ACIT CEN CIR 34, MUMBAI V. NESS TECHNOLOGIES INDIA P. LTD, MUMBAI

ITA 4086/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49241 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JI TENDRA YADAV
• Assessee Lawyers: HETAL MEHTA
• Section: 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI H BENCH BEFORE SHRI N.VASUDEVAN, JUDICIAL MEMBER & SHRI T.R.SOOD, ACCOUNTANT MEMBER I.T.A.NO.4086/MUM/2010 A.Y 2006-07 ASST. COMMISSIONER OF I.T., CENTRAL CIRCLE 34, MUMBAI. VS. M/S NESS TECHNOLOGIES (INDIA) PVT. LTD., OFFICE NO.201, 2 ND FLOOR, PARADIGM A, BUILDING NO.12, MINDSPACE, MALAD (W), MUMBAI 400 064. PAN: AAACA 9649 L (APPELLANT) (RESPONDENT) REVENUE BY : SHRI JITENDRA YADAV. ASSESSEE BY : SHRI HETAL MEHTA. O R D E R PER T.R.SOOD, AM: IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWIN G GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE EX PENSES [COMMUNICATION CHARGES AND EXPENSES INCURRED IN FOR EIGN CURRENCY FOR TRAVELING] SHOULD BE REDUCED FROM THE TOTAL TURNOVER AS WELL AS FROM THE EXPORT TURNOVER FOR AP PLYING THE PROVISIONS OF SECTION 10A OF THE I.T.ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND LAW, THE LD. CIT(A) WAS NOT JUSTIFIED IN NOT APPRECIATING TH E FACT THAT THE AO HAS RIGHTLY APPLIED THE PROVISIONS OF SECTION 10 A OF THE I.T.ACT, WHEREIN THE EXPORT TURNOVER IS CLEARLY D EFINED IN SECTION 10[9] EXPLANATION (II) AND WHEREAS THE TOT AL TURNOVER IS NOT DEFINED, THEREFORE IT WOULD BE IN GENERAL TE RMS [INCLUDES ALL RECEIPTS] AS TREATED BY THE AO. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THAT ASS ESSEE IS ENGAGED IN THE BUSINESS OF SOFTWARE BUSINESS ON WHICH DEDUC TION U/S.10A WAS CLAIMED. WHILE CALCULATION THE DEDUCTION, AO DID NO T EXCLUDE COMMUNICATION CHARGES AND EXPENSES INCURRED IN FORE IGN CURRENCY FOR ITA NO.4086/M/10 2 TRAVELING FROM TOTAL TURNOVER, WHEREAS THE SAID AMO UNTS WERE REDUCED FROM THE EXPORT TURNOVER. 3. THE LD. CIT(A) HELD THAT THE EXPENSES INCURRED I N FOREIGN CURRENCY HAS TO BE EXCLUDED FROM TOTAL TURNOVER ALS O BY FOLLOWING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN TH E CASE OF ITO VS. M/S SAK SOFT LTD. 121 TTJ {CHENNAI} (S.B) 865. 4. BEFORE US, LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT IN ASSESSEES OWN CASE FOR A.Y 2005-06 IN I.T.A.NO.451 0/M/09 THIS ISSUE WAS DECIDED AGAINST THE REVENUE. 5. ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF THE AO. 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIND THAT IN THE EARLIER YEAR 2005-06 THIS ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE SPECI AL BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. M/S SAK SOFT LTD. [ SUPRA]. THEREFORE, FOLLOWING THIS YEAR FOR THIS YEAR ALSO WE DECIDE TH E ISSUE AGAINST THE REVENUE. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 30/6/2011. SD/- SD/- (N.VASUDEVAN) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 30/6/2011. P/-* ITA NO.4086/M/10 3