DCIT, CHENNAI V. Lister Technologies Private Ltd., CHENNAI

ITA 3311/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7428 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 07-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: S SENDAMARAI KANNAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , !.. # $%, ' () BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NOS.3311, 3312, 3313, 3314 & 3315/MDS/2016 + ,+ / ASSESSMENT YEARS : 2005-06 TO 2008-09 & 2010-11 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 4(1), CHENNAI - 600 034. V. M/S LISTER TECHNOLOGIES PVT. LTD., NO.232, V.M. STREET, MYLAPORE, CHENNAI - 600 004. PAN : AAACL 6079 R (.// APPELLANT) (01.// RESPONDENT) ./ 2 3 / APPELLANT BY : SHRI SUPRIYO PAL, JCIT 01./ 2 3 / RESPONDENT BY : SHRI S. SENDAMARAI KANNAN, ADV OCATE # 2 4' / DATE OF HEARING : 22.02.2017 56, 2 4' / DATE OF PRONOUNCEMENT : 23.03.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE APPEALS OF THE REVENUE ARE DIRECTED AGAI NST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME T AX (APPEALS) 8, CHENNAI DATED 26.09.2016, FOR THE AS SESSMENT YEARS 2005-06 TO 2008-09 AND 2010-11. SINCE COMMON ISSUE S ARISE FOR CONSIDERATION IN ALL THESE APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2 I.T.A. NOS.3311 TO 3315/MDS/16 2. THERE WAS A DELAY OF 3 DAYS IN FILING EACH OF TH ESE APPEALS BY THE REVENUE. THE REVENUE HAS FILED PETITIONS FO R CONDONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE AND THE LD.COUNSEL FOR THE ASSESSEE. WE FIND THAT THER E WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEALS BEFORE THE STIPULA TED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEA LS. 3. THE FIRST ISSUE ARISES FOR CONSIDERATION IS DEDU CTION CLAIMED BY THE ASSESSEE UNDER SECTION 10A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 4. SHRI SUPRIYO PAL, THE LD. DEPARTMENTAL REPRESENT ATIVE, SUBMITTED THAT THE CBDT IN ITS CIRCULAR DATED 16.07 .2013 INSTRUCTED ITS OFFICERS TO ALLOW DEDUCTION UNDER SECTION 10A O F THE ACT ONLY AFTER SETTING OFF LOSSES AS PER PROVISIONS OF SECTION 70 AND 71 OF THE ACT. AFTER SETTING OFF LOSSES UNDER SECTION 70 AND 71 OF THE ACT, IF THE RESULTANT FIGURE IS LOSS FROM THE ELIGIBLE UNIT, IT SHALL BE ELIGIBLE TO CARRY FORWARD AND SET OFF IN ACCORDANCE WITH THE PR OVISIONS OF SECTION 72 OF THE ACT. IN THE CASE BEFORE US, ACCO RDING TO THE LD. D.R., THE A.O. FOUND THAT THE BROUGHT FORWARD LOSSE S ARE MORE THAN PROFITS OF ELIGIBLE BUSINESS, THEREFORE, THE ASSESS EE IS NOT ELIGIBLE FOR 3 I.T.A. NOS.3311 TO 3315/MDS/16 DEDUCTION UNDER SECTION 10A OF THE ACT. THE LD. D. R. VERY FAIRLY SUBMITTED THAT THE APEX COURT RECENTLY IN CIT & ANO THER V. M/S YOKOGAWA INDIA LTD. IN CIVIL APPEAL NO.8498 OF 2013 DATED 16 TH DECEMBER, 2016, EXAMINED AN IDENTICAL ISSUE AND FOU ND THAT THE DEDUCTION UNDER SECTION 10A OF THE ACT WOULD BE PRI OR TO THE COMMENCEMENT OF EXERCISE TO BE UNDERTAKEN UNDER CHA PTER-VI OF THE ACT FOR ARRIVING AT TOTAL INCOME OF THE ASSESSE E FROM GROSS TOTAL INCOME. IN VIEW OF THIS JUDGMENT OF APEX COURT, TH E LD. D.R. VERY FAIRLY SUBMITTED THAT THE ISSUE RAISED BY THE REVEN UE IS COVERED IN FAVOUR OF ASSESSEE. 5. SHRI SUPRIYO PAL, THE LD. DEPARTMENTAL REPRESENT ATIVE FURTHER SUBMITTED THAT FOR THE ASSESSMENT YEAR 2007 -08, THE ASSESSEE HAS ALSO RAISED ONE MORE ISSUE WITH REGARD TO ELIGIBILITY OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 10A OF THE ACT IN RESPECT OF FOREIGN EXCHANGE GAIN. 6. WE HAVE HEARD SHRI S. SENDAMARAI KANNAN, THE LD. COUNSEL FOR THE ASSESSEE ALSO. AS RIGHTLY SUBMITTED BY THE LD. DEPARTMENTAL REPRESENTATIVE, THE APEX COURT HAS HELD THAT THE DE DUCTION UNDER SECTION 10A OF THE ACT WOULD BE PRIOR TO THE COMMEN CEMENT OF EXERCISE TO BE UNDERTAKEN UNDER CHAPTER VI OF THE ACT, THEREFORE, 4 I.T.A. NOS.3311 TO 3315/MDS/16 THE LOSS BROUGHT FORWARD FROM THE EARLIER YEAR CANN OT BE SET OFF. IN VIEW OF THIS JUDGMENT OF APEX COURT IN YOKOGAWA IND IA LTD. (SUPRA), THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE LOSS SUFFERED BY THE ASSESSE E CANNOT BE SET OFF BEFORE ALLOWING DEDUCTION UNDER SECTION 10A OF THE ACT. 7. FOR THE ASSESSMENT YEAR 2007-08, THE ASSESSEE CL AIMED DEDUCTION UNDER SECTION 10A OF THE ACT IN RESPECT O F FOREIGN EXCHANGE GAIN TO THE EXTENT OF ` 4,28,767/-. FOREIGN EXCHANGE GAIN ADMITTEDLY RELATED TO THE EXPORT BUSINESS OF THE AS SESSEE AND ITS SALE CONSIDERATION WAS REALIZED BY VIRTUE OF EXPORT MADE BY THE ASSESSEE. THEREFORE, THIS TRIBUNAL IS OF THE CONSI DERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY FOUND THAT THE ASSESSE E IS ELIGIBLE FOR BENEFIT UNDER SECTION 10A OF THE ACT IN RESPECT OF SUCH FOREIGN EXCHANGE GAIN DUE TO FLUCTUATION. 8. IN VIEW OF THE ABOVE DISCUSSION, THIS TRIBUNAL D O NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 9. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE DISMISSED. 5 I.T.A. NOS.3311 TO 3315/MDS/16 ORDER PRONOUNCED ON 23 RD MARCH, 2017 AT CHENNAI. SD/- SD/- ( ! . . # $% ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 8 /DATED, THE 23 RD MARCH, 2017. KRI. 2 04$9 :9,4 /COPY TO: 1. ./ /APPELLANT 2. 01./ /RESPONDENT 3. # ;4 () /CIT(A)-8, CHENNAI 4. PRINCIPAL CIT, CHENNAI-4, CHENNAI 5. 9< 04 /DR 6. !+ = /GF.