ITO, CHENNAI V. Tech Affinity Global Pvt. Ltd., CHENNAI

ITA 423/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77242 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 18-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P JACOB IRS
• Section: 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , , ! ' BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NO.423/MDS/2014 ( / ASSESSMENT YEAR : 2009 -2010) THE INCOME TAX OFFICER, COMPANY WARD-III(1) CHENNAI -600 034 . ( # /APPELLANT) VS M/S. TECH AFFINITY GLOBAL PVT. LTD, SP INFOCITY, 40, MGR SALAI, BLOCK A, 8 TH FLOOR, MODULE 4B, KANDANCHAVADI, CHENNAI 600 096. [PAN :AACCT4550G] ( $% # /RESPONDENT) / APPELLANT BY : SHRI. P. JACOB, IRS, ADDL. CIT. / RESPONDENT BY : NONE /DATE OF HEARING : 16.04.2014 ! /DATE OF PRONOUNCEMENT : 09.05.2014 & / O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-III, CHENNAI, DATED 11.10.2013 RELEVANT TO THE ASSESSMENT YEAR 2009-2010. I.T.A.NO.423 /MDS/2014 . :- 2 -: 2. THE ONLY ISSUE RAISED IN THE APPEAL BY THE REVEN UE IS RECOMPUTATION OF DEDUCTION U/S. 10A BY EXCLUDING TH E EXPENSES INCURRED IN FOREIGN EXCHANGE BOTH FROM EXPORT TURNO VER AND TOTAL TURNOVER. 3. THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORP ORATED UNDER THE PROVISION OF THE COMPANIES ACT, 1956 AND IS ENG AGED IN THE BUSINESS OF INFORMATION TECHNOLOGY SUPPORT SERVICES , DEVELOPMENT AND SUPPORT SERVICES FOR MAINFRAMES ETC. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009-10 ON 24.09.200 9 DECLARING INCOME OF B4,55,715/-. IN THE RETURN OF INCOME, TH E ASSESSEE CLAIMED DEDUCTION U/S.10A TO THE TUNE OF B1,36,46,082/-. N OTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 25.08.2010. DURING T HE COURSE OF SCRUTINY ASSESSMENT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD INCURRED CERTAIN EXPENSES IN FOREIGN CURRENCY AND HENCE EXCLUDED THE SAME FROM EXPORT TURNOVER ALONE. THE DETAILS O F THE EXPENDITURE INCURRED BY THE ASSESSEE IN FOREIGN CURRENCY ARE AS UNDER: 01. IT CO-ORDINATION CHARGES : 3,23,48,305/- 02. TRAVEL EXPENSES : 1,62,840/- 03. ONSITE TRAINING EXPENSES : 11,31,794/- ---------------------- TOTAL : 3,36,42,939/- ---------------------- I.T.A.NO.423 /MDS/2014 . :- 3 -: AGGRIEVED, AGAINST THE ASSESSMENT ORDER DATED 31.03 .2009, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONE R OF INCOME TAX (APPEAL). IN APPEAL THE COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE ASSESSING OFFICER TO DELETE THE EXPENDITURE OF B3,36,42,939/- FROM TOTAL TURNOVER FOR THE PURPOSE OF CALCULATION OF RE LIEF U/S. 10A. THE COMMISSIONER OF INCOME TAX (APPEALS) HELD THAT THE ISSUE IS COVERED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUN AL IN THE CASE OF ITO VS. SAK SOFT LTD REPORTED AS (2009) 313 ITR 353 WHEREIN IT HAS BEEN HELD THAT WHATEVER IS TO BE EXCLUDED FROM EXPORT T URNOVER SHOULD ALSO BE EXCLUDED FROM TOTAL TURNOVER FOR THE PURPOSE OF SECTIONS 10A AND 10B OF THE ACT. NOT SATISFIED WITH THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 4. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESP ITE SERVICE OF NOTICE. WE HAVE HEARD THE SUBMISSIONS OF THE LD. D R AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FI ND THAT THE ISSUE IN APPEAL IS SQUARELY COVERED BY THE DECISION OF THE S PECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SAK SOFT LTD (SUPRA ). THE COMMISSIONER I.T.A.NO.423 /MDS/2014 . :- 4 -: OF INCOME TAX (APPEALS) HAS RIGHTLY DIRECTED THE AS SESSING OFFICER TO REDUCE THE EXPENDITURE INCURRED IN FOREIGN EXCHANGE FROM TOTAL TURNOVER AS WELL FOR THE PURPOSE OF CALCULATION O F DEDUCTION U/S. 10A OF THE ACT. THERE IS NO INFIRMITY IN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 9TH OF M AY, 2014, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( ) (VIKAS AWASTHY) ! / JUDICIAL MEMBER '# /CHENNAI $% /DATED:09.05.2014. K.V %& '( )( /COPY TO: 1. * APPELLANT 2. / RESPONDENT 3. + ( )/CIT(A) 4. + /CIT 5. (,- . /DR 6. -/ 0 /GF.