Avalon Technologies Pvt. Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2201/CHNY/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7178 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 25-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 18-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GURU BHASHYAM
• Assessee Lawyers: D ANAND
• Keywords: Business income; Competent authority; Capital receipt
• Section: 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . , ! # $ , % & BEFORE SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./I.T.A.NOS. 2200 & 2201/MDS/2013 ( / ASSESSMENT YEARS: 2007-08 & 2008-09) AVALON TECHNOLOGIES P.LTD., TPI BLOCK, B-7, FIRST MAIN ROAD, MEPZ-SEZ TAMBARAM, CHENNAI-600 045. VS ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1), CHENNAI. PAN: AACCA4147K ( /APPELLANT) ( /RESPONDENT) & ./I.T.A.NOS. & 2267 TO 2270/MDS/2013 ( / ASSESSMENT YEARS: 2005-06 & 2008-09) DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-I(1), CHENNAI-34 VS AVALON TECHNOLOGIES P. LTD., TPI BLOCK, B-7, FIRST MAIN ROAD, MEPZ-SEZ TAMBARAM, CHENNAI-600 045. PAN: AACCA4147K ( /APPELLANT) ( /RESPONDENT) ASSESSEE BY : MR. D.ANAND, ADVOCATE REVENUE BY : MR. GURU BHASHYAM, JCIT / DATE OF HEARING : 25 TH SEPTEMBER, 2014 /DATE OF PRONOUNCEMENT : 31 ST OCTOBER, 2014 / O R D E R PER BENCH: ALL THESE APPEALS ARE FILED BY THE ASSESSE AND THE REVENUE AGAINST THE COMMON ORDER OF THE COMMISSION ER OF INCOME TAX (APPEALS)-II, CHENNAI DATED 30.9.2013 F OR THE ASSESSMENT YEARS 2005-06 TO 2008-09 . SINCE ALL THE SE APPEALS ARE ARISING OUT OF COMMON ORDER OF THE 2 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 COMMISSIONER OF INCOME TAX (APPEALS), THEY ARE HEAR D TOGETHER AND DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS.2267 TO 2270/MDS/2013: (REVENUE APPEALS): 2. THESE APPEALS ARE FILED BY THE REVENUE FOR THE ASSESSMENT YEARS 2005-06 TO 2008-09. THE ONLY ISSUE IN ALL THESE APPEALS OF THE REVENUE IS THAT COMMISSIONER O F INCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSI NG OFFICER TO RECOMPUTED DEDUCTION UNDER SECTION 10A BY EXCLU DING FREIGHT EXPENSES FROM EXPORT TURNOVER AND TOTAL TUR NOVER FOR COMPUTATION OF DEDUCTION UNDER SECTION 10A OF THE A CT. THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENTS EXCL UDED FREIGHT CHARGES FROM EXPORT TURNOVER. THE ASSESSING OFFICER HELD THAT FREIGHT CHARGES INCURRED IN FOREIGN CURRE NCY ATTRIBUTABLE TO DELIVERY OF COMPUTER SOFTWARE OUTS IDE INDIA HAS TO BE EXCLUDED FROM EXPORT TURNOVER. THE ASSESS EE CONTENDED THE SAID FREIGHT CHARGES SHOULD ALSO BE E XCLUDED FROM TOTAL TURNOVER. ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF SPECIAL BEN CH OF THIS TRIBUNAL IN THE CASE OF CIT VS. SAK SOFT LTD. [313 ITR 3 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 353(AT)] AND THE DECISION OF HONBLE BOMBAY HIGH CO URT IN THE CASE OF CIT VS.GEM PLUS JEWELLERY INDIA LTD. (3 30 ITR 175) HELD THAT FREIGHT CHARGES SHOULD ALSO BE EXCLU DED FROM TOTAL TURNOVER FOR COMPUTATION OF DEDUCTION UNDER SECTION 10A OF THE ACT. AGAINST THE DECISION OF THE COMMISS IONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APPEAL BEFO RE US. 3. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON T HE ORDER OF THE ASSESSING OFFICER IN EXCLUDING FREIGHT CHARGES ONLY FROM EXPORT TURNOVER AND NOT FROM TOTAL TURNOV ER. 4. COUNSEL FOR THE ASSESSEE SUPPORTS THE ORDER OF T HE COMMISSIONER OF INCOME TAX (APPEALS) AND PLACES REL IANCE ON THE DECISION OF THE SPECIAL BENCH OF THIS TRIBUN AL IN THE CASE OF SAK SOFT LTD.(SUPRA) AND THE DECISION OF H ONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GEM PLUS JEWELLERY INDIA LTD. (SUPRA). 5. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHOR ITIES AND THE DECISIONS RELIED ON. THE ISSUE IN ALL THESE REVENUE 4 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 APPEALS IS SQUARELY COVERED BY THE DECISION OF SPEC IAL BENCH OF THIS TRIBUNAL IN THE CASE OF SAK SOFT LTD. (SUPR A), WHEREIN THE TRIBUNAL HELD THAT FREIGHT AND TELECOMMUNICATIO N CHARGES WHICH ARE REQUIRED TO BE EXCLUDED FROM EXPORT TURNO VER AS DEFINED UNDER EXPLANATION 2(III) OF SECTION 10B OF THE ACT SHOULD ALSO BE EXCLUDED FROM TOTAL TURNOVER FOR TH E PURPOSE OF COMPUTING RELIEF ALLOWABLE UNDER SECTION 10BOF T HE ACT. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ALL THESE F OUR YEARS ON THIS ISSUE AND REJECT THE GROUNDS OF APPEA L RAISED BY THE REVENUE. ITA NO.2220/MDS/2013 (A.Y.2007-08): 6. THE ONLY ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTA INING THE ORDER OF THE ASSESSING OFFICER IN TREATING SUBS IDY RECEIVED BY THE ASSESSEE AS INCOME. THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT ASSES SEE RECEIVED SUBSIDY TO THE TUNE OF ` 22,35,000/- AND THIS AMOUNT WAS NOT CREDITED TO PROFIT AND LOSS ACCOUNT BUT WAS DIRECTLY CREDITED TO RESERVE ACCOUNT AND SHOWN AS L IABILITY. 5 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 WHEN THE ASSESSING OFFICER CALLED FOR EXPLANATION, THE ASSESSEE APPEARS TO HAVE AGREED TO ADD BACK THE SAI D SUBSIDY TO THE INCOME. THE ASSESSING OFFICER COMPUT ED THE INCOME OF THE ASSESSEE BY ADDING SUBSIDY TO THE INC OME RETURNED. HOWEVER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AGAINST TH IS ADDITION. THE COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE ADDITION HOLDING THAT ASSESSEE HIMSEL F HAS AGREED FOR ADDITION IN THE COURSE OF ASSESSMENT PRO CEEDINGS AND THEREFORE ASSESSEE CANNOT BE ALLOWED TO AGITATE THE SAME IN THE APPEAL PROCEEDINGS. 7. COUNSEL FOR THE ASSESSEE SUBMITS THAT THESE SUBS IDIES ARE IN THE NATURE OF GENERAL SUBSIDY FOR ELECTRONIC S AND WOMEN WORKMEN AND THEY WERE NOT GIVEN AGAINST ANY SPECIFIC ASSETS AND THEREFORE THEY WERE NOT OFFERED FOR TAX. 8. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT SINCE T HE ASSESSEE HIMSELF HAS AGREED FOR THE ADDITION IN THE COURSE OF ASSESSMENT PROCEEDINGS, HE CANNOT AGITATE THE ISSUE IN 6 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 APPEAL. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTIONS:- 1. MAHESH P.SHAH VS. ACIT 103 TAXMANN 91 (KER) (238 ITR 130) 2. RAMESHCHANDRA & CO. VS. CIT (168 ITR 375 [BOM]) 3. RAMANLAL KAMDAR VS. CIT (108 ITR 73[MAD]) 4. STERLING MACHINES TOOLS VS. CIT (123 ITR 181 [AL L]) 9. COMING TO THE MERITS OF THE CASE, DEPARTMENTAL REPRESENTATIVE SUPPORTING THE ORDER OF THE LOWER AU THORITIES SUBMITS THAT GENERAL SUBSIDY RECEIVED BY THE ASSESS EE IS NOT CAPITAL IN NATURE. SINCE THESE SUBSIDIES ARE NOT RE CEIVED FOR ANY SETTING UP OF INDUSTRY AND THEREFORE SUBSIDY RE CEIVED BY THE ASSESSEE FOR ELECTRONICS AND WORKMEN ARE IN THE NATURE OF REVENUE. HE FURTHER SUBMITS THAT IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SAHNEY STE EL & PRESS WORKS LTD. (228 ITR 253) , SUBSIDY RECEIVED BY THE ASSESSEE IS NOT CAPITAL IN NATURE, THEREFORE THE SA ID SUBSIDY WAS RIGHTLY BROUGHT TO TAX AS REVENUE. 10. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES AND THE DECISIONS RELIED ON. THE ASSESSEE IN THE C OURSE OF 7 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 ASSESSMENT PROCEEDINGS APPEARS TO HAVE AGREED FOR T HE ADDITION IN RESPECT OF SUBSIDY RECEIVED BY IT. HOWE VER, IN THE COURSE OF APPEAL PROCEEDINGS, ASSESSEE AGITATED THA T SUBSIDY CANNOT BE BROUGHT TO TAX. THE ASSESSEE NEVE R DENIED THAT HE HAS NOT AGREED FOR THE ADDITION. EVEN ON ME RITS, THE ASSESSEE COULD NOT ESTABLISH AS TO WHY THE SUBSIDY RECEIVED BY IT IS TO BE TREATED AS CAPITAL RECEIPT AND NOT E XIGIBLE TO TAX. THE ASSESSEE HAS SIMPLY STATED THAT THE SUBSIDY IS RECEIVED TOWARDS ELECTRONICS AND WOMEN WORKMEN SUBSIDY AND I T IS A GENERAL SUBSIDY. THE ASSESSEE HIMSELF STATES THAT I T IS NOT RECEIVED IN RESPECT OF ANY PARTICULAR ASSET. IN SUC H CIRCUMSTANCES, IN OUR VIEW, SUBSIDY RECEIVED BY THE ASSESSEE CANNOT BE TREATED AS CAPITAL RECEIPT. THUS, WE SUST AIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) O N THE ISSUE OF BRINGING TO TAX THE SUBSIDY RECEIVED BY TH E ASSESSEE AND REJECT THE GROUNDS OF APPEAL RAISED BY THE ASSE SSEE. ITA NO.2201/MDS/2013: (A.Y. 2008-09): 11. THE FIRST ISSUE IN THIS APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN 8 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 DENYING DEDUCTION UNDER SECTION 10A OF THE ACT ON T HE SALE PROCEEDS IN FOREIGN EXCHANGE NOT BROUGHT INTO INDIA WITHIN SIX MONTHS FROM THE END OF THE FINANCIAL YEAR. 12. COUNSEL FOR THE ASSESSEE SUBMITS THAT SALE PROC EEDS IN FOREIGN EXCHANGE WERE BROUGHT TO INDIA BEYOND SIX MONTHS SHOULD ALSO BE CONSIDERED AS EXPORT TURNOVER UNDER SECTION 10A OF THE ACT AS THERE IS NO TIME LIMIT WITHIN WHI CH EXPORT PROCEEDS HAVE TO BE BROUGHT TO INDIA FOR UNDERTAKIN GS SITUATED IN SEZ UNDER THE FOREIGN EXCHANGE MANAGEME NT ACT, 1999. COUNSEL PLACES RELIANCE ON THE GROUNDS O F APPEAL. 13. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF LOWER AUTHORITIES IN REJECTING THE DEDUCTI ON UNDER SECTION 10A OF THE ACT ON SALE PROCEEDS IN FOREIGN EXCHANGE NOT BROUGHT INTO INDIA WITHIN SIX MONTHS FROM THE E ND OF THE FINANCIAL YEAR. IN SUPPORT OF HIS CONTENTIONS, THE DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF ACIT VS. AFTEK INFO SYS LTD. 9 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 [(2011) TIOL 399-ITAT-MUM], A COPY OF WHICH IS PLAC ED ON RECORD. 14. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES AND THE DECISIONS RELIED ON. ADMITTEDLY ASSESSEE R ECEIVED SALE PROCEEDS TO THE EXTENT OF ` 48.28 LAKHS AFTER A PERIOD OF SIX MONTHS FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE EXPORTS TOOK PLACE. SUB-CLAUSE (3) OF SECTION 10A O F THE ACT STIPULATES THAT SALE PROCEEDS OF ARTICLE OR THING OR COMPUTER SOFTWARE EXPORTED OUT OF INDIA SHOULD BE BROUGHT IN CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FU RTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW. IN THIS CASE , THE COMPETENT AUTHORITY IS RESERVE BANK OF INDIA. THE A SSESSEE HAS NOT PRODUCED ANY EVIDENCE TO SHOW THAT THE COMP ETENT AUTHORITY HAS GRANTED EXTENSION FOR RECEIVING SALE PROCEEDS BEYOND SIX MONTHS FROM THE END OF THE PREVIOUS YEAR . IN SUCH CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE UNDER SECT ION 10A OF THE ACT IS RIGHTLY DISALLOWED BY THE LOWER AUTHO RITIES. THEREFORE, WE SUSTAIN THE IMPUGNED ORDER OF THE 10 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 COMMISSIONER OF INCOME TAX (APPEALS) AND REJECT THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON THIS IS SUE. 15. THE NEXT ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN SUSTAINING THE ACTION OF THE ASSESSING OFFICER IN N OT CONSIDERING INTEREST ON DEBTORS AND CREDITORS NO LO NGER PAYABLE WRITTEN BACK AS INCOME FROM BUSINESS ALLOWA BLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT. THE ASSESS ING OFFICER WHILE COMPLETING THE ASSESSMENT AND COMPUTI NG THE DEDUCTION ALLOWABLE UNDER SECTION 10A OF THE ACT DI D NOT CONSIDER INTEREST ON DEBTORS AND CREDITORS NO LONGE R PAYABLE WRITTEN BACK AMOUNTING TO ` 84.87 LAKHS AND ` 1,23,048/- RESPECTIVELY AS INCOME FROM BUSINESS. ON APPEAL, TH E COMMISSIONER OF INCOME TAX (APPEALS) SUSTAINED THE COMPUTATION MADE BY THE ASSESSING OFFICER IN EXCLUD ING INTEREST RECEIVED ON DELAYED PAYMENTS FROM DEBTORS AND CREDITORS NO LONGER PAYABLE WRITTEN BACK HOLDING TH AT THESE RECEIPTS ARE NOT PART OF BUSINESS INCOME DIRECTLY A TTRIBUTABLE TO EXPORTS OF GOODS OUTSIDE INDIA RELYING ON THE DE CISION OF 11 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 THE HONBLE MADRAS HIGH COURT IN THE CASE OF INDIA COMNET INTERNATIONAL VS. ITO (185 TAXMAN 51). 16. COUNSEL FOR THE ASSESSEE REITERATING THE SUBMI SSIONS MADE BEFORE THE LOWER AUTHORITIES SUBMITS THAT THE INTEREST WAS COLLECTED FROM THE DEBTORS FOR DELAYED PAYMENT OF SALE PROCEEDS AND THEREFORE SUCH INTEREST WILL PARTAKE T HE CHARACTER OF SALE PROCEEDS FORMING PART OF BUSINESS INCOME . HE PLACES RELIANCE ON THE FOLLOWING DECISIONS IN SU PPORT OF HIS CONTENTIONS:- I) CIT VS. PRAKASH OILS LTD. (2011) 58 DTR (MP) 279 II) CIT VS. MADRAS MOTORS LTD. (257 ITR 60 (MAD) PLACING RELIANCE ON THE ABOVE DECISIONS, COUNSEL SU BMITS THAT INTEREST ON DEBTORS IS PART OF BUSINESS INCOME AND THEREFORE SHOULD BE CONSIDERED FOR THE PURPOSE OF COMPUTING R ELIEF UNDER SECTION 10A OF THE ACT. 17. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDERS OF THE LOWER AUTHORITIES IN NOT CONSIDERING THE INTEREST ON DEBTORS AND CREDITORS NO LONGER PAYABLE WRITTEN BACK AS INCOME FOR COMPUTING RELIEF UNDER SECTION 10A OF TH E ACT. HE 12 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 ALSO PLACES RELIANCE ON THE DECISION OF HONBLE MAD HYA PRADESH HIGH COURT IN THE CASE OF CIT VS. ALPINE SO LVEX LTD. (276 ITR 92) AND AHMEDABAD SPECIAL BENCH DECISION I N THE CASE OF NIRMA INDUSTRIES LTD. VS. ACIT (95 ITD 199) IN SUPPORT OF HIS CONTENTIONS. 18. HEARD BOTH SIDES. PERUSED ORDERS OF LOWER AUTHO RITIES AND DECISIONS RELIED ON. ON GOING THROUGH ALL THESE DECISIONS, WE FIND THAT THE JURISDICTIONAL HIGH COURT IN THE C ASE OF CIT VS. MADRAS MOTORS LTD. (SUPRA) HELD THAT INTEREST E ARNED BY THE ASSESSEE ON BELATED PAYMENTS BY ITS CUSTOMERS W AS DIRECTLY RELATABLE TO ITS BUSINESS. WHILE HOLDING SO, THE HONBLE HIGH COURT OBSERVED AS UNDER:- 3.2 LET US NOW CONSIDER THE INTEREST EARNED BY THE ASSESSEE ON THE BELATED PAYMENTS. THERE CAN BE NO DOUBT THAT THIS INTEREST WOULD HOWEVER BE DIRECTLY RELATABLE TO THE BUSINESS OF THE ASSESSEE OF FORGIN GS. IF THE PURCHASERS OF THE FORGINGS DID NOT MAKE THE PAYMEN TS OF THE FORGINGS AND THEN AGREE TO PAY THE INTEREST ON THE DELAYED PAYMENTS, THE SAID INTEREST WOULD HAVE ITS DIRECT NEXSUS WITH THE BUSINESS OF FORGINGS. THE TRUE TES T WOULD BE WHETHER SUCH INTEREST WOULD BE AVAILABLE TO THE ASSESSEE OTHERWISE ALSO. THE ANSWER TO THE QUESTION WOULD BE CERTAINLY IN NEGATIVE. THE INTEREST BEING DIRECTLY RELATABLE ONLY TO THE AMOUNTS RECEIVABLE BY THE ASE DURING THE COURSE OF ITS BUSINESS ON ACCOUNT OF THE SALE OF FORGINGS THIS INTEREST WOULD HAVE TO BE INCLUDED AS THE PROFITS AND GAINS DERIVED FROM THE BUSINESS OF THE 13 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 ASSESSEE. WE HOLD THAT THIS PART OF THE INTEREST WO ULD BE ENTITLED TO BE COVERED BY SECTION 80HH OF THE ACT. 19. THE DECISION RELIED ON BY THE COMMISSIONER OF I NCOME TAX (APPEALS) IN THE CASE OF INDIA COMNET INTERNAT IONAL VS. ITO (SUPRA) IS ON THE ISSUE OF WHETHER INTEREST REC EIVED BY THE ASSESSEE ON FOREIGN CURRENCY DEPOSIT ACCOUNT I S INCOME OF THE INDUSTRIAL UNDERTAKING OR NOT. IN THE CASE ON HAND, THE ISSUE IS WHETHER THE INTEREST RECEIVED ON DELAYED PAYMENT OF SALE PROCEEDS IS INCOME FROM BUSINESS OR NOT. THUS, THE DECISION RELIED ON BY THE COMMISSIONER OF INCOME TAX (APPEALS) HAS NO RELEVANCE TO THE ISSUE. THEREF ORE, RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF MADRAS MOTORS LTD. (SUPRA) WHICH IS DIRECTLY ON THE ISSUE, WE DIRECT THE ASSESSING OFFICER TO CONSIDER INTEREST ON DEBTO RS AS BUSINESS INCOME FOR THE PURPOSE OF COMPUTING RELIE F UNDER SECTION 10A OF THE ACT. 20. COMING TO THE AMOUNT OF CREDITORS NO LONGER PAY ABLE WRITTEN BACK, IT WAS THE SUBMISSION OF THE ASSESSEE THAT THIS AMOUNT HAS BEEN WRITTEN BACK AS CREDITORS NO LONGER PAYABLE WHICH RELATES TO PURCHASE/EXPENSES PAYABLE OF EARLI ER YEARS. 14 ITA NOS 2200, 2201, 2267 TO 2270/MDS/2013 SINCE THEY WERE NOT REQUIRED TO PAY BACK THEY WERE WRITTEN BACK THEREFORE FORMS PART OF BUSINESS INCOME. WE AR E UNABLE TO AGREE WITH THE CONTENTIONS OF THE ASSESSEE THAT THIS AMOUNT IS FORMING PART OF BUSINESS INCOME. THEREFOR E, WE SUSTAIN THE ORDER OF THE LOWER AUTHORITIES IN EXCLU DING THE SAID AMOUNT WHILE COMPUTING RELIEF UNDER SECTION 10A OF THE ACT. 21. IN THE RESULT, ALL THE FOUR APPEALS OF THE REV ENUE IN ITA NOS. 2267 TO 2270/MDS/2013 ARE DISMISSED AND THE AP PEAL OF THE ASSESSEE IN ITA NO.2200/MDS/2013 IS DISMISSED A ND THAT OF THE ASSESSEE IN ITA NO.2201/MDS/2013 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 3 1 ST DAY OF OCTOBER, 2014 AT CHENNAI. SD/- SD/- ( . ) ( & )* ) ( A.MOHAN ALANKAMONY ) ( CHALLA NAGENDR A PRASAD ) , / ACCOUNTANT MEMBER ) , / JUDICIAL MEMBER ) /CHENNAI, . /DATED 31 ST OCTOBER, 2014 SOMU 01 21 /COPY TO: 1. ASSESSEE 2. ASSESSING OFFICER 3. 3 () /CIT(A) 4. 3 /CIT 5. 1 6 /DR 6. /GF .