS E OF THE APPEAL ON MERITS. 4. AT THIS STAGE, THE LEARNED DEPARTMENTAL REPRES ENTATIVE SUBMITTED THAT THE PROCEDURE FOLLOWED BY THE ITAT I N THE PRECEDENTS MENTIONED BY THE CIT(A) DOES NOT APPEAR TO BE LOGIC AL IN AS MUCH AS THE PURPOSE OF GRANTING EXEMPTION UNDER S.10A STAND S DEFEATED, IF THE ASSESSEE GETS BENEFIT OF DEDUCTION OF THE AMOUNT FR OM THE EXPORT TURNOVER AS WELL AS GROSS TURNOVER. 5. NONE APPEARED ON BEHALF OF THE ASSESSEE-RESPON DENT. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED DEPA RTMENTAL ITA NO.214/HYD/2016 M/S. APPLABS TECHNOLOGIES P. LTD., HYDERABAD 3 REPRESENTATIVE AND PERUSED THE RECORD. SINCE THE HY DERABAD BENCHES OF ITAT HAVE CONSISTENTLY TAKEN A VIEW THAT TELECOM MUNICATION EXPENDITURE SHOULD NOT ONLY BE REDUCED FROM THE EXP ORT TURNOVER, BUT ALSO BE REDUCED FROM THE TOTAL TURNOVER, THE VIEW T AKEN BY THE LEARNED CIT(A) IS HEREBY CONFIRMED, BEING IN CONFORMITY WIT H THE VIEW TAKEN BY THE TRIBUNAL IN SIMILAR CASES. WE ACCORDINGLY DISMI SS THE APPEAL FILED BY THE REVENUE. PRONOUNCED ACCORDINGLY IN THE OPEN COURT. SD/- SD/- (S.RIFAUR RAHMAN ) (D.MANMOHAN) ACCOUNTANT MEMBER. VICE PRESIDENT DT/- 19 TH MAY, 2016 COPY FORWARDED TO: 1. M/S. APPLABS TECHNOLOGIES PVT. LTD., PLOT NO.83 & 84, ROAD NO.2, BANJARA HILLS, HYDERABAD 500 034 2. DY. COMMISSIONER OF INCOME - TAX CIRCLE 1(1), HYDERABAD 3. COMMISSIONER OF INCOME - TAX(APPEALS) II HYDERABAD 4. COMMISSIONER OF INCOME - TAX I, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE ITAT, HYDERABAD B.V.S.