Honeywell Technology Solutions Lab Private Limited, Bangalore V. Assistant Commissioner of Income-tax, Circle 3(1)(2), Bangalore

MA 30/BANG/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 4918 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH

Judgement Text

MP NO.30/BANG/2020 M/S. HONEYWELL TECHNOLOGY SOLUTIONS LAB PVT. LTD., BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER M.P. NO.30/BANG/2020 (ARISING OUT OF ITA NO.977/BANG/2015) ASSESSMENTYEAR: 2009-10 M/S. HONEYWELL TECHNOLOGY SOLUTIONS LAB PRIVATE LIMITED BOGANAHALLI VILLAGE SURVEY NO.72/5, DODDAKANANAHALLI VILLAGE VARTHURHOBLI BENGALURU EAST TALUK BENGALURU-560 103 PAN NO : AAACH4151J VS. ACIT CIRCLE-3(1)(2) BANGALORE APPELLANT RESPONDENT APPELLANT BY : SMT. SHREYA LOYALKA, A.R. RESPONDENT BY : SHRI MANJEET SINGH, D.R. DATE OF HEARING : 16.10.2020 DATE OF PRONOUNCEMENT : 16.10.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON SUBMITTING THAT THERE ARE CERTAIN MISTAKES APPARENT FROM RECORD IN THE ORDER DATED 12.7.2019 PASSED IN ITA NO.977/BANG /2015. 2. THE LD. COUNSEL APPEARING FOR THE ASSESSEE SUBMI TTED THAT THE ASSESSEE HAS RAISED A GROUND BY WAY OF GROUND N O.3 CONTESTING MP NO.30/BANG/2020 M/S. HONEYWELL TECHNOLOGY SOLUTIONS LAB PVT. LTD., BANGALORE PAGE 2 OF 3 THE DISALLOWANCE OF MARKED TO MARKET LOSS OF RS.1 4.40 CRORES. SHE SUBMITTED THAT THE TRIBUNAL HAS ADJUDICATED THE ABOVE SAID ISSUE IN PARA 7.2 OF THE IMPUGNED ORDER. THE LD. A .R. SUBMITTED THAT THE TRIBUNAL HAS OBSERVED THAT IT IS REQUIRED TO EXAMINE WHETHER THE EXPORT PROCEEDS HAVE BEEN RECEIVED WITH IN THE TIME ALLOWED FOR FILING RETURN OF INCOME UNDER THE INCOM E TAX ACT. THE LD. A.R. SUBMITTED THAT CLAIM FOR DEDUCTION OF MAR KED TO MARKET LOSS IS NOT CONNECTED WITH THE CONDITION THAT THE EXPORT PROCEEDS SHOULD BE RECEIVED WITHIN THE TIME ALLOWED FOR FILI NG RETURN OF INCOME UNDER THE INCOME TAX ACT. ACCORDINGLY, THE LD A.R SUBMITTED THAT, TO THAT EXTENT SUBMITTED ABOVE, THE OBSERVATIONS MADE BY THE TRIBUNAL IS NOT RELATED TO THE ISSUE AN D SAME CONSTITUTES MISTAKE APPARENT FROM RECORD. THE LD. A.R. FURTHER SUBMITTED THAT THE TAX AUTHORITIES HAD DISALLOWED T HIS CLAIM HOLDING THAT THE MARKED TO MARKET LOSS IS A NOTIONAL LOSS. THE ASSESSEE HAD CONTENDED THAT IT IS NOT A NOTIONAL LOSS. HOWEVER, IN THE FIRST LINE OF PARA 7.2 OF THE ORDER, THE WORD NOT IS MISSING. ACCORDINGLY, THE LD. A.R. PRAYED THAT ABOVE SAID MISTAKES BE RECTIFIED. 3. WE HEARD LD. D.R. ON THIS ISSUE AND HE DID NOT O BJECT TO THE PETITION FILED BY THE ASSESSEE. ACCORDINGLY, PARAG RAPH 7.2 IS SUBSTITUTED BY THE FOLLOWING PARAGRAPH: 7.2 THE LD. A.R. MADE SUBMISSIONS ON LOSS BEING MARKED TO MARKET, THE CONTENTION OF THE LD. A.R. IS THAT IT IS ARGUED THAT IT IS NOT NOTIONAL LOSS AND FILED DE TAILS AND JUDICIAL DECISIONS IN SUPPORT OF CLAIM. THE LD. A. R. RELIED ON THE OBSERVATIONS OF THE TRIBUNAL IN THE CASE OF (2013) 35 TAXMANN.COM 553 WHERE THE ASSESSEE ENTERED INTO FOREIGN EXCHANGE CONTRACT AND SUCH CONTRACTS ARE INCIDENTAL TO THE EXPORT BUSINESS AND INCURRED LOSS AND SUCH CONTRACTS ARE CONTRACT LOSS WHICH ARE NOT SPEC ULATIVE MP NO.30/BANG/2020 M/S. HONEYWELL TECHNOLOGY SOLUTIONS LAB PVT. LTD., BANGALORE PAGE 3 OF 3 BUT BUSINESS LOSS. THE CONTENTION OF THE LD. A.R. IS THAT THIS IS ALLOWABLE WHEREAS WE ARE OF THE OPINION THA T HEDGING SHOULD NOT BE MORE THAN THE RECEIVABLES. WHEREAS THE LD. A.R. SUBMITTED THAT IT IS WITHIN LI MITS OF EXPORTS AND SUBSTANTIATED WITH MATERIAL IN THE PAPE R BOOK. THE LEARNED DR SUBMITTED THAT THESE FACTS AR E TO BE VERIFIED AND THE MATTER HAS TO BE EXAMINED. ACCORDINGLY, WE ARE OF THE SUBSTANTIVE OPINION THAT THE MATTER HAS TO BE RESTORED BACK TO THE FILE OF THE A .O. FOR VERIFICATION OF FACTS AS ENVISAGED IN THE COURSE OF HEARING. ACCORDINGLY, THIS GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 4. IN THE RESULT, THE MISCELLANEOUS APPLICATION FIL ED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH OCT, 2020 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 16 TH OCT, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE