DCIT, CHENNAI V. Gofrugal Software Technologies Private Limited, CHENNAI

ITA 722/CHNY/2015

• Counselvise Citation: 72221714 RSA 2015
• Duration Of Justice: 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 18-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 07-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S BHARATH; A V SREEKANTH
• Assessee Lawyers: G BASKAR

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NOS.721 & 722/MDS/2015 ' (' / ASSESSMENT YEARS : 2007-08 & 2009-10 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), CHENNAI - 600 034. V. M/S GOFRUGAL SOFTWARE TECHNOLOGIES PVT. LTD., NO.11, SARATHY NAGAR, SRI NARAYANA COMPLEX, VIJAYA NAGAR, VELACHERRY, CHENNAI - 600 042. PAN : AACCA 4341 F (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI S. BHARATH, CIT & SHRI A.V. SREEKANTH, JCIT ,-*+ . / / RESPONDENT BY : SHRI G. BASKAR, ADVOCATE 0 . 1$ / DATE OF HEARING : 18.08.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 04.09.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: BOTH THE APPEALS ARE FILED BY THE REVENUE AGAINS T THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, 2 I.T.A. NOS.721 & 722/MDS/15 CHENNAI, DATED 14.11.2014 AND PERTAIN TO ASSESSMENT YEARS 2007- 08 AND 2009-10. THE ONLY ISSUE ARISES FOR CONSIDER ATION IN BOTH THE APPEALS IS WITH REGARD TO EXCLUSION OF EXPENSES OF TELECOMMUNICATION CHARGES AND TECHNICAL SERVICES IN CURRED IN FOREIGN EXCHANGE, FROM THE TOTAL TURNOVER FOR THE P URPOSE OF COMPUTING DEDUCTION UNDER SECTION 10A OF THE INCOME -TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. WE HEARD SHRI S. BHARAT & SHRI A.V. SREEKANTH, T HE LD. DEPARTMENTAL REPRESENTATIVES AND SHRI G. BASKAR, TH E LD.COUNSEL FOR THE ASSESSEE. THE ASSESSING OFFICER, WHILE COM PUTING ELIGIBLE PROFIT FOR DEDUCTION UNDER SECTION 10A OF THE ACT, FOUND THAT THE ASSESSEE HAS INCURRED AN EXPENDITURE OF ` 40,22,630/- TOWARDS TELECOMMUNICATION CHARGES AND ANOTHER SUM OF ` 89,17,289/- TOWARDS TECHNICAL SERVICES IN FOREIGN CURRENCY FOR PROVIDING SERVICES OUTSIDE INDIA. THE ASSESSING OFFICER HAS TAKEN THI S EXPENDITURE AS FORMING PART OF THE TOTAL TURNOVER, HOWEVER, REDUCE D THE SAME FROM EXPORT TURNOVER. THE CIT(APPEALS), BY FOLLOWING TH E DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN ITO V. SAK SOFT L TD. (2009) 313 ITR (AT) 353, FOUND THAT BOTH TOTAL TURNOVER AND EX PORT TURNOVER SHOULD BE OF THE SAME FACTORS. THE TELECOMMUNICATI ON CHARGES INCURRED IN FOREIGN EXCHANGE AND FOR PROVIDING TECH NICAL SERVICES 3 I.T.A. NOS.721 & 722/MDS/15 OUTSIDE INDIA ARE TO BE EXCLUDED BOTH FROM EXPORT T URNOVER AND TOTAL TURNOVER. THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE EXPENDITURE INCURRED BY THE ASSESSEE TOWARDS TELECO MMUNICATION CHARGES AND TECHNICAL SERVICES ARE TO BE EXCLUDED F ROM THE EXPORT TURNOVER AND THE SAME HAS ALSO TO BE EXCLUDED FROM THE TOTAL TURNOVER. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE CIT(APPEALS) AND ACCORDINGLY, THE SAM E ARE CONFIRMED. 3. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE DISMISSED. ORDER PRONOUNCED ON 4 TH SEPTEMBER, 2015 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 4 TH SEPTEMBER, 2015. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-III, CHENNAI-34 4. 0 81 /CIT, CHENNAI-III, CHENNAI-34 5. 69 ,1 /DR 6. :' ; /GF.