DCIT, CHENNAI V. Extreme Networks India Pvt. Ltd., CHENNAI

ITA 434/CHNY/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4940 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 29-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 02-03-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Transfer pricing; Rectification of order; International transaction; Question of law
• Section: 43B; 154

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , !' . #$#% , & '' ( [BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ] ./I.T.A .NO.434/MDS/2015 / ASSESSMENT YEAR : 2010-2011 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1) CHENNAI. VS. M/S. EXTREME NETWORKS INDIA PVT. LTD, 8 TH FLOOR, TEMPLE STEPS, NO.184-187, ANNA SALAI, CHENNAI 600 015. ./I.T.A .NO.449/MDS/2015 / ASSESSMENT YEAR : 2010-2011 M/S. EXTREME NETWORKS INDIA PVT. LTD, 8 TH FLOOR, TEMPLE STEPS, NO.184-187, ANNA SALAI, CHENNAI 600 015. VS. DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1) CHENNAI [PAN AABCE 3956F ] ( )* / APPELLANT) ( +,)* /RESPONDENT) DEPARTMENT BY : SHRI. PATHLAVATH PEERYA, CIT. ASSESSEE BY : SHRI. T.N. SEETHARAMAN, ADV. /DATE OF HEARING : 29-03-2017 /DATE OF PRONOUNCEMENT : 07-04-2017 / O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER THESE ARE APPEALS FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY DIRECTED AGAINST AN ORDER DATED 31.12. 2014 OF DEPUTY ITA NO.434 & 449/MDS/2015 :- 2 -: COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(1), CHENNAI PURSUANT TO DIRECTIONS OF LD. DISPUTE RESOLUTION PANEL (IN S HORT THE DRP) U/S.144C (13) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. GROUNDS TAKEN BY THE ASSESSEE READ AS UNDER:- 1. THE ORDER OF THE ASSESSING OFFICER (AO) 1 TRANSFER PRICING OFFICER (TPO) / DRP IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE AO ERRED IN ADDING A TOTAL SUM OF RS.1,79,74,941/- UNDER 'PROFITS FROM MARKETING SERVICES'; THE ADDITION MADE PURSUANT TO THE DIRECTIONS OF THE DRP IS INCORRECT AND UNSUSTAINABLE. 3. THE TPO/ DRP/ AO ERRED IN NOT ACCEPTING THE OBJECTIONS RAISED TO THE TRANSFER PRICING ADJUSTMEN T IN FORM NO.35A (U/S 144C(2)(B)) FILED ON 04.04.2014 AND THE FURTHER WRITTEN SUBMISSIONS DATED 17.09.2014 AND SUSTAINING 1 ENHANCING THE ADJUSTMENT AND ADDING RS.1 ,74,00,000/- TO THE APPELLANT'S TOTAL INCOME. 4. THE TPO/ DRP ERRED IN EXCLUDING AKSHAY SOFTWARE FROM THE COMPARABLES TOGETHER WITH FCS SOFTWARE SOLUTIONS; REMOVAL OF FCS SOFTWARE WAS SOUGHT ON THE GROUND OF FUNCTIONAL AND OPERATIONAL DIFFERENCE S, A GROUND NOT CONSIDERED IN THE DRP PROCEEDINGS AND AKSHAY SOFTWARE, WAS ALSO EXCLUDED IN THE SET OF COM PARABLES, BY ADOPTING A OFF-SHORE SERVICE PROVIDER FILTER. IT IS SUBMITTED THAT IF AKSHAY SOF TWARE IS INCLUDED IN THE SET OF COMPARABLES, THE AVERAGE OPERATING MARGIN WOULD BE 20.87% AND NO ADJUSTMENT TO THE TRANSACTION PRICE WILL BE NEEDED. 5. WITHOUT PREJUDICE TO THE FOREGOING, THE TPO 1 DRP ERRED IN APPLYING '75% OR MORE OF OFF - SHORE SERVICE PROVIDER' TO SELECTED COM PARABLES WITHOUT CONSIDERING THE SAME FOR OTHER COMPARABLES VIZ., RS SOFTWARE AND TAKSHEEL SOLUTIONS. 6. WITHOUT PREJUDICE TO THE AFORESAID CONTENTIONS, AND ASSUMING WITHOUT ADMITTING THAT ANY ADJUSTMENT IS JUSTIFIED, THE APPELLANT SUBMITS THAT IN GIVING EFF ECT TO THE DRP DIRECTIONS U/S 144C(5) DATED 30.12.2014 ITA NO.434 & 449/MDS/2015 :- 3 -: THE TPO HAS INADVERTENTLY CONSIDERED THE OPERATING MARGIN OF A COMPARABLE COMPANY, KALS INFORMATION SYSTEM LTD AT 36.25% AS AGAINST THE CORRECT OPERATING MARGIN OF 21.11 %, WHICH WAS ADOPTED BY THE TPO IN THE REMAND REPORT DATED 18.11.2014 SUBMITTED TO THE DRP; CONSIDERING THE CORRECT OPERATING MARGIN OF 21.11 %, THE REVISED AVERAGE OPERATING MARGIN OF THE COMPARABLE COMPANIES WILL BE 24.01 % AND THE REVISED UPWARD ADJUSTMENT WILL BE 1.32 CRORES - AS INDICATED IN TH E PETITION FOR RECTIFICATION U/S 154 DATED 27.01.2015 MADE BY THE APPELLANT TO THE AO. 7. THE APPELLANT SUBMITS AND URGES THAT, ON THE FACTS AND CIRCUMSTANCES OF ITS CASE, THE TRANSFER PRICIN G ADJUSTMENT IS UNCALLED FOR AND DESERVES TO BE DELETED. 8. THE AO ERRED IN ADDING EMPLOYEES' CONTRIBUTION TO PF OF RS.5,74,941/- INVOKING SECTION 2(24)(X) R.W.S 36(1 )(VA) OF THE ACT. 9. THE AO I DRP FAILED TO SEE THAT THE SAID AMOUNT HAD BEEN PAID BEFORE THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE PRESENT YEAR AND QUALIFIES FOR ALLOWANCE I DEDUCTION DURING THIS YEAR. 10. THE AO I DRP FURTHER FAILED TO SEE THAT THE APEX COURT HAD AFFIRMED THE DECISION OF THE KARNATAKA HIGH COURT IN CIT VS. SABARI ENTERPRISES [(2008) 29 8 ITR 141 (KARN)] WHICH DEALS WITH THE ALLOWABILITY O F EMPLOYEES' CONTRIBUTION TO PROVIDENT FUND I ESI PAID WITHIN THE DUE DATE FOR FILING RETURN DECIDING THE ISSUE IN ASSESSEE'S FAVOUR. 11. THE APPELLANT SUBMITS THAT, IN ADDITION TO THE DECISIONS CITED BY THE APPELLANT BEFORE THE DRP AND NOTED IN PARA 8.2.1 OF THE DRP'S DIRECTIONS, THE FOLLOWING OTHER JUDICIAL DECISIONS ALSO SUPPORT THE APPELLANT'S CLAIM FOR DEDUCTION OF THE EMPLOYEES' CONTRIBUTION TO PF I) CIT VS. VINAY CEMENTS LTD [(2009) 313 ITR (ST) 1 (SC)] II)COMMISSIONER OF INCOME-TAX V. AIMIL LTD. [(2010) 321 ITR 508 (DELHI)] III) CIT VS. LAKHANI RUBBER WORKS [(2010) 326 ITR 4 25 (P & H)] IV) DCIT VS. EASTERN MEDIKIT LTD [(2012) 18 ITR (TR IB) ITA NO.434 & 449/MDS/2015 :- 4 -: 457 (DELHI)] V) CIT, CIRCLE I, KOLKATA VS. MIS VIJAY SHREE LIMITED 12. THE APPELLANT SUBMITS THAT THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN CIT VS. GUJARAT STATE ROAD TRANSPORT CORPORATION [(2014) 366 ITR 117 (GUJ )] RELIED ON BY THE AO I DRP HAS BEEN DISSENTED FROM IN ESSAE TERAOKA P LTD VS. DCIT [(2014) 366 ITR 408 (KARN)]; THE APPELLANT RELIES ON THE REASONING AND CONCLUSION IN THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT AND SUBMITS THAT THE ADDITION OF RS.5,74,941/- IS WHOLLY UNJUSTIFIED. 13. THE APPELLANT URGES THAT ITS CASE IS SQUARELY COVER ED BY THE DECISION OF THE SUPREME COURT IN ALOM EXTRUSIONS LTD AND OTHER JUDICIAL DECISIONS CITED I N GROUND NO.11 ABOVE AND THE SUM OF RS.5,74,941/- REPRESENTING EMPLOYEES' CONTRIBUTION TO PF IS ALLOW ABLE. 14. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, IT IS SUBMITTED THAT THE SUM OF 5,74,941/- INCLUDES 5,30,076/- PERTAINING TO THE ELIGIBLE UNIT U/S.10A AND THE BALANCE EMPLOYEES CONTRIBUTION TO PF FOR THE INELIGIBLE UNIT IS 44,865/- ONLY. HENCE, THE DISALLOWANCE OF 5,74,941/- IS IN ANY EVENT, EXCESSIVE. 15. THE APPELLANT CRAVES LEAVE TO REFER TO THE CORRESPONDENCE WITH THE TPO AND DETAILED OBJECTIONS RAISED BEFORE DRP AND ARGUE TO THE APPEAL AT THE TI ME OF HEARING. 16. THE ASSESSING OFFICER ERRED IN LEVYING INTEREST U/S.234B/ 234D. THE LEVY OF INTEREST IS NOT ACCOR DING TO LAW AND THE INTEREST LEVIED IS, IN ANY CASE, EXCESS IVE 17. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING THE APPELLANT PRAYS THAT THE HONBLE TRIBUNAL BE PLEASED TO ALLOW THE APPEAL AND RENDER JUSTICE. 3. AS AGAINST THIS GROUNDS TAKEN BY THE REVENUE READ A S UNDER:- 1 . THE ORDER OF THE LEARNED DISPUTE RESOLUTION PANEL I S CONTRARY TO THE LAW AND FACTS OF THE CASE. ITA NO.434 & 449/MDS/2015 :- 5 -: 2.1. THE ID. DRP ERRED IN EXCLUDING M/S.FCS SOFTWA RE SOLUTIONS LIMITED FROM THE SET OF UNCONTROLLED COMP ARABLES AS THE ECS DOES NOT QUALIFY THE FILTER NAMED ONSITE REVE NUE FILTER MORE THAN 75% ARE REJECTED'. 2.2. THE ID. DRP OUGHT TO HAVE APPRECIATED THAT TH E FCS HAS ONLY 48.94$ OF ONSITE REVENUE TO THE TOTAL REVENUE AND NOT 75% AS DECIDED BY THE HON'BLE PANEL. 2.3. THE ID. DRP ERRED IN GIVING THE DIRECTION BY CONSIDERING THAT MIS. FCS . SOFTWARE SOLUTIONS LTD., IS ENGAGED IN IT CONSULTING, EDUCATIONAL AND INFRASTRUCTURE MANAGEME NT BASED ON THE FACTS GIVEN IN THE CONSOLIDATED FINANCIAL AND N OT ON THE BASIS OF STANDALONE FINANCIALS OF MIS. FCS SOFTWARE SOLUT IONS. LTD. 2.4. THE ID. DRP OUGHT TO HAVE CONSIDERED THE NATUR E OF SERVICES RENDERED BY THE ASSESSEE COMPANY WHICH ARE SYSTEM S OFTWARE DEVELOPMENT, SYSTEM SOFTWARE CONVERSION, DESIGN AND IMPLEMENTATION OF MANAGEMENT INFORMATION SYSTEM AND DECISION SUPPORT SYSTEM, FINANCIAL CONTROL AND ACCOUNTING SY STEM, PRODUCTION MANAGEMENT AND INVENTORY CONTROL, PROJEC T FEASIBILITY STUDIES AND PROJECT MONITORING SYSTEMS, MICROPROCESSOR BASED SOFTWARE, COMMUNICATI ON SOFTWARE, COMPUTER AIDED DESIGN (CAD), COMPUTER AID ED MANUFACTURING (CAM), CIM AND FEA, EXPORT SYSTEM, BA CK OFFICE, REMOTE DATA ENTRY AND APPLICATION RE-ENGINEERING AR E SIMILAR TO THE SERVICES RENDERED BY MIS. FCS SOFTWARE SOLUTIO NS LTD. 2.5. THE ID. DRP FAILED TO CONSIDER THE DECISION OF THE HON'BLE ITAT IN THE CASE OF M/S NAVISITE INDIA PVT. LTD., I N WHICH THE HON'BLE ITAT UPHELD THAT MIS. FCS SOFTWARE SOLUTION S LTD., SHOULD BE CONSIDERED AS COMPARABLE COMPANY AND FACT S OF THE CASE IS SAME. 2.6. THE ID. DRP, ERRED IN DIRECTING THE TPO TO CON SIDER THE INTEREST EXPENDITURE OF 42,00,000/- AS OPERATING COST IN THE CASE OF M/S. TAKSHEEL SOLUTIONS LIMITED. 3.1. THE ID. DRP ERRED IN EXCLUDING THE FOREIGN EXC HANGE LOSS BOTH FROM THE EXPORT TURNOVER AND ALSO FROM THE TOTAL TU RNOVER . 3.2 THE ID. DRP OUGHT TO HAVE CONSIDERED THAT ISSUE OF EXCLUSION OF FOREIGN EXCHANGE FORM EXPORT TURNOVER HAS BEEN DECI DED IN FAVOUR OF REVENUE BY THE JURISDICTIONAL ITAT IN THE CASE O F FINANCIAL SOFTWARE AND SYSTEMS P. LTD. IN ITA NO.2199/MDS/201 2 DECIDED IN JUNE 2014. 4.FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED DISPUTE RESOLUTION PANEL BE SET ASIDE AND THAT OF THE TRAN SFER PRICING ITA NO.434 & 449/MDS/2015 :- 6 -: OFFICER BE RESORTED. 4. GROUND NO.1 OF BOTH ASSESSEE AND REVENUE ARE GENERA L IN NATURE NEEDING NO SPECIFIC ADJUDICATION. 5. GROUNDS 2.1 TO 2.6 OF THE REVENUE AND GROUNDS 2 TO 7 OF THE ASSESSEE ARE ON TRANSFER PRICING ISSUES. 6. LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET SUBMITTE D THAT THE ORDER OF THE LD. ASSESSING OFFICER WHICH IS IMPUGNE D HERE WAS SUBJECTED TO A RECTIFICATION BY LD. TRANSFER PRICIN G OFFICER (IN SHORT LD. TPO). AS PER THE LD. AUTHORISED REPRESENTATIVE, THE TPO HAD ON 27.02.2015 PASSED A RECTIFICATION ORDER WHEREBY MA RGIN COMPUTATION OF A NUMBER OF COMPARABLES WERE RE-CONSIDERED. AS PER THE LD. AUTHORISED REPRESENTATIVE, THE LD. TPO HAD RE-CALC ULATED THE PLI OF THE COMPARABLES WHICH WERE USED FOR ANALYZING THE P RICING OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH IT S ASSOCIATED ENTERPRISE. ACCORDING TO HIM, GROUNDS RAISED IN TH E ASSESSEE IN THIS APPEAL WOULD STILL BE VALID AND RELEVANT AND HAD T O BE CONSIDERED, DESPITE SUCH RECTIFICATION OF THE MARGINS COMPUTED FOR THE COMPARABLES. 7. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT REVENUE WAS ALSO AGGRIEVED ON THE DI RECTIONS BY THE LD. DRP TO EXCLUDE CERTAIN COMPARABLES AND THE CORRECT NESS OF NEW PLI ITA NO.434 & 449/MDS/2015 :- 7 -: OF COMPARABLES BASED ON RECTIFICATION EFFECTED BY L D. TPO ON 27.02.2015 WAS AN ISSUE WHICH WAS NEVER CONSIDERED BY THE LD. DRP. 8. WE HAVE HEARD THE RIVAL CONTENTION AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ASSESSEE THROUGH ITS GRO UNDS IS SEEKING EXCLUSION OF NUMBER OF COMPANIES BASED ON VARIOUS F ILTERS WHICH AS PER ASSESSEE OUGHT TO HAVE BEEN APPLIED BY THE LOWE R AUTHORITIES. AS AGAINST THIS, REVENUE IS AGGRIEVED ON DIRECTIONS OF THE LD. DRP TO EXCLUDE ONE OF THE MANY COMPARABLES CONSIDERED BY T HE LD. TPO. WHAT WE FIND IS THAT THE LD. TPO HAD IN THE ORIGINA L TPO ORDER DATED 03.12.2013 WHILE ACCEPTING THE TNMM STUDY AS THE M OST APPROPRIATE ONE, CONSIDERED FOLLOWING COMPARABLES FOR ANALYZIN G THE CORRECTNESS OF THE VALUE OF THE INTERNATIONAL TRANSACTIONS UND ERTAKEN BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISE. SL.NO NAME OF THE COMP. COMPANY MARGIN (%) 1 AKSHAY SOFTWARE TECH LTD (-)0.91 2 KALS INFORMATION SYSTEM LTD 36.25 3 SPRY RESORUCES INDIA P. LTD 33.01 4 ICRA TECHNO ANALYTICS LTD 28.89 5 CTIL (COMP-U-LEARN TECH INDIA LTD) 16.94 6 TAKSHEEL SOLUTIONS LTD 41.92 7 THINKSOFT GLOBAL SERVICES LTD 17.27 8 R.S. SOFTWARE (INDIA) LTD 10.59 9 FCS SOFTWARE SOLUTIONS LTD 49.12 AVERAGE 25.90 ITA NO.434 & 449/MDS/2015 :- 8 -: IN THE RECTIFICATION ORDER DATED 27.02.2015 OF THE LD. TPO, THE MARGIN OF THE FOLLOWING COMPARABLES WERE REWORKED AS UNDER :- SL.NO NAME OF THE COMP. COMPANY MARGIN (%) 1 KALS INFORMATION SYSTEM LTD 21.11 2 SPRY RESORUCES INDIA P. LTD 33.26 3 ICRA TECHNO ANALYTICS LTD 28.62 4 CTIL (COMP-U-LEARN TECH INDIA LTD) 18.11 5 TAKSHEEL SOLUTIONS LTD 40.22 6 THINKSOFT GLOBAL SERVICES LTD 17.26 7 R.S. SOFTWARE (INDIA) LTD 10.29 AVERAGE 24.12 A CHANGE IN PROFIT LEVEL MARGINS OF COMPARABLES WOU LD HAVE CONSIDERABLE EFFECT ON THE TP STUDY SINCE ASSESSEE S MARGIN HAS TO BE COMPARED WITH AVERAGE PLI OF THE COMPARABLES OF THE SELECTED COMPARABLES. THAT APART, THE QUESTION WHETHER LD. T PO COULD AFFECT A RECTIFICATION OF AN ASSESSMENT ORDER PASSED BY THE LD. ASSESSING OFFICER PURSUANT TO DIRECTIONS OF LD. DRP U/S.144C (13) OF THE ACT HAS ALSO TO BE CONSIDERED. IN SUCH CIRCUMSTANCES, WE ARE OF TH E OPINION THAT TRANSFER PRICING ISSUES RAISED BY THE ASSESSEE AS W ELL AS REVENUE REQUIRES A REVISIT BY THE LD. DRP. WE THEREFORE SE T ASIDE THE ORDER OF THE LD. ASSESSING OFFICER AND REMIT THE TRANSFER PR ICING ISSUES BACK TO THE LD. DRP FOR CONSIDERATION AFRESH AND LD. ASSESS ING OFFICER SHALL PASS A FRESH ORDER BASED ON THE DIRECTIONS GIVEN BY THE LD. DRP. LD. DRP SHALL ALSO CONSIDER CORRECTNESS OF MARGINS OF VARIO US COMPARABLES WORKED OUT BY THE LD.TPO AND ALSO DECIDE EXCLUSION / INCLUSION SOUGHT ITA NO.434 & 449/MDS/2015 :- 9 -: BY THE ASSESSEE GIVING REASONS FOR THEIR DECISION. IN THE RESULT, GROUNDS 2 TO 7 OF THE ASSESSEE AND GROUNDS 2.1 TO 2 .6 OF THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 9. THE ONLY OTHER GROUND RAISED BY THE ASSESSEE IS ON DISALLOWANCE OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. 10. AS PER LD. AUTHORISED REPRESENTATIVE SUCH CONTRIBUT ION WAS REMITTED BY THE ASSESSEE BEFORE DUE DATE FOR FURNIS HING RETURNS. HENCE, DISALLOWANCE OUGHT NOT HAVE BEEN DONE U/S.2( 24)(X) R.W.S. 36(1)(VA) OF THE ACT. RELIANCE WAS PLACED ON THE J UDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. M/S. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD IN TAX CASE (APPEAL) 585 AND 586/2015 DATED 24.07.2015. 11. PER CONTRA, LD. DEPARTMENTAL REPRESENTATIVE STRONG LY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 12. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUSE D THE ORDERS OF THE AUTHORITIES BELOW. HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF M/S. INDUSTRIAL SECURITY & INTELLIGENCE INDIA PVT. LTD (SUPRA) HAD HELD AT PARA 5 & 6 OF ITS JUDGMENT DATED 24.07 .2015 AS UNDER. 5. WE FIND THAT THE TRIBUNAL HAS RIGHTY RELIED ON THE DECISION OF THE SUPREME COURT IN THE CASE OF CIT VS . ALOM EXTRUSIONS LTD, REPORTED IN 319 ITR 306, WHERE BY ITA NO.434 & 449/MDS/2015 :- 10 -: THE SUPREME COURT HELD THAT OMISSION OF SECOND PROVISO TO SECTION 43B AND AMENDMENT TO FIRST PROVI SO BY FINANCE ACT, 2003 ARE CURATIVE IN NATURE AND ARE EFFECTIVE RETROSPECTIVELY. I.E. WITH EFFECT FROM 01.01.1988 I.E THE DATE OF INSERTION OF FIRST PROVI SO. THE DELHI HIGH COURT IN THE CASE OF CIT VS. AMIL LT D, REPORTED IN 321 ITR 508 HELD THAT IF THE ASSESSEE HAD DEPOSITED EMPLOYEES CONTRIBUTION TOWARDS PROVIDENT FUND AND ESI AFTER DUE DATE AS PRESCRIBED UNDER THE RELEVANT ACT, BUT BEFORE THE DUE DATE OF FILING OF RETURN UNDER THE INCOME TAX ACT, NO DISALLOWANCE COULD BE MADE IN VIEW OF THE PROVISIONS OF SECTION 43B AS AMENDED BY FINANCE ACT, 2003. 6. IN THE PRESENT CASE, THE ASSESSEE HAD REMITTED THE EMPLOYEES CONTRIBUTION BEYOND THE DUE DATE FOR PAYMENT, BUT WITHIN THE DUE DATE FOR FILING THE RET URN OF INCOME. HENCE, FOLLOWING THE ABOVE SAID DECISION S, WE FIND NO REASON TO DIFFER WITH THE FINDINGS OF TH E TRIBUNAL. ACCORDINGLY, WE FIND NO QUESTION OF LAW M UCH LESS ANY SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION IN THESE APPEALS. ACCORDINGLY, BOTH THE TAX CASE (APPEALS) STAND DISMISSED. NO COST. CONSEQUENTLY, M.P. NO.1 OF 2015 IS ALSO DISMISSED . HOWEVER, WHETHER THE SUM OF H5,74,941/- WAS PAID B Y THE ASSESSEE BEFORE DUE DATE OF FILING OF RETURN WAS NOT VERIFI ED BY ANY OF THE LOWER AUTHORITIES. FOR THIS LIMITED PURPOSE, WE REMIT TH E ISSUE BACK TO THE FILE OF THE LD. ASSESSING OFFICER. GROUNDS 8 TO 13 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 13. THIS LEAVES US WITH GROUND NO.3 TAKEN BY THE REVEN UE, IN ITS APPEAL WHICH ASSAILS EXCLUSION OF FOREIGN EXCHA NGE LOSS BOTH FOR EXPORT TURNOVER AND TOTAL TURNOVER. WE FIND THAT THE ABOVE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT O F HONBLE ITA NO.434 & 449/MDS/2015 :- 11 -: KARNATAKA HIGH COURT IN THE CASE OF CIT VS. TATA ELXSI LTD, 349 ITR 98. THEIR LORDSHIP HAD HELD THAT WHATEVER WAS EXCLUDED FROM EXPORT TURNOVER HAD TO EXCLUDED FROM TOTAL TURNOVER ALSO W HILE COMPUTING DEDUCTION U/S.10A/10B OF THE ACT. IN SUCH CIRCUMSTA NCES, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF LOW ER AUTHORITIES. 14. TO SUMMARIZE THE RESULTS, APPEAL OF THE REVENUE IS TREATED S PARTLY ALLOWED FOR STATISTICAL PURPOSES WHEREAS THA T OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON FRIDAY, THE SEVENTH DAY OF AP RIL, 2017, AT CHENNAI. SD/- SD/- ( . . . ) ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( !' . #$#% ) (ABRAHAM P. GEORGE) & / ACCOUNTANT MEMBER / CHENNAI ! / DATED:7TH APRIL, 2017. KV !' # $% &% / COPY TO: 1 . '( / APPELLANT 3. ) () / CIT(A) 5. %+, # - / DR 2. #.'( / RESPONDENT 4. ) / CIT 6. ,/ 0 / GF