M/s.Persource , Ahmedabad V. Jt.Commissioner of Income Tax,Range-6, Ahmedabad

ITA 826/AHD/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5070 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 09-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNANI
• Assessee Lawyers: KISHOR T HEMANI
• Keywords: Competent authority
• Section: 143(3)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ I.T.A. NO. 826/AHD/2015 ( ASSESSMENT YEAR : 2011-12) M/S. PERSOURCE, 101, COMMERCE HOUSE-1, NEAR JUDGES BUNGALOW, AHMEDABD / VS. JOINT COMM. OF INCOME- TAX,, RANGE-6, AHMEDABAD ./ ./ PAN/GIR NO. : AALFP1825H ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI KISHOR T. HEMANI, A.R. / RESPONDENT BY : SHRI SANTOSH KARNANI, SR. D.R. DATE OF HEARING 19/07/2018 !'# / DATE OF PRONOUNCEMENT 09/08/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-13, AHMEDA BAD (CIT(A) IN SHORT), DATED 27.02.2015 ARISING IN THE ASSESSMENT ORDER DATED 13.02.2014 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSES SMENT YEAR 2011- 12. ITA NO.826/AHD/15 [M/S. PERSOURCE VS. JT.CIT] A.Y. 2011-12 - 2 - 2. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEA RNED AR FOR THE ASSESSEE POINTED OUT THAT THE LIMITED GRIEVANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) IS TOWARDS DENIAL OF DEDUCT ION AMOUNTING TO RS.9,15,557/- CLAIMED UNDER S. 10A OF THE ACT FOR T HE REASON THAT ASSESSEE HAS FAILED TO RECEIVE CONVERTIBLE FOREIGN EXCHANGE FROM EXPORT TURNOVER WITHIN SIX MONTHS FROM THE END OF T HE PREVIOUS YEAR IN TERMS OF CONDITION STIPULATED UNDER S.10A(3) OF THE ACT. IN THIS CONNECTION, THE LEARNED AR FOR THE ASSESSEE SUBMITT ED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF SOFTWARE AND PROVIDING INFORMATION TECHNOLOGY ENABLED SERVICES. THE ASSESSEE HAD CLAIMED EXEMPTION UNDER S.10A OF THE ACT ON 100% EX PORT OF SUCH COMPUTER SOFTWARE (IT SOFTWARE & IT ENABLED SERVICE S). THE AO RESTRICTED THE EXEMPTION UNDER S.10A OF THE ACT AND DENIED EXEMPTION ON PROFITS ATTRIBUTABLE TO CONVERTIBLE FOREIGN EXCH ANGE BROUGHT INTO INDIA AFTER SIX MONTHS FROM THE END OF THE RELEVANT FINANCIAL YEAR. THE CIT(A) ALSO SUSTAINED THE ACTION OF THE AO IN FIRST APPEAL. ADDRESSING THE CONTROVERSY, THE LEARNED AR REFERRED TO PROVISI ONS OF SECTION 10A(3) OF THE ACT AND SUBMITTED THAT AN ASSESSEE UN DERTAKING IS ELIGIBLE FOR DEDUCTION / EXEMPTION UNDER S.10A IF T HE SALE PROCEEDS OF ARTICLES OR THINGS OR COMPUTER SOFTWARE EXPORTED OU T OF INDIA ARE RECEIVED IN OR BROUGHT INTO INDIA BY THE ASSESSEE I N CONVERTIBLE FOREIGN EXCHANGE WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. THE LEARNED AR POINTED OUT T HAT THE PERIOD OF SIX MONTHS IS THEREFORE EXTENDABLE BY SUCH FURTHER PERI OD AS THE COMPETENT AUTHORITY MAY ALLOW. THE LEARNED AR THEREAFTER REF ERRED TO THE MASTER CIRCULAR NO.10/2011-12 DATED 1 ST JULY, 2011 ISSUED BY THE RESERVE BANK OF INDIA (COMPETENT AUTHORITY) AS ANNEXED IN T HE PAPER BOOK AND SUBMITTED THAT AS PER THE MASTER CIRCULAR THE STIPU LATED PERIOD FOR RECEIPT OF SALE PROCEEDS BY 100% EXPORT ORIENTED UN ITS HAS BEEN EXTENDED WHEREBY SUCH UNDERTAKINGS ARE GIVEN LIBERT Y TO REALIZE EXPORT ITA NO.826/AHD/15 [M/S. PERSOURCE VS. JT.CIT] A.Y. 2011-12 - 3 - PROCEEDS WITHIN A PERIOD OF TWELVE MONTHS FROM THE DATE OF EXPORT ON OR AFTER SEPTEMBER 1 ST , 2004. IT IS THE CASE OF THE ASSESSEE THAT THE ASSESSEE HAS REALIZED THE SALE PROCEEDS WITHIN THE EXTENDED PERIOD OF TWELVE MONTHS FROM THE DATE OF EXPORT. THE LEARNED AR THUS SUBMITTED THAT IN VIEW OF THE RELAXATION PROVIDED B Y THE MASTER CIRCULAR ISSUED BY THE COMPETENT AUTHORITY, THE ASS ESSEE IS ENTITLED TO RELIEF UNDER S.10A OF THE ACT. THE LEARNED AR ACCO RDINGLY SUBMITTED THAT THE ACTION OF THE AO AND CIT(A) IN WRONGFUL DE NIAL OF EXEMPTION/DEDUCTION UNDER S.10A OF THE ACT REQUIRES TO BE SET ASIDE AND CLAIM OF THE ASSESSEE IN THIS REGARD REQUIRES T O BE UPHELD. 3. THE LEARNED DR, ON THE OTHER HAND, RELIED UPON T HE ORDERS OF THE LOWER AUTHORITIES. 4. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. THE SUBSTANTIVE ISSUE INVOLVED IN THE PRESENT CASE IS T OWARDS MAINTAINABILITY OF EXEMPTION/DEDUCTION UNDER S.10A OF THE ACT WHERE THE SALE PROCEEDS OF CONVERTIBLE FOREIGN EXCHANGE H AVE BEEN RECEIVED OR BROUGHT INTO INDIA AFTER SIX MONTHS FROM THE END OF THE FINANCIAL YEAR BUT WITHIN THE EXTENDED PERIOD ALLOWED BY THE COMPETENT AUTHORITY NAMELY RBI IN TERMS OF MASTER CIRCULAR OF GENERAL NATURE. A PERUSAL OF THE MASTER CIRCULAR CLEARLY SHOWS THAT T HE COMPETENT AUTHORITY HAS EXTENDED THE PERIOD OF OBLIGATION CAS T UPON THE EXPORTERS TO RECEIVE AND BRING CONVERTIBLE FOREIGN EXCHANGE I N INDIA WITHIN TWELVE MONTHS FROM THE DATE OF EXPORT. THUS, IN OU R VIEW, DEDUCTION UNDER S.10A OF THE ACT CANNOT BE DENIED WHERE THE E XTENDED PARAMETERS FOR REALIZATION OF EXPORT PROCEEDS AS SE T OUT BY THE COMPETENT AUTHORITY HAS BEEN DULY MET. THEREFORE, THE CLAIM OF THE ASSESSEE TOWARDS EXEMPTION/DEDUCTION UNDER S.10A OF THE ACT REQUIRES TO BE UPHELD ON FIRST PRINCIPLES. HOWEVER, IT WILL BE OPEN TO THE AO TO VERIFY WHETHER THE EXPORT PROCEEDS HAVE BEEN RECEIV ED WITHIN TWELVE ITA NO.826/AHD/15 [M/S. PERSOURCE VS. JT.CIT] A.Y. 2011-12 - 4 - MONTHS FROM THE DATE OF EXPORT IN TUNE WITH MASTER CIRCULAR. THE ISSUE IS THEREFORE RESOLVED IN FAVOUR OF THE ASSESS EE ON PRINCIPLES. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. SD/- SD/- (RAJPAL YADAV) (PRADI P KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 09/08/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 09/08/20 18