The ITO, Ward-5(2), Ahmedabad V. M/s. Pannamax Inforech Ltd., Ahmedabad

ITA 2441/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0989 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 23-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Additional evidence
• Section: 5(2); 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2441/AHD/2012 / ASSTT. YEAR: 2009-2010 ITO, WARD - 5(2) AHMEDABAD. VS M/S.PANAMAX INFOTECH LTD. 806, J.B. TOWER OPP: DOORDARSHAN KENDRA THALTEJ, AHMEDABAD 380059. PAN : AACCP 5862 A ! / (APPELLANT) '# ! / (RESPONDENT) REVENUE BY : SHRI DINESH SINGH, SR.DR ASSESSEE BY : SHRI TUSHAR HEMANI / DATE OF HEARING : 23/06/2016 / DATE OF PRONOUNCEMENT: 02/08/2016 $%/ O R D E R REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST TH E ORDER OF LD.CIT(A)-XI, AHMEDABAD DATED 2.8.2012 PASSED FOR T HE ASSTT.YEAR 2009-10. 2. REVENUE HAS TAKEN FIVE GROUNDS OF APPEAL, BUT IT S GRIEVANCE REVOLVES AROUND A SINGLE ISSUE WHEREBY IT HAS CHALLENGED THE ACTION OF THE LD.CIT(A) FOR GRANT OF DEDUCTION UNDER SECTION 10B OF THE INC OME TAX ACT, 1961 BY ENTERTAINING FRESH EVIDENCE IN VIOLATION TO RULE 46 A OF THE INCOME TAX RULES,1962. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE-CO MPANY AT THE RELEVANT TIME WAS ENGAGED IN THE BUSINESS OF EXPORTING COMPU TER SOFTWARE AND IT ENABLED SERVICES. IT HAS FILED ITS RETURN OF INCOM E ELECTRONICALLY ON 30.9.2009 DECLARING TOTAL INCOME AT RS.13,30,500/- AFTER CLAI MING DEDUCTION UNDER SECTION 10B OF THE INCOME TAX ACT AT RS.35,38,979/- . ITA NO.2441/AHD/2012 2 4. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THAT THE ASSESSEE HAS DECLARED TOTAL TURNOVER OF RS.9,02,67,952/-. IT HA S MADE EXPORT TURNOVER OF RS.8,82,41,126/- AND IT HAS FOREIGN EXCHANGE FLUCTU ATION GAIN OF RS.45,40,929/-. ON A DETAILED ANALYSIS OF THE RECO RD, THE LD.AO HAS DENIED THE ALLEGED DEDUCTION AND MADE AN ADDITION OF RS.35,38, 979/-. BASICALLY, THE DEDUCTION WAS TO BE CLAIMED UNDER SECTION 10A, BUT BY MISTAKE IN THE COMPUTATION OF INCOME THE ASSESSEE HAS MENTIONED SE CTION 10B. THIS MISTAKE WAS RECTIFIED BY THE ASSESSEE DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, AND IT WAS BROUGHT TO THE NOTICE OF TH E AO THAT THE DEDUCTION IS ADMISSIBLE UNDER SECTION 10A. THE ASSESSEE HAS SUB MITTED COMPLETE DETAILS IN SUPPORT OF ITS CLAIM. THE LD.AO HAS REALIZED THIS FACT AND MADE A REFERENCE IN PARA NO.4 ON PAGE NO.5 OF THE ASSESSMENT ORDER. BU T HE DID NOT AGREE WITH THE ASSESSEE WITH REGARD TO ADMISSIBILITY OF DEDUCTION EITHER UNDER SECTION 10A ALSO. 5. ON APPEAL, THE LD.CIT(A) HAS ALLOWED THE DEDUCTI ON BY OBSERVING AS UNDER: 2.2 I HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTI ONS. TAKING IN VIEW THE ENTIRETY OF FACTS, I AM INCLINED TO AGREE WITH THE CONTENTIONS OF LD.A.R. FOR THE FOLLOWING REASONS:- (A)DURING THE APPELLATE PROCEEDINGS THE APPELLANT C ONTENDED THAT IT IS ELIGIBLE TO CLAIM DEDUCTION U/S.10A OF THE IT.ACT A ND THE AUDITORS IN FORM NO.56F HAS GIVEN CERTIFICATE FOR DEDUCTION U/S .10A. IN ALL THESE SUBMISSIONS AND OTHER CORRESPONDENCES THE DEDUCTION HAS BEEN CLAIMED U/S.10A. HOWEVER, INADVERTENTLY IN THE COMP UTATION OF INCOME THE DEDUCTION HAS BEEN CLAIMED U/S.10B OF THE IT.AC T. THE APPELLANT PRAYED THAT ITS CLAIM SHOULD BE EXAMINED KEEPING IN VIEW PROVISIONS OF SEC.10A OF THE IT.ACT. IN THIS REGARD THE APPELLANT HAS REQUESTED FOR NECESSARY AMENDMENT AS PER THE PROVISIONS OF SEC.29 2B OF THE IT.ACT. SINCE THE APPELLANT IN ALL THE DOCUMENTS EXCEPT THE COMPUTATION OF INCOME HAS CLAIMED DEDUCTION U/S.10A, ACCORDINGLY, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT INTENDED TO CLAI M DEDUCTION U/S.10A AND DEDUCTION SHOULD BE ALLOWED U/S.10A ONLY. ITA NO.2441/AHD/2012 3 (B)DURING THE ASSESSMENT AS WELL AS APPELLATE PROCE EDINGS THE APPELLANT FILED COPIES OF SALE INVOICES RAISED ON B ROAD BAND TELECOM CORPORATION, USA. AS PER THESE INVOICES THE TURNOVE R OF THE APPELLANT DURING THE YEAR UNDER CONSIDERATION IS RS. 7.94 CRO RES. (C)THE APPELLANT HAS ALSO FILED COPIES OF FOREIGN R EMITTANCE INWARD CERTIFICATE(FRIC) ISSUED BY THE BANKS WHICH EVIDENC ES THE RECEIPT OF FOREIGN EXCHANGE IN INDIA AGAINST THE EXPORT TURNOV ER. (D)THE APPELLANT HAS ALSO FILED A DETAILED CHART VI DE WHICH IT HAD EXPLAINED THE RECEIPT OF FOREIGN EXCHANGE INVOICE-W ISE. (E)THE APPELLANT HAS ALSO FURNISHED COPIES OF A BAN K STATEMENT I WHEREIN THE FOREIGN EXCHANGE IS DULY CREDITED. THE FOREIGN EXCHANGE TO THE EXTENT OF RS. 7.94 CRORE IS CREDITED IN THE BANK ACCOUNTS. (F) THE APPELLANT HAS ALSO FURNISHED COPIES OF SOFT EX FORMS (SOFTWARE EXPORT DECLARATION FORMS). THESE FORMS ARE SUBMITTE D TO STPI AND THIS IS ANOTHER EVIDENCE TO PROVE THE FACT OF EXPORTS OF IT. ENABLED SERVICES. AS PER THE SOFTEX FORMS THE TOTAL TURNOVER DURING T HE YEAR UNDER CONSIDERATION IS RS. 7.94 CRORES. (G)THE APPELLANT HAS ALSO FURNISHED COPIES OF AUDIT OR CERTIFICATE IN FORM NO.56F. AS PER THIS CERTIFICATE ALSO THE EXPORT TUR NOVER HAS BEEN CERTIFIED AT RS. 7.94 CRORES. (H)THE APPELLANT HAS ALSO FURNISHED COPIES OF QUART ERLY REPORT FILED WITH STP AUTHORITIES. AS PER THESE QUARTERLY REPORT S THE EXPORT TURNOVER DURING THE YEAR UNDER CONSIDERATION IS 7.94 CRORES. (I) THE APPELLANT HAS ALSO FURNISHED COPY OF INVOIC E NO.STPIC/2009- 10/EXIM/S/PIL/381/040/3721 DATED 1/8/2009 ISSUED BY STPI GANDHINAGAR. THIS INVOICE HAS BEEN ISSUED TO COLLEC T REGULATORY CHARGES OF RS. 1,00,000/- FROM THE APPELLANT. IN TH IS INVOICE ALSO THE EXPORT TURNOVER OF THE APPELLANT FOR THE F.Y.08-09 HAS BEEN WORKED OUT AT RS. 7,94 CRORES. IN THE FACE OF OVERWHELMING EVIDENCES AS MENTIONED ABOVE I DO NOT HAVE ANY OTHER OPTION BUT TO AGREE WITH THE CONTENT IONS OF LD. A.R. THAT IT HAD EXPORTED IT. ENABLED SERVICES OF RS. 7.94 CR ORES DURING THE YEAR UNDER CONSIDERATION. THE FOREIGN EXCHANGE RECEIPT A S RESULT OF EXPORT ACTIVITY IS DULY CREDITED IN THE BANK ACCOUNT OF TH E APPELLANT. SINCE ALL THE CONDITIONS LAID DOWN U/S.10A ARE FULFILLED IN T HE CASE OF APPELLANT, ITA NO.2441/AHD/2012 4 ACCORDINGLY, THE A.O. IS DIRECTED TO ALLOW DEDUCTIO N CLAIMED U/S.10A OF RS. 35,38,979/-. THIS GROUND OF APPEAL IS ALLOWED. 6. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD CAREFULLY. A PERUSAL OF THE ASSESSMENT ORDE R WOULD REVEAL THAT BASICALLY, THE AO HAS NOT MADE ANY SERIOUS ATTEMPT TO INVESTIGATE THE ISSUE. HE POINTED OUT CERTAIN PERIPHERAL DEFECT EITHER IN THE INVOICES OR FORM OR BILL. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT VA RIOUS REMITTANCES HAVE BEEN RECEIVED IN THE ACCOUNTS OF THE ASSESSEE. THE ASSE SSEE HAS SUBMITTED DETAILS AS NOTICED BY THE LD.CIT(A) IN THE FINDING EXTRACTED S UPRA. COPIES OF ALL THESE DOCUMENTS ARE AVAILABLE IN THE PAPER BOOK. I HAVE PERUSED PAGE NO.105 WHEREIN INVOICE FOR REGULATORY CHARGES UNDER STPI C LAIM RAISED BY THE SOFTWARE TECHNOLOGY PARK OF INDIA HAS BEEN PLACED O N THE RECORD. THESE DOCUMENTS CONTAIN THE DETAILS REGARDING EXPORT TURN OVER INVOICES OF THE ASSESSEE. VIDE THESE INVOICES, SOFTWARE TECHNOLOGY PARK RAISED A DEMAND OF RS.1,00,000/-. THE ASSESSEE HAS ALSO SUBMITTED OTH ER DETAILS ALONG WITH THESE INVOICES. THE AO HAS NOT MADE INVESTIGATION WITH T HE ULTIMATE CLIENTS OF THE ASSESSEE WHO HAVE AVAILED THIS IT ENABLED SERVICES. IF THE AO HAS ANY DOUBT OVER THE ACTIVITIES OF THE ASSESSEE, THEN, BEST COU RSE WOULD BE TO FIND OUT WHAT TYPE OF SERVICES ASSESSEE WAS RENDERING. ONCE IT H AS ALLEGED THAT THE UNIT REGISTERED WITH STPL AUTHORITIES, AND IT HAS SUBMIT TED EVIDENCES, THEN INQUIRY SHOULD HAVE BEEN MADE FROM STPI AUTHORITIES IN ORDE R TO FIND OUT THE ASSESSEE HAS GENUINELY BE REGISTERED WITH IT, OR IT HAS BEEN CARRYING OUT THE ACTIVITIES AS ALLEGED BY IT, IN ITS CLAIM FOR DEDUCTION. NO SUCH STEPS WERE TAKEN. HE SIMPLY DISBELIEVED THIS FORM OR THAT FORM. IT IS MERELY F OR SAKE OF DISALLOWANCE. AS FAR AS ALLEGATION OF THE REVENUE THAT SOME ADDITION AL EVIDENCE HAS BEEN GIVEN BY THE ASSESSEE BEFORE THE LD.CIT(A) WHICH HAS BEEN ENTERTAINED IN VIOLATION OF RULE 46A IS CONCERNED, I HAVE PERUSED THE WRITTE N SUBMISSION FILED BY THE ASSESSEE BEFORE THE LD.CIT(A). NO WHERE THE ASSES SEE HAS PRAYED FOR ADMISSION OF ADDITIONAL EVIDENCE, RATHER IT HAS EMP HASIZED THAT THESE ITA NO.2441/AHD/2012 5 DOCUMENTS WERE GIVEN TO THE AO. THEREFORE THERE IS NO MERIT IN THIS ALLEGATION OF THE AO. I DO NOT FIND ANY MERIT IN T HE APPEAL OF THE REVENUE. IT IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE COURT ON 2 ND AUGUST, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER