ATOS ORIGIN (INDIA) P. LTD, MUMBAI V. DCIT 8(1), MUMBAI

ITA 6217/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59670 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 03-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 16-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO
• Keywords: Services rendered outside India
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO.6217/MUM/2010 (AY 2004-2005) ITA NO.6218/MUM/2010 (AY 2006-2007) ATOS ORIGIN (INDIA) PVT. LTD., 126/127, SDF-IV SEEPZ, ANDHERI (EAST), MUMBAI 400 096. PAN: AAAC02461J VS. THE ASSISTANT COMMISSIONER OF INCOME TAX 8(1), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ALIASGER RAMPURAWALA RESPONDENT BY : SHRI GOLI SRINIWAS RAO (CIT DR) DATE OF HEARING : 03-01-2012 DATE OF PRONOUNCEMENT : 13-01 -2012 O R D E R PER V. DURGA RAO, J.M: THESE TWO APPEALS ARE DIRECTED AGAINST THE ORDER O F THE LD. CIT (A)-VIII, DATED 25.5.2010 RELATING TO ASSESSMENT YEARS 2004-0 5 AND 2006-07. 2. FACTS ARE IN BRIEF THAT DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE AO HAS OBSERVED THAT THE ASSESSEE COMPANY HAS CLAIM ED EXEMPTION U/S 10A AMOUNTING TO RS. 31,93,097/- & RS. 13,01,24,810/- A ND U/S 10B AMOUNTING TO RS. 12,06,58,145/- & RS. 20,31,42,901/- FOR THE ASSESSMENT YEAR 2004-05 & 2006-07 RESPECTIVELY. THE ASSESSING OFFICER HAD ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE CALLING EXPLANATION IN RESPECT OF E XPENSES INCURRED IN FOREIGN EXCHANGE IN PROVIDING TECHNICAL SERVICES OUTSIDE IN DIA MAY NOT BE EXCLUDED FROM EXPORT TURNOVER. IN REPLY, THE ASSESSEE HAS S UBMITTED THAT AS PER THE ITA NOS.6217 & 6218/M/2010 2 DECISION OF THE DELHI TRIBUNAL IN THE CASE OF BINAR Y SEMEANTICS LTD. 109 TTJ 556 WHEREIN IT WAS HELD THAT IN CASE EXPENSES INCUR RED IN FOREIGN EXCHANGE TOWARDS TECHNICAL SERVICES PROVIDED OUTSIDE INDIA A RE REDUCED FROM THE EXPORT TURNOVER THEN IN THAT CASE THE SAID EXPENSES SHOULD ALSO BE REDUCED FROM THE TOTAL TURNOVER TO ARRIVE AT THE CORRECT AMOUNT OF E XEMPTION U/S 10A & 10B. THE ASSESSING OFFICER NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND COMPLETED THE ASSESSMENT. 3. AS AGAINST THE ORDER OF THE ASSESSING OFFICER, A SSESSEE CARRIED MATTER IN APPEAL BEFORE THE LD. CIT (A) AND IT WAS SUBMITTED THAT WHILE COMPUTING DEDUCTION U/S 10A & 10B OF THE ACT, THE ASSESSING OFFICER ERRED IN REDUCING EXPENSES INCURRED IN FOREIGN EXCHANGE FOR SERVICES RENDERED OUTSIDE INDIA ONLY FROM THE EXPORT TURNOVER AND NOT FROM THE TOTAL TUR NOVER. THE LD. CIT (A) AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE AND BY FOLLOWING THE DECISION OF HIS PREDECESSOR IN ASSESSEES OWN CASE IN AY 2002-0 3, CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), ASSES SEE CARRIED MATTER IN APPEAL BEFORE THE TRIBUNAL. 5. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THESE APPEALS HAS BEEN SQUARELY COVERED BY THE DECISION OF THE ITAT IN ITA NO. 6358/M/2008 FOR THE AY 2002-03 BY ORDER DATED 30.10.2009. AS AGAINST THE ORDER OF TH E TRIBUNAL, REVENUE CARRIED MATTER IN APPEAL BEFORE THE HIGH COURT AND THE SAME WAS DISMISSED BY THE HONBLE HIGH COURT IN ITA NO. 3733 OF 2010 BY ORDER DATED 29.7.2011. 6. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRE SENTATIVE FAIRLY ACCEPTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. ITA NOS.6217 & 6218/M/2010 3 7. WE HAVE HEARD BOTH THE SIDES, PERUSE THE RECORD AND GONE TO THE ORDERS OF THE AUTHORITIES BELOW. 8. THE ISSUE INVOLVED IN THESE APPEALS IS WHETHER F OREIGN EXPENSES TAKEN NOTE OF BY THE ASSESSING OFFICER WERE NOT LIABLE TO BE EXCLUDED FROM THE EXPORT TURNOVER. THE SAME ISSUE WAS CONSIDERED BY THE TR IBUNAL IN ITA NOS. 6478 & 6483/M/2009 FOR THE AY 2003-04 & 2005-06. THE TRIBU NAL BY FOLLOWING THE ASSESSEES OWN CASE FOR THE AY 2002-03 HELD AS UNDE R: IT IS SIMPLE AND PLAIN THAT IF ANY AMOUNT IS REDUC ED FROM THE FIGURE OF EXPORT TURNOVER, IT WOULD ALSO STAND EXCLUDED FROM THE FIGURE OF TOTAL TURNOVER. IF A PARTICULAR PART IS HELD TO BE NOT CONSTITUTING EXPORT TURNOVER, THAT WILL AUTOMATICAL LY STAND EXCLUDED FROM THE TOTAL TURNOVER BECAUSE THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER PLUS LOCAL TURNOVER. IN O UR CONSIDERED OPINION THE LEARNED CIT (A) WAS NOT JUSTIFIED IN UP HOLDING THE VIEW OF THE ASSESSING OFFICER IN REDUCING THE FOREIGN EX PENSES FROM THE EXPORT TURNOVER ONLY AND NOT GIVING CONSEQUENTIAL E FFECT TO THE FIGURE OF TOTAL TURNOVER. OUR VIEW IS FORTIFIED BY THE RECENT JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN CIT VS . GEM PLAST JEWELLERY INDIA LIMITED [(2011) 330 ITR 175 (BOM.)] . SIMILAR VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN ASSESSEES OWN CA SE FOR THE EARLIER YEAR, A COPY OF WHICH ORDER, HAS BEEN PLACE D ON RECORD. WE, THEREFORE, SET ASIDE THE IMPUGNED ORDER ON THIS ISSUE. 9. BY RESPECTFULLY FOLLOWING THE DECISION OF THE TR IBUNAL IN ASSESSEES OWN CASE FOR THE AY 2003-04 & 2005-06, B OTH THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF JANUARY, 2012. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 13 TH JANUARY, 2012. ITA NOS.6217 & 6218/M/2010 4 OKK* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- CONCERNED 4. COMMISSIONER OF INCOME TAX, CONCERNED 5. DEPARTMENTAL REPRESENTATIVE, BENCH H, MUMBAI TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI