HEF INDIA PRIVATE LIMITED, CHENNAI V. ACIT COMPANY RANGE II, CHENNAI

ITA 848/CHNY/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9241 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 09-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M SRINIVASA RAO
• Assessee Lawyers: SRINARAYANA JAKHOTIA
• Keywords: Set aside
• Section: 80HHC

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , ! ' # , % #& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NOS.848 & 1043/CHNY/2018 ) *) / ASSESSMENT YEARS : 2004-05 & 2003-04 M/S HEF INDIA PVT. LTD., CHITRA TOWERS, 120, 2 ND FLOOR, ABOVE FURN WORLD, ARCOT ROAD, KODAMBAKKAM, CHENNAI - 600 024. PAN : AAACH 7456 A V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY RANGE-II, THE INCOME TAX OFFICER (OSD), COMPANY RANGE II(2), CHENNAI - 600 034. (,-/ APPELLANT) (./,-/ RESPONDENT) ,- 0 1 / APPELLANT BY : SHRI SRINARAYANA JAKHOTIA, CA ./,- 0 1 / RESPONDENT BY : DR. M. SRINIVASA RAO, CIT 2 0 3% / DATE OF HEARING : 06.03.2019 45* 0 3% / DATE OF PRONOUNCEMENT : 01.04.2019 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER : BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGA INST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 13, CHENNAI, DATED 15.12.2017 AND 08.11.2017 RESPEC TIVELY, FOR THE ASSESSMENT YEARS 2004-05 AND 2003-04. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE APPEALS, WE HE ARD THESE APPEALS TOGETHER AND DISPOSING THE SAME BY THIS COM MON ORDER. 2 I.T.A. NOS.848 & 1043/CHNY/18 2. SHRI SRINARAYANA JAKHOTIA, THE LD. REPRESENTATIV E FOR THE ASSESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERATION IS EXCLUSION OF FOREIGN EXCHANGE GAIN DUE TO FLUCTUATI ON ON EXPORT, FROM THE EXPORT TURNOVER BY APPLYING EXPLANATION (B AA) TO SECTION 80HHC OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE AC T'). ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSEES ONLY BUSINES S IS EXPORT. DUE TO FOREIGN EXCHANGE FLUCTUATION, ACCORDING TO THE L D. REPRESENTATIVE, THE MONEY BROUGHT TO INDIA WAS MORE THAN WHAT WAS O RIGINALLY EXPECTED. THE ASSESSING OFFICER REFUSED TO TAKE TH E MONEY BROUGHT TO INDIA WHICH WAS OVER AND ABOVE WHAT WAS ORIGINAL LY AGREED BETWEEN THE PARTIES ON THAT GROUND THAT IT IS THE M ISCELLANEOUS INCOME. ACCORDING TO THE LD. REPRESENTATIVE, THE E XPORT PROCEEDS WERE BROUGHT TO INDIA AND THE GAIN OUT OF FLUCTUATI ON IN FOREIGN EXCHANGE IS ALSO PART OF EXPORT TURNOVER. THEREFOR E, ACCORDING TO THE LD. REPRESENTATIVE, THE ASSESSING OFFICER IS NO T JUSTIFIED IN EXCLUDING THE GAIN OUT OF FOREIGN EXCHANGE FLUCTUAT ION BY APPLYING EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT WHILE COMPUTING THE TAXABLE INCOME. 3. WE HEARD DR.M. SRINIVASA RAO, THE LD. DEPARTMENT AL REPRESENTATIVE ALSO. IT IS NOT IN DISPUTE THAT THE MONEY BROUGHT TO 3 I.T.A. NOS.848 & 1043/CHNY/18 INDIA WAS ON EXPORT. THE SO-CALLED PROFIT NOW SOUG HT TO BE EXCLUDED BY THE ASSESSING OFFICER IS ADMITTEDLY DUE TO FOREI GN EXCHANGE RATE FLUCTUATION. THEREFORE, THIS TRIBUNAL IS OF THE CO NSIDERED OPINION THAT THE PROFIT DUE TO FOREIGN EXCHANGE RATE FLUCTUATION WOULD ALSO FORM PART OF TOTAL TURNOVER. HENCE, THE ASSESSING OFFIC ER IS NOT JUSTIFIED IN EXCLUDING THE SAME BY APPLYING EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT. THEREFORE, WE ARE UNABLE TO UPHO LD THE ORDERS OF THE LOWER AUTHORITIES. ACCORDINGLY, ORDERS OF BOTH THE AUTHORITIES BELOW ARE SET ASIDE AND THE ASSESSING OFFICER IS DI RECTED NOT TO EXCLUDE THE PROFIT ARISING FROM FOREIGN EXCHANGE FL UCTUATION WHILE COMPUTING THE ELIGIBLE DEDUCTION UNDER SECTION 80HH C OF THE ACT. 4. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 ST APRIL, 2019 AT CHENNAI. SD/- SD/- ( ! ' # ) ( . . . ) (INTURI RAMA RAO) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 1 ST APRIL, 2019. KRI. 4 I.T.A. NOS.848 & 1043/CHNY/18 0 .389 :9*3 /COPY TO: 1. ,- /APPELLANT 2. ./,- /RESPONDENT 3. 2 ;3 () /CIT(A)-13, CHENNAI 4. PRINCIPAL CIT-2, CHENNAI-34 5. 9< .3 /DR 6. ) = /GF.