ValueMomentum Software Services Private Limited, Hyd, Hyderabad V. DCIT, Circle-3(3), Hyd, Hyderabad

MA 31/HYD/2017

• Counselvise Citation: [2017] 124 COUNSELVISE.COM (IT) 5782 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 23-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 26-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMJI RAO
• Assessee Lawyers: D VENUGOPAL

Judgement Text

MA NO 31 OF 2017 VALUE MOMENTUM SOFTWARE SERVICES P LTD HYDERABAD PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD B BENCH, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER M.A. NO.31/HYD/2017 (ARISING OUT OF ITA NOS.320 & 321/HYD/2016) (ASSESSMENT YEARS: 2009-10 & 2010-11) M/S VALUE MOMENTUM SERVICES SOFTWARE P LTD HYDERABAD PAN: AAACI 7400 H VS DCIT CIRCLE 3(3) HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI D. VENUGOPAL FOR REVENUE : SHRI RAMJI RAO, DR O R D E R PER SMT. P. MADHAVI DEVI, J.M. THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSE SSEE SEEKING MODIFICATION OF THE TRIBUNALS ORDER DATED 30.11.2016 IN ITA NOS. 320 & 321/HYD/2016. 2. IT IS SUBMITTED BY THE LEARNED COUNSEL FOR THE A SSESSEE THAT THE ASSESSEE HAS FILED TWO APPEALS I.E. FOR TH E A.Y 2009-10 AND 2010-11 WHICH WERE HEARD TOGETHER AND DISPOSED OF BY A COMMON AND CONSOLIDATED ORDER DATED 30.11.2016. IT WAS FURTHER BROUGHT TO OUR NOTICE THAT FOR THE A.Y 2009-10, THE ISSUE WAS OF ALLOWABILITY OF THE FOREX GAIN ON ACCOUNT OF REINST ATEMENT OF BALANCE IN EEFC A/C U/S 10A OF THE ACT WHEREAS FOR T HE A.Y DATE OF HEARING : 04.08.2017 DATE OF PR ONOUNCEMENT : 23.08.2017 MA NO 31 OF 2017 VALUE MOMENTUM SOFTWARE SERVICES P LTD HYDERABAD PAGE 2 OF 3 2010-11 THE ISSUE WAS ALLOWABILITY OF THE FOREX GAI N IN RESPECT OF FORWARD CONTRACT U/S 10A OF THE ACT. THUS, THE ISSU E WAS DIFFERENT IN THE TWO A.YS. IT IS SUBMITTED INADVERTENTLY THIS TRIBUNAL HAS DISMISSED THE ASSESSEES GROUND OF APPEAL NO.2 FOR THE A.Y 2010- 11 BY RELYING ON ITS ORDER FOR THE GROUND NO.2 FOR A.Y 2009-10. IT IS FURTHER BROUGHT TO OUR NOTICE THAT THE ASSESSEE S GROUNDS OF APPEAL NO. 2 & 3 FOR THE A.Y 2010-11 ARE ON THE SAME ISSUE OF FOREX GAIN ON FORWARD CONTRACTS AND THIS TRIBUNAL H AS ERRONEOUSLY DISMISSED THE GROUND NO.2 WHILE GROUND NO.3 WAS ALL OWED. THUS, ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THERE IS A MISTAKE APPARENT FROM THE RECORD OF THE ORDER OF TH E TRIBUNAL WHICH NEEDS RECTIFICATION. 3. THE LEARNED DR WAS ALSO HEARD. 4. ON GOING THROUGH THE MATERIAL ON RECORD AND ALSO THE ASSESSEES CONTENTION AT LENGTH, WE FIND THAT THE I SSUE FOR THE A.Y 2009-10 WAS WITH REGARD TO ALLOWABILITY OF FOREX GA IN ON REINSTATEMENT OF EEFC A/C AS DEDUCTION U/S 10A OF T HE ACT AND THIS GROUND WAS REJECTED FOLLOWING THE DECISION OF THE COORDINATE THIRD MEMBER BENCH OF THE TRIBUNAL AT AHMEDABAD IN THE CASE OF BANYAN CHEMICALS LTD REPORTED IN (2009) 117 ITD 376 (AHD.). THEREAFTER, WHILE DEALING WITH THE ASSESSEES APPEA L FOR THE A.Y 2010-11, THE GROUND OF APPEAL NO.2 HAS BEEN DISMISS ED BY FOLLOWING THE TRIBUNALS ORDER EVEN DATED IN THE AS SESSEES OWN CASE FOR A.Y 2009-10. THUS, WE AGREE THAT THERE HAS BEEN A MISTAKE COMMITTED WHILE DISPOSING OF THE GROUND OF APPEAL NO.2. IN VIEW OF THE SAME, WE MODIFY THE ORDER OF THE TRI BUNAL DATED 30.11.2016 BY MODIFYING PARA NOS. 9 & 10 AS UNDER: MA NO 31 OF 2017 VALUE MOMENTUM SOFTWARE SERVICES P LTD HYDERABAD PAGE 3 OF 3 9. WITH REGARD TO GROUNDS NO 2 & 3, BRIEF FACTS ARE THAT THE ADMITTED A FOREIGN EXCHANGE GAIN OF RS.92,14,471 DERIVED ON FORWARD CONTRACTS AS DEDUCTION U/S 10A OF THE ACT. THE ASSESSEE EXPLAINED THAT THE SAME WAS DERIVED FROM FORWARD CONTRACTS. OBSERVING THAT THESE GAINS ARE NOT DERIVED FROM THE BUSINESS OF EXPORT OF SOFTWARE, THE AO TREATED THIS INCOME AS INCOME FROM OTHER SOURCES AND DISALLOWED THE CLAIM OF DEDUCTION U/S 10A. 10. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US 5. ACCORDINGLY, THE ORDER OF THE TRIBUNAL IS MODIFI ED AND THE M.A. FILED BY THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, M.A FILED BY THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD AUGUST, 2017. SD/- SD/- (S.RIFAUR RAHMAN) ACCOUNTANT MEMBER (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 23 RD AUGUST, 2017. VINODAN/SPS COPY TO: 1 SRI D.VENUGOPAL, CA, FLAT NO.306, VIJAYASREE APARTME NTS, NAGARJUNA NAGAR COLONY, AMEERPET, HYDERABAD 500073 500084 2 DY. COMMISSIONER OF INCOME TAX, 17(2) ROOM NO.913, 9TH FLOOR, SIGNATURE TOWERS, OPP: BOTANICAL GARDEN, KONDAPUR H YDERABAD 500084 3 CIT (A)-5 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER