ACIT, CHENNAI V. M/s. Venture Lighting India Limited, CHENNAI

ITA 2166/CHNY/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73732 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 30-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI IRS
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , . . !' , # '$ % BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.2166/MDS/2012 ( / ASSESSMENT YEAR : 2008-2009) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(4) CHENNAI. ( &' /APPELLANT) VS M/S. VENTURE LIGHTING INDIA LIMITED PLOT NO.30, D-5, PHASE- II, MEPZ, TAMBARAM, CHENNAI 600 045. [PAN: AAACA9284H] ( ()&' /RESPONDENT) / APPELLANT BY : SHRI. ANIRUDH RAI, IRS, CIT. / RESPONDENT BY : SHRI. A.S. SRIRAMAN, ADV /DATE OF HEARING : 10.03.2014 /DATE OF PRONOUNCEMENT : 10.03.2014 '* / O R D E R PER S.S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL ARISES FROM THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, CHENNAI D ATED 08.08.2012, I.T.A.NO.2166/MDS/2012. :- 2 -: PASSED IN ITA NO.164/2011-12/A.III FOR ASSESSMENT Y EAR 2008-2009, IN PROCEEDINGS UNDER SECTION 143(3) R.W.S 144 OF THE I NCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. THE SOLE SUBSTANTIVE GRIEVANCE OF THE REVENUE CHALL ENGES THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFI CER TO INCLUDE FOREIGN EXCHANGE FLUCTUATION GAINS AS A PART OF EXPORT TURN OVER FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 10A OF THE ACT . IN THE COURSE OF HEARING, IT REITERATES THE PLEADINGS IN THE GROUNDS AND PRAYS FOR ACCEPTANCE OF THE APPEAL. 3. IN REPLY, THE ASSESSEE STRONGLY SUPPORTS THE ORDER OF THE CIT(A) AND SUBMITS THAT THE ISSUE IS COVERED IN ITS FAVO UR BY DECISION OF THE TRIBUNAL IN CASE OF ACIT VS. INAUTIX TECHNOLOGIE S INDIA (P) LTD IN ITA NO.1054/MDS/2006, DATED 20.07.2012. 4. THE ASSESSEE IS A COMPANY ENGAGED IN MANUFACTURIN G AND SALE OF METAL HALIDE LAMPS. IT HAS FILED ITS RETURN O N 24.09.2008 DECLARING INCOME OF H11,33,84,761/- FOLLOWED BY A REVISED R ETURN DATED 24.09.2009. THIS TIME, IT ADMITTED THE SAME INCOME BUT CLAIMED HIGHER DEDUCTION UNDER SECTION 10A OF THE ACT. THE ASSESS ING OFFICER FRAMED REGULAR ASSESSMENT VIDE ORDER DATED 09.12.2011 CO MPUTING TOTAL INCOME OF H40,96,27,560/- AFTER EXCLUDING FOREIGN EXCHANGE I.T.A.NO.2166/MDS/2012. :- 3 -: FLUCTUATION GAINS OF H36,99,36,228/- FROM ELIGIBLE PROFIT FOR THE PURPOSE OF DEDUCTION. WHILE DOING SO, HE OBSERVED THESE GAINS WERE RESULT OF FLUCTUATION IN FOREIGN EXCHANGE MARKET AN D NOT DIRECTLY DERIVED FROM ASSESSEES EXPORT ACTIVITIES. 5. IN THE COURSE OF LOWER APPELLATE PROCEEDINGS, THE CIT(A) HAS OVERRULED ORDER OF THE ASSESSING OFFICER ON BASIS OF THE TRIBUNAL ORDER IN THE CASE OF ACIT VS. INAUTIX TECHNOLOGIES INDIA (P) LTD IN ITA NO.1054/MDS/2006 AND HELD THAT FLUCTUATION IN FOREI GN GAINS DESERVES TO BE TREATED AS AN INTEGRAL PART OF EXPORT BUSINE SS UNDER SECTION 10A OF THE ACT. IN THESE CIRCUMSTANCES, THE REVENUE HA S FILED THE INSTANT APPEAL. 6. WE HAVE HEARD BOTH PARTIES AT LENGTH AND GONE THROU GH THE CASE FILE. THE SOLE QUESTION SOUGHT TO BE RAISED BY THE REVENUE IS THAT IMPUGNED FOREIGN EXCHANGE FLUCTUATION OUGHT NOT TO BE TREATED AS PART OF THE EXPORT ACTIVITIES AND THEREFORE THE GAI NS ARISING THERE FROM HAVE TO BE EXCLUDED FOR THE PURPOSE OF COMPUTING DE DUCTION UNDER SECTION 10A OF THE ACT. ON BEING GRANTED OPPORTUNIT Y TO REBUT THE DECISION OF THE CO-ORDINATE BENCH(SUPRA), THE REVEN UE HAS FAILED TO REFER ANY CONTRARY CASE LAW. IN THESE CIRCUMSTANCE S, WE AFFIRM THE FINDINGS OF THE CIT(A) UNDER CHALLENGE. I.T.A.NO.2166/MDS/2012. :- 4 -: 7. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON MONDAY, THE 10 TH OF MARCH, 2014 AT CHENNAI SD/- SD/- (DR. O.K. NARAYANAN) VICE PRESIDENT (S.S. GODARA) JUDICIAL MEMBER DATED:10TH ! MARCH, 2014 K.V COPY TO: APPELLANT/RESPONDENT/CIT(A)/CIT/DR