ITO, New Delhi V. M/s. GTA Data Services (India) Pvt. Ltd., New Delhi

ITA 452/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65793 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 01-08-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 30-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: ARUN BANSAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI A.N. PAHUJA, ACCOUNTANT MEMBER ITA NOS. 452, 453/DEL/2012 ASSESSMENT YEARS: 2007- 2008, 2006-07 ITO VS. GTA DATA SERVICES (INDIA) PVT. LTD. WARD 12 (3) 129, OKHLA INDL . AREA NEW DELHI. PHASE III NEW DELHI 110 020 AABCG3953C (APPELLANT) (RESP ONDENT) APPELLANT BY : SHRI SATPAL SINGH, SR. DR RESPONDENT BY : SHRI ARUN BANSAL, CA ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS IMPUGNED FIRS APPEL LATE ORDER ON THE COMMON GROUNDS INVOLVING THE ISSUE AS TO WHETHER THE LD. C IT(A) WAS JUSTIFIED IN DELEING THE ADDITION OF RS. 12,93,570/- IN ASSTT. Y EAR 2007-08 AND RS. 14,26,190/- IN ASSESSMENT YEAR 2006-07 BY RECALCUL ATING THE DEDUCTION U/S 10A OF THE ACT. 2. AT THE OUTSET LD. AR POINTED OUT THAT T HE ISSUE RAISED IN THE PRESENT APPEALS IS FULLY COVERED BY THE FIRST APPEL LATE ORDER DATED 2.7.2009 FOR THE ASSESSMENT YEAR 2005-06 IN THE CASE OF ASSE SEE AGAINST WHICH THE ITA NO. 452,453/DEL/2012 2 REVENUE DID NOT PREFER APPEAL BEFORE THE TRIBUNAL. IN OTHER WORDS THE REVENUE HAS ACCEPTED THE FIRST APPELLATE ORDER ON T HE ISSUE PASSED IN FAVOUR OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06. TH E LD. AR SUBMITTED THAT WHILE DECIDING THE ISSUE THE LD. CIT(A) IN THE ASSESSMENT YEAR 2005-06 HAS FOLLOWED SEVERAL DECISIONS OF THE TRIBUNAL AND OTHERS, AS MENTIONED IN THE FIRST APPELLATE ORDER, A COPY HAS BEEN MADE AVA ILABLE. THE LD. AR POINTED FURTHER THAT IN ITS RECENT DECISIONS THE TR IBUNAL, HONBLE DELHI HIGH COURT, THE HONBLE BOMBAY HIGH COURT AND HONBLE KA RNATAKA HIGH COURT HAVE ALSO BEEN PLEASED TO DECIDE AN IDENTICAL ISSUE IN FAVOUR OF THE ASSESEE. HE REFERRED THE FOLLOWING LATEST DECISIONS IN THIS REGARD :- 1. CIT VS. GENPACT INDIA, 2011 (IT2)-GJX-059 0-DEL 2. CIT VS. GEM PLIS JEWELLERY INDIA LTD. (2011 ) 330 ITR 175 BOMBAY 3. CIT VS. TATA ELXSI LTD. , ITA NO. 70/2009 DAT ED 30.8.2011 (KARNATAKA HIGH COURT) 3. LD. DR ON THE OTHER HAND RELIED UPON THE A SSESSMENT ORDER. 4. THE RELEVANT FACTS ARE THAT THE ASSESSEE CO MPANY WAS INCORPORATED ON 14.5.2003 AND IS 100% EXPORT ORIENTED UNIT (EOU) REGISTERED WITH THE SCHEME OF SOFTWARE TECHNOLOGY PACK OF INDIA(STPI), NOIDA. DURING THE ASSESSMENT YEARS UNDER CONSIDERATION THE ASSESSEE D ERIVED ITS REVENUE FROM INFORMATION TECHNOLOGY ENABLED BACK OFFICE OPER ATION SERVICES LIKE ACCOUNTING, DATA AND TRANSACTION PROCESSING, INVOIC E PROCESSING, ACCOUNT RECEIVABLE AND OTHER BACK ROOM OFFICE FUNCTIONS. TH E ASSESSEE CLAIMED ITA NO. 452,453/DEL/2012 3 DEDUCTION U/S 10A OF THE ACT ON EXPORT TURN OVER. T HE AO CALCULATED THE CLAIMED DEDUCTION AFTER EXCLUDING THE COMMUNICATION EXPENSES AS WELL AS TRAVELING EXPENSES INCURRED IN FOREIGN CURRENCY FRO M EXPORT TURN OVER BUT NOT EXCLUDED THE SAME FROM TOTAL TURN OVER I.E. WIT HOUT CONSIDERING THAT THE NUMERATOR AND DENUMERATOR COULD HAVE THE SAME COMPO NENTS WHILE CALCULATING ANY DEDUCTION OR EXEMPTION OF EXPORT TU RN OVER. 5. THE ASSESSEE PREFERRED FIRST APPEAL AND SUBMITTED IN DETAIL THE FACTUAL AND LEGAL POSITION AGAINST THE ASSESSMENT O RDER ON THE ISSUE. BEING CONVINCED WITH THE SUBMISSION OF THE ASSESSEE, THE LD. CIT(A) HAS ALLOWED THE CLAIMED DEDUCTION U/S 10A OF THE ASSESSEE APPRE CIATING THE FACTUAL AND LEGAL POSITION THAT AMOUNT INCURRED IN FOREIGN CURR ENCY SHOULD BE EXCLUDED FROM BOTH EXPORT TURN OVER AS WELL AS FROM TOTAL TU RN OVER FOR DETERMINING THE DEDUCTION U/S 10A OF THE ACT. WE ALSO FIND THA T THE HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C IT VS. GENPACT INDIA (SUPRA) HAS BEEN PLEASED TO EXPRESS THE SAME VIEW. IN THIS REGARD THE HONBLE HIGH COURT OF DELHI HAS CONCURRED WITH THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GEN PLUS J EWELLERY INDIA LTD. (SUPRA) AND HONBLE KARNATAKA HIGH COURT IN THE CAS E OF CIT VS. TATA ELXSI LTD. (SUPRA). UNDER THESE CIRCUMSTANCES WE DO NOT F IND INFIRMITY IN THE FIRST APPELLATE ORDER IN QUESTION ON THE ISSUE AS THE LD. CIT(A) HAS RIGHTLY DIRECTED THE AO TO RECALCULATE THE DEDUCTION CLAIME D U/S 10A BY EXCLUDING THE EXPENSES ON ACCOUNT OF TELECOMMUNICATION AND TR AVELING INCURRED IN ITA NO. 452,453/DEL/2012 4 FOREIGN CURRENCY BOTH FROM EXPORT TURN OVER AS WELL AS TOTAL TURN OVER. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD . THE ISSUE RAISED IN THE GROUND IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. T HE RELATED GROUNDS ARE THEREFORE REJECTED. 6. CONSEQUENTLY APPEALS ARE DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER, 2012. SD/- SD/- (A.N. PAHUJA) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED *VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT