ITO WD 8(3)(2), V. SOLIX TECHNOLOGIS LTD,

MA 183/MUM/2012

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 9168 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2002-2003
• Appeal Filed On: 20-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K H KUTTY
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI I.P.BANSALJUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER M.A.NO..183/MUM/2012 (ARISING OUT OF ITA NO.611/MUM/2008,A.Y.2002-03) THE INCOME TAX OFFICER, WARD 8(3) (2), MUMBAI (APPLICANT) VS. M/S. SOLIX TECHNOLOGIES LTD., 201A, SANGEET PLAZA, MAROL MAROSHI RD., ANDHERI (E), MUMBAI - 400 059. PAN: AACCA 5943 R (RESPPONDENT) APPLICANT BY : SHRI K.H.KUTTY RESPONDENT BY : SHRI K.GOPAL DATE OF HEARING : 21/09/2012 DATE OF PRONOUNCEMENT : 2 1/09/2012 ORDER PER I.P.BANSAL, J.M VIDE MISCELLANEOUS APPLICATION FILED AS ABOVE REV ENUE HAS CLAIMED THAT THE TRIBUNAL HAS FAILED TO CONSIDER GROUND NO. 2 RAISED BY THE REVENUE. THEREFORE, THE ORDER DATED 22/5/2009 PASSED BY THE TRIBUNAL IN ITA NO.61/MUM/2008 SUFFERS FROM MISTAKE WHICH IS APPAR ENT FROM RECORD AND SHOULD BE RECTIFIED. 2. FOLLOWING TWO GROUNDS WERE TAKEN BY THE REVENUE FOR CONSIDERATION OF THE TRIBUNAL IN THE AFOREMENTIONED APPEAL: (A) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF DE DUCTION U/S. 10A ON PROFIT ON ACCOUNT OF FOREIGN EXCHANGE CLAIM OF RS. 8,09,074/- (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS EL IGIBLE FOR DEDUCTION M.A.NO..183/MUM/2012 2 U/S. 10A WITHOUT CONSIDERING THE FACTS BROUGHT OUT BY THE AO EMERGED ON SCRUTINY AS MENTIONED IN THE REMAND REPORT U/S. 250(4). 3. THE TRIBUNAL IN ITS ORDER WHILE WRITING THE GRI EVANCE OF THE ASSESSEE IN PARA 2 HAS OBSERVED AS UNDER: 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF DEDUCTION U/S. 10A ON PROFIT ON ACCOUNT OF FOREIGN EXCHANGE GAIN OF RS. 8,09,074/- AND ALSO HO LDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 10A WITHOUT CONSIDERING THE FACTS BROUGHT OUT BY THE ASSESSING OFFICER EMERGING ON SCRUTINY AS MENTIONED IN REMAND REPORT U/S. 250(4). 4. AFTER NOTING THE FACTS OF THE CASE TRIBUNAL HAS DISPOSED OF THE ISSUE IN FAVOUR OF THE ASSESSEE ON THE BASIS OF SPECIAL BENC H DECISION IN THE CASE OF ACIT VS. PRAKASH L. SHAH 306 ITR (AT) 80 (MUM) (SB) , WHEREIN IT WAS HELD THAT THE FOREIGN EXCHANGE GAIN PERTAINING TO EXPOR T IS A PART OF TURNOVER AND IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 HHC OF T HE INCOME TAX ACT, 1961 (THE ACT). 5. THE ASSESSEE IN THE PRESENT CASE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A, WHICH HAS BEEN ALLOWED BY THE AO TO A SUM OF R S. 7,69,10,276/- AFTER EXCLUDING INTER-ALIA FOREIGN EXCHANGE OF RS. 8,09, 074/-. WHILE EXCLUDING THIS AMOUNT FROM THE ELIGIBLE AMOUNT FOR DEDUCTION UNDER SECTION 10A THE OBSERVATION OF THE AO AS CONTAINED IN PARA- 6 OF TH E ASSESSMENT ORDER IS AS UNDER: ON PERUSAL OF P&L A/C. AND STATEMENT OF INCOME, IT IS SEEN THAT THE BUSINESS INCOME BEFORE CLAIM OF DEDUCTION U/S. 10A IS RS.8,19,08,500/-. THE ASSESSEE HAS RIGHTLY OFFERED INTEREST ON FIXED DEPOSITS UNDER THE HEAD INCOME FROM OTHER SOURCES, BUT THE MISCELLANEOUS IN COME OF RS.50,689/- AND FOREIGN EXCHANGE FLUCTUATION OF RS. 8,09,074/- HAS BEEN CONSIDERED BY THE ASSESSEE AS INCOME DERIVED FROM BUSINESS ACTIVI TY. 6. AS IT CAN BE SEEN FROM THE ABOVE OBSERVATION, TH E AO DID NOT EXCLUDE THIS AMOUNT FROM THE ELIGIBLE AMOUNT AVAILABLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT ON THE GROUND THAT THE FACTS STAT ED BY THE AO IN THE REMAND M.A.NO..183/MUM/2012 3 REPORT WERE NOT TAKEN INTO CONSIDERATION. THE ONLY BASIS OF THE AO FOR EXCLUDING THIS AMOUNT WAS THAT THE SAID GAIN DOES NOT FORM PART OF ELIGIBLE INCOME AS THE SAME IS ASSESSABLE AS INCOME FROM OTH ER SOURCES. THIS ISSUE WAS SET AT REST BY THE DECISION OF THE SPECIAL BE NCH REFERRED TO IN THE ORDER PASSED BY THE TRIBUNAL. IT CANNOT ALSO BE SAID THA T TRIBUNAL DID NOT TAKE INTO CONSIDERATION THE GRIEVANCE OF THE REVENUE AS MENTIONED IN PARA NUMBERED AS (B) AS WE HAVE REPRODUCED PARA 2 OF THE ORDER OF THE TRIBUNAL IN WHICH THIS GRIEVANCE IS ALSO MENTIONED. THE RE VENUE BY WAY OF MISCELLANEOUS APPLICATION IS NOW SEEKING TO IMPROV E THE CASE OF AO WHICH WAS NOT THE CASE OF AO AT THE TIME OF FRAMING THE ASSESSMENT. AS THE ISSUE HAS BEEN WELL CONSIDERED AND WHILE DECIDING THE SAM E THE DECISION OF SPECIAL BENCH HAS FOLLOWED, WE FIND NO MISTAKE IN THE ORDER OF THE TRIBUNAL AS HAS BEEN ALLEGED BY THE REVENUE. THE APPLICATIO N FILED BY THE REVENUE BEING DEVOID OF THE MATTER IS DISMISSED. 7. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON TH E 21 ST DAY OF SEPT. 2012 SD/- SD/- ( RAJENDRA ) (I.P.BANSAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 21ST SEPT ., 2012. COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RE BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM.