ITO, Ward-2(4), Hyderabad, Hyderabad V. Trendy Works Technologies Pvt.Ltd, Hyderabad, Hyderabad

ITA 258/HYD/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2491 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2017
• Court: TRIBUNAL
• Department Lawyers: V SREEKAR
• Assessee Lawyers: M CHANDRAMOULESWARA RAO

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA.NO.258/HYD/2017 ASSESSMENT YEAR 2008-2009 INCOME TAX OFFICER, WARD-2(4), ROOM NO.509, 5 TH FLOOR, SIGNATURE TOWERS, OPP. BOTANICAL GARDEN, KONDAPUR, HYDERABAD- 500084. VS. M/S. TRENDY WORKS TECHNOLOGIES PVT LTD., NSL, SEZ, ARENA 3 RD FLOOR, BLOCK-1, NO.6, SURVEY NO.1, IDA, UPPAL, HYDERABAD 500039. (APPELLANT) (RESPONDENT) FOR ASSESSEE: SHRI M. CHANDRAMOULESWARA RAO FOR REVENUE : SHRI V. SREEKAR, DR DATE OF HEARING : 30.05.2017 DATE OF PRONOUNCEMENT : 30.05.2017 ORDER PER S. RIFAUR RAHMAN, AM. THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER OF THE CIT(A)-2, HYDERABAD AND IT PERTAINS TO THE ASSESSMENT YEAR 2008-2009. 2. THE ONLY GROUND RAISED BEFORE US READS AS UNDER: - IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETHE R THE CIT(A) IS CORRECT IN LAW IN CONSIDERING THE EXPENDITURE INCURRED IN FOREIGN EXC HANGE TO BE DEDUCTED FROM BOTH EXPORT TURNOVER AND TOTAL TURNOVER, WHEN THE EXPLAN ATION-2 TO SECTION 10A OF THE IT ACT EXPLICITLY STATES THAT SUCH EXPENDITURE BE EXCLUDED ONLY FROM EXPORT TURNOVER AND NO SUCH PROVISION IS AVAILABLE FOR TOTAL TURNOVER. 3. BRIEF FACTS NECESSARY FOR THE DISPOSAL OF THE AP PEAL ARE STATED AS UNDER. ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DEVE LOPMENT AND SALE OF SOFTWARE 2 PRODUCTS. FOR THE YEAR UNDER CONSIDERATION, IT CLA IMED EXEMPTION U/S 10A OF THE ACT AS THE UNIT IS A STPI REGISTERED 100% EOU. DURING THE SCRUTINY PROCEEDINGS, THE AO DEDUCTED THE INTERNET EXPENSES, EXCHANGE LOSS, ADVE RTISEMENT AND HOSTING CHARGES AND FOREIGN TRAVEL EXPENSES FROM THE EXPORT TURNOVER BY STATING THAT THE PROVISIONS OF SECTION 10A OF THE ACT DO NOT INCLUDE THE REFERRED EXPENDITURE IN THE EXPORT TURNOVER. ACCORDING TO THE ASSESSEE, THE AO HAS WRONGLY DEDUC TED THESE EXPENSES FROM THE EXPORT TURNOVER IGNORING THE FACT THAT THESE ARE RE IMBURSEMENTS FROM THE CUSTOMERS. 4. ON AN APPEAL FILED BY THE ASSESSSEE, CIT (A) OBS ERVED THAT WHENEVER THERE IS A REDUCTION OF SUCH EXPENDITURE FROM THE EXPORT TURNO VER, THE SAME HAS TO BE REDUCED FROM THE TOTAL TURNOVER ALSO FOR THE PURPOSE OF COM PUTATION OF DEDUCTION U/S 10A OF THE ACT. IN THIS REGARD, CIT (A) RELIED UPON THE DECIS ION OF THE ITAT B BENCH, HYDERABAD IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-2011, WHEREIN SIMILAR CONTENTION OF THE ASSESSEE WAS ACCEPTED BY THE BENC H. NO CONTRARY DECISION WAS PLACED FROM THE RECORD OF THE LD DR. 5. SINCE THE VIEW TAKEN BY THE CIT (A) IS IN CONSIS TENT WITH THAT OF THE ITATS DECISION (SUPRA), WE DO NOT FIND ANY INFIRMITY IN T HE SAID ORDER. ACCORDINGLY, AS PRONOUNCED IN THE OPEN COURT, THE APPEAL FILED BY T HE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MAY,2017. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN) VICE PRESIDENT ACCOUNTANT MEMBER HYDERABAD, DATED: 30 TH MAY, 2017 OKK, SR.PS COPY TO 3 1. M/S. TRENDY WORKS TECHNOLOGIES PVT LTD., NSL, SEZ, ARENA 3 RD FLOOR, BLOCK-1, NO.6, SURVEY NO.1, IDA, UPPAL, HYDERABAD 500039. 2. INCOME TAX OFFICER, WARD-2(4), HYDERABAD-500084. 3. CIT(A)-2, HYDERABAD. 4. PR. CIT-2, HYDERABAD. 5. D.R. ITAT A BENCH, HYDERABAD. 6. GUARD FILE