DCIT Corporate Circle 2(2), CHENNAI V. Ideal Fasteners (India) Pvt. Ltd., CHENNAI

ITA 971/CHNY/2018

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3971 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 21-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Section: 10AA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , . !'# ! , % !& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.971/CHNY/2018 ( )( / ASSESSMENT YEAR : 2014-15 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 2(2), CHENNAI - 600 034. V. M/S IDEAL FASTENERS (INDIA) PVT. LTD., C-5, PHASE II, 3 RD MAIN ROAD, TAMBARAM, CHENNAI - 600 034. PAN : AABCI 4462 Q (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : MS. S. VIJAYAPRABHA, JCIT -.+, / 0 / RESPONDENT BY : NONE 1 / 2% / DATE OF HEARING : 25.09.2018 3') / 2% / DATE OF PRONOUNCEMENT : 05.10.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -6, CHENNA I, DATED 28.12.2017 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2 I.T.A. NO.971/CHNY/18 2. NO ONE APPEARED FOR THE ASSESSEE WHEN THE APPEAL WAS TAKEN UP FOR HEARING. THEREFORE, WE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PROCEEDED TO DISPOSE THE APPEAL ON MERIT. 3. MS. S. VIJAYAPRABHA, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THERE IS NO PROVISION IN THE INCOME- TAX ACT TO REDUCE THE EXPENDITURE INCURRED IN FOREIGN CURRENCY FROM T OTAL TURNOVER ALSO FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTIO N 10AA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE LD. D.R. POINTED OUT THAT EXPLANATION- 2(IV) TO SECTION 10A OF THE ACT R EQUIRES ADJUSTMENT ONLY IN RESPECT OF EXPORT TURNOVER AND NOT TOTAL TU RNOVER. THEREFORE, ACCORDING TO THE LD. D.R., THE CIT(APPEALS) IS NOT CORRECT IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE THE EXPE NDITURE INCURRED BY THE ASSESSEE IN FOREIGN CURRENCY FROM THE TOTAL TURNOVER ALSO. 4. WE HEARD THE LD. D.R. AND PERUSED THE RELEVANT M ATERIAL AVAILABLE ON RECORD. THE NUMERATOR AND DENOMINATOR SHALL BE OF THE SAME FACTOR FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 10AA OF THE ACT. IF THE OVERSEAS TRAVEL AND COMMUN ICATION EXPENDITURE INCURRED BY THE ASSESSEE IN FOREIGN CUR RENCY WAS REDUCED FROM EXPORT TURNOVER, THE SAME SHALL ALSO B E REDUCED FROM TOTAL TURNOVER, OTHERWISE THE PROFIT OF THE ASSESSE E MAY NOT BE 3 I.T.A. NO.971/CHNY/18 CORRECTLY DETERMINED. WHAT IS TO BE EXCLUDED FROM THE EXPORT TURNOVER NEEDS TO BE EXCLUDED FROM THE TOTAL TURNOV ER ALSO. IN VIEW OF THE ABOVE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY TH E SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE COURT ON 5 TH OCTOBER, 2018 AT CHENNAI. SD/- SD/- (. !'# ! ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) % / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 5 TH OCTOBER, 2018. KRI. / -267 87)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 92 () /CIT(A)-6, CHENNAI 4. PRINCIPAL CIT-2, CHENNAI- 5. 7: -2 /DR 6. ( ; /GF.