Portware India Private Limited, Hyderabad, Hyderabad V. ITO, Ward-16(2), Hyderabad, Hyderabad

ITA 625/HYD/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5993 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-05-2018
• Assessment Year: 2011-2012
• Appeal Filed On: 07-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GEETENDER MANN
• Assessee Lawyers: GOPI CHAND BHATTARAM
• Section: 143(3); 10

Judgement Text

ITA NO 625 OF 201 7 PORTWARE INDIA PVT LTD HYDERABAD. PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO.625/HYD/2017 (ASSESSMENT YEAR: 2011-12) M/S. PORTWARE INDIA PRIVATE LIMITED, HYDERABAD PAN: AAFCP1878F VS INCOME TAX OFFICER WARD 16(2) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI GOPI CHAND BHATTARAM FOR REVENUE : SMT. GEETENDER MANN, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y 2011-12 AGAIN ST THE ORDER OF THE LEARNED CIT (A)-4, HYDERABAD, DATE D 10.01.2017. 2. IN THIS APPEAL, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE CIT (A) IN DISMISSING THE ASSESSEES APPEAL FOR NON- PROSECUTION AND ALSO ON MERITS. THE ONLY ISSUE INVO LVED IN THIS APPEAL IS WHETHER THE INTERNET CHARGES ARE TO BE EX CLUDED FROM THE EXPORT TURNOVER AS WELL AS TOTAL TURNOVER FOR COMPU TING THE DEDUCTION U/S 10A OF THE ACT. 3. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO OBSERVED THAT THE ASSESSEE HAS INCURRED EXPENSES DATE OF HEARING: 23.05.2018 DATE OF PRONOUNCEMENT: 2 5 . 0 5 .2018 ITA NO 625 OF 201 7 PORTWARE INDIA PVT LTD HYDERABAD. PAGE 2 OF 3 UNDER THE HEAD INTERNET CHARGES AMOUNTING TO RS.1 5,84,025. HE WAS OF THE OPINION THAT THE SAME HAVE TO BE REDUCED FROM THE EXPORT TURNOVER ONLY WHILE COMPUTING THE DEDUCTION U/S 10A OF THE ACT. ACCORDINGLY, HE REDUCED THE INTERNET CHARG ES FROM THE EXPORT TURNOVER AND BROUGHT IT TO TAX. AGGRIEVED, A SSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO DISMISSE D THE SAME ON THE GROUND THAT THE ASSESSEE FAILED TO APPEAR ON TH E DATES FIXED FOR HEARING. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT ON THE LAST DATE OF HEARING I.E. 3.1.2017, THE ASSE SSEE HAD INTIMATED TO THE CIT (A) OVER TELEPHONE THAT ITS RE PRESENTATIVE WAS OUT OF STATION AND SOUGHT AN ADJOURNMENT, BUT THE C IT (A) HAS DISMISSED THE APPEAL. FURTHER, HE SUBMITTED THAT ON MERITS, THE ISSUE IS NOW COVERED IN FAVOUR OF THE ASSESSEE BY T HE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. HC L TECHNOLOGIES LTD IN CIVIL APPEAL NO.8535 OF 2013 & OTHERS DATED 24.04.2018, WHEREIN THE HON'BLE APEX COURT HAS UPHE LD THE FINDINGS OF THE HON'BLE HIGH COURT THAT EXPENSES WH ICH ARE EXCLUDED FROM THE EXPORT TURNOVER HAVE TO BE EXCLUD ED FROM THE TOTAL TURNOVER ALSO WHILE COMPUTING THE DEDUCTION U /S 10A OF THE ACT. HE FILED A COPY OF THE SAID ORDER CITED BEFORE US. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD, WE FIND THAT THE ISSUE ON MERITS IS COVE RED IN FAVOUR OF THE ASSESSEE. RESPECTFULLY FOLLOWING THE JUDGMENT O F THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. HCL TECHNOLOGI ES (SUPRA), WE DIRECT THE AO TO RE-COMPUTE THE DEDUCTION U/S 10 A OF THE ACT ITA NO 625 OF 201 7 PORTWARE INDIA PVT LTD HYDERABAD. PAGE 3 OF 3 BY EXCLUDING THE INTERNET CHARGES FROM BOTH THE EXP ORT AS WELL AS TOTAL TURNOVER OF THE ASSESSEE. ASSESSEES APPEAL I S ACCORDINGLY ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2018. SD/- SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 25 TH MAY 2018. VINODAN/SPS COPY TO: 1 M/S. PORTWARE INDIA (P) LTD, 404, 4 TH FLOOR, BUILDING NO.14, SURVEY NO.64 (PART), MIND SPACE, CYBERABAD PROJECT, HITECH CITY, HYDERABAD 2 INCOME TAX OFFICER, WARD 16(2) HYDERABAD 3 CIT (A) - 4 HYDERABAD 4 PR. CIT -4, HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER