DCIT, Chengalput V. Bally Technologies Pvt. Ltd., CHENNAI

ITA 645/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8399 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , !.#$#%,' !( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ./ ITA NOS. 643, 644 & 645/MDS/2016 % *% / ASSESSMENT YEARS : 2008-09, 2009-10 & 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE -1(2), CHENNAI 600 034. V. M/S.BALLY TECHNOLOGIES PVT.LTD., UNIT 1 & 4, 11 TH FLOOR, CREST BUILDING, INTL.TECH PARK, CSIR ROAD, TARAMANI, CHENNAI 600 113. PAN : AACCB 6575A (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI. SHIVA SRINIVAS, JCIT ./,-01 / RESPONDENT BY : SHRI. SAROJ KUMAR PARIDA, ADVOCAT E 2 03' / DATE OF HEARING : 04.08.2016 45* 03' / DATE OF PRONOUNCEMENT : 23.09.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: ALL THE THREE APPEALS OF THE DEPARTMENT ARE DIRECTE D AGAINST THE RESPECTIVE ORDER OF CIT(A) -1 FOR THE ASSESSMENT YE ARS 2008-09, 2009-10 & 2010-11 . SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN AL L THE 2 I.T.A. NOS. 643, 644 & 645/MDS/2016 APPEALS, WE HEARD THE SAME TOGETHER AND DISPOSING O F THE SAME BY THIS COMMON ORDER. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO EXPENSES INCURRED BY THE ASSESSEE TOWARDS INTERNET CHARGES/ FOREIGN TRAVEL WHILE COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE AC T. SHRI SHIVA SRINIVAS, THE LEARNED DEPARTMENT REPRESENTATIVE SUB MITTED THAT THE ASSESSING OFFICER INCLUDED THE INTERNET CHARGES AND FOREIGN TRAVEL EXPENSES INCURRED IN FOREIGN CURRENCY IN THE EXPORT TURNOVER. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION TO SECTION 10A FOUND THAT THE EXPENSES INCURRED IN FOREIGN CURRENCY TOWA RDS INTERNET CHARGES / FOREIGN TRAVEL HAS TO BE INCLUDED IN THE EXPORT TUR NOVER. HOWEVER, THE SAME CANNOT FORM PART OF THE TOTAL TURNOVER. THE CI T(A) BY PLACING HIS RELIANCE ON THE DECISION OF THE SPECIAL BENCH OF TH IS TRIBUNAL IN INCOME- TAX OFFICER V M/S SAK SOFT LTD. (2009) 313 ITR 353 (CHENNAI SPECIAL BENCH) FOUND THAT THE EXPORT TURNOVER AND THE TOTAL TURNOVER SHALL CONTAIN THE SAME FIGURE. THEREFORE, IF THE EXPENDITURE INCU RRED BY THE ASSESSEE TOWARDS INTERNET CHARGES AND FOREIGN TRAVEL EXPENSE S WAS EXCLUDED FROM THE TOTAL TURNOVER, THE SAME HAS ALSO TO BE EXCLUDE D FROM THE EXPORT TURNOVER ALSO. 3. ACCORDING TO THE LEARNED REPRESENTATIVE FOR THE DEPARTMENT, THE DEPARTMENT HAS ALREADY FILED AN APPEAL AGAINST THE DECISION OF THE TRIBUNAL IN SAK SOFT LTD. CASE MENTIONED SUPRA AND THE SAME IS PENDING. 3 I.T.A. NOS. 643, 644 & 645/MDS/2016 THEREFORE, THE CIT IS NOT JUSTIFIED IN FOLLOWING TH E DECISION OF THIS SPECIAL BENCH OF THIS TRIBUNAL. 4. ON THE CONTRARY, SHRI SAROJ KUMAR PARIDA, THE LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE EXPENDITURE INCURRE D BY THE ASSESSEE TOWARDS INTERNET CHARGES AND FOREIGN TRAVEL EXPENSE S CANNOT BE CONSIDERED AS TURNOVER AT ALL. IT IS AN EXPENDITURE INCURRED BY THE ASSESSEE. THEREFORE, ACCORDING TO THE LEARNED COUNS EL FOR THE ASSESSEE, IT CANNOT FORM PART OF EITHER THE EXPORT TURNOVER O R THE TOTAL TURNOVER. FURTHERMORE, ONCE THE ASSESSING OFFICER EXCLUDED TH E INTERNET CHARGES AND FOREIGN TRAVEL EXPENSES FROM THE TOTAL TURNOVER , THE SAME HAS ALSO TO BE EXCLUDED FROM THE EXPORT TURNOVER. ACCORDING TO THE LEARNED COUNSEL, MERE PENDENCY OF THE APPEAL BEFORE THE HIGH COURT A GAINST THE ORDER OF THIS TRIBUNAL IN SAK SOFT LTD., CANNOT BE A REASON TO TAKE D A DIFFERENT VIEW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WHILE COM PUTING THE DEDUCTION UNDER SECTION 10A, THE TOTAL TURNOVER AND EXPORT TU RNOVER SHALL CONTAIN THE SAME FIGURE. IF THE INTERNET CHARGES / FOREIGN TRAVEL INCURRED BY THE ASSESSEE IN FOREIGN CURRENCY HAS TO BE EXCLUDE FROM THE TOTAL TURNOVER, THE SAME ALSO NEEDS TO BE EXCLUDED FROM THE EXPORT TURNOVER. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION, THAT TH E CIT (A) HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO EXCLUDE THE EXPEN DITURE INCURRED BY THE 4 I.T.A. NOS. 643, 644 & 645/MDS/2016 ASSESSEE TOWARDS INTERNET CHARGES / FOREIGN TRAVEL IN FOREIGN CURRENCY BOTH FROM THE EXPORT TURNOVER AND TOTAL TURNOVER. T HEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT (A). ACCORDINGLY, THE SAME IS CONFIRMED. 6. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E DEPARTMENT ARE DISMISSED. ORDER PRONOUNCED ON 23 RD SEPTEMBER, 2016 AT CHENNAI. SD/- SD/- ( !.#$#% ) ( . . . ) (ABRAHAM P. GEORGE) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 23 RD SEPTEMBER, 2016. SP. 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A) 4. 2 ;3 /CIT, 5. 9< .3 /DR 6. =% > /GF.