TOPPAN MERRILL TECHNOLOGY SERVICES PRIVATE LIMITED,CHENNAI V. INCOME TAX OFFICER, NUNGAMBAKKAM, CHENNAI

CO 48/CHNY/2024

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The case involves Toppan Merrill Technology Services Pvt Ltd., a 100% Export Oriented Unit, which claimed a deduction under section 10A of the Income Tax Act for the assessment year 2009-10. The deduction was initially allowed but later contested by the revenue following a revision under section 263 by the PCIT, which directed a re-assessment. The AO restricted the deduction to exports realized within six months from the end of the financial year, leading to an addition to the income. The CIT(A) reversed this decision, accepting the assessee's claim that the exports were realized within twelve months as per the RBI Master Circular. The revenue appealed against this decision, which was dismissed by the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39007 (ITAT-CHENNAI)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Other Referred Cases: Morgan Stanley Advantage Services (P.) Ltd, Agnite Education Limited, HCL EAI Services. Ltd, Maars Software International Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: . SAMANTHA MULLAMUDI
• Assessee Lawyers: AMULYA
• Keywords: Set aside; Additional evidence; Assessment record; Competent authority
• Section: 143(3); 263; 13

Judgement Text

" आयकर अपीलीय अिधकरण,‘ए’ Ɋायपीठ,चेɄई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस एस िवʷनेũ रिव, Ɋाियक सद˟ एवं ŵी एस.आर.रघुनाथा, लेखा सद˟ क े समƗ BEFORE SHRI S.S. VISWANETHRA RAVI, HON’BLE JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, HON’BLE ACCOUNTANT MEMBER आयकरअपील सं/.ITA No.: 1526/Chny/2024 & C.O No. 48/Chny/2024 (in ITA No: 1526/Chny/2024) िनधाŊरणवषŊ / Assessment Year: 2009-10 Income Tax Officer, Corporate Ward 3(3), Room No. 412, Wanapathy Block, 121, Numgambakkam High Road, Chennai – 600 034. Tamil Nadu. Vs. Toppan Merrill Technology Services Private Limited, Chennai Phase III, Fortius Tower, 5th floor Olympia Technology Park, Guindy Industrial Estate, S.O Guindy, Chennai – 600 032. [PAN: AAECM6364J] (Appellant) (Respondent/Cross Objector) Department by : Mr. Smt. Samantha Mullamudi, Addl.CIT Assessee by : Ms. Amulya, CA सुनवाई की तारीख/Date of Hearing : 12.12.2024 घोषणा की तारीख /Date of Pronouncement : 31.01.2025 आदेश/ O R D E R PER S. R. RAGHUNATHA, ACCOUNTANT MEMBER: This appeal filed by the revenue and Cross Objections by the assessee are directed against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi, dated 08.02.2024 and pertains to assessment year 2009-10. ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. 2. The grounds of appeal raised by the Revenue are as under: “1. The order of the CIT(A) is contrary to the fact and circumstances of the case. 2. The ld.CIT(A) erred in deleting the disallowance made by the Assessing Officer by relying upon the Reserve Bank of India Master circular No.9/2009-10 dated 01.07.2009 without appreciating the provisions of clause 5 of section 10A of the IT Act. 2.1. The ld.CIT(A) failed to appreciate the fact that when Form No.56F was filed by the assessee along with Return of Income the Foreign remittance of Rs. 12,13,66,006/- was not received by the assessee. 2.2. The ld.CIT (A) failed to appreciate the fact that when Form No.56F was filed by the assessee along with Return of Income the Foreign Inward remittance of Rs.12,13,66,006/- was not received by the assessee and in view of the same the claim of deduction made u/s 10A was correct & hence not admissible. 2.3. Theld.CIT(A) failed to appreciate the column 16 (iii) of Form no.56F which read as “Specify the amount and the relevant previous year in case such amount is brought into India in convertible foreign exchange beyond the period of six months from the end of relevant previous year and with the approval of competent authority, where such amount related to any other previous year. Also state the name of the authority and the period up to which the approval was accorded.”It implies that amount received after six months from the end of previous year with the approval of the competent authority, has to be claimed in the year in which it was received. 3. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the Ld.CIT(A) be set aside and that of the Assessing Officer be restored.” 3. The assessee filed a Cross-objections with the following grounds: 1. The lower authorities erred in finalizing an order of assessment which suffers from legal defects such as being contrary to the provisions of the Act, devoid of merits, contrary to facts on record and applicable law, and it therefore erroneous and invalid in so far as it is prejudicial to the Responent and it liable to be quashed as such. 2. The Impugned proceedings, the assessment order dated 28.08.2014, and the order of the Ld.CIT(A) dated 08.02.2024, all the which were passed in consequence of a non-est revision order dated 18.03.2014 are invalid, non-est, and void-ab-initio and are liable to be quashed as such. 3. The order passed by the Ld.CIT u/s. 263 of the Act is without jurisdiction on account of not satisfying the twin conditions prescribed therein, i.e., ‘erroneous’ and ‘prejudicial to the interests of the Revenue’, and hence is invalid, non-est and void-ab-initio. ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. 4. Brief facts of the case the assessee is the Private Limited Company engaged in the business of providing outsourcing services for business operations and system operations including IT- helpdesk, software development and support servicesto its group company. It is registered under the software Technology Park scheme of the Government of India as 100 percent Export Oriented Unit (100% EOU). The Assessee filed its return of income for the Assessment year 2009-10 on 20.09.2009 declaring the total income of Rs. 42,980/- after claiming a deduction of Rs.16,90,55,063/- u/s. 10A of the Income Tax Act, 1961 and income of Rs. 14,64,17,697/- offering u/s.115JB of the Act. After the return of income processed u/s.143(1) of the Act, the Assessee’s case was selected the scrutiny and passed an order u/s. 143(3) of the Act, by accepting the return of income on 31.03.2013. Later, the Ld. PCIT issued the Show cause notice forinitiation of proceedings u/s.263 of the Act and passed an order dated 18.03.2014 and held that the Assessing Officer has failedto conduct proper enquiries and therefore the Ld.PCIT set aside the assessment order passed u/s. 143(3) of the Act, dated 31.03.2013 and directed the Assessing Officer to conduct further enquires to match every invoices vis-à-vis realization vide FIRC’s filedby the assessee and then pass an order fresh and denovo. Subsequently, the Assessing officer passed an order u/s.143(3) r.w.s 263 of the Act, dated 28.08.2014 making an addition to the total ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. income amounting to Rs.6,07,53,695/- as the export proceeds are realized after 6 months from the date of exports. Aggrieved by the order of the Assessing Officer the assessee preferred an appeal before the Ld.CIT(A), NFAC, New Delhi. 5. Before the Ld.CIT(A), the assessee submitted the detailed reply along with the receipts for having realized the export proceeds within the time limitprescribed in the Master Circular of the RBI to claim the deduction u/s.10A of the Act.After careful consideration of the reply filed by the assessee,the Ld.CIT(A)has passed an order dated 08.02.2024 by considering that the claim of the assessee that amounts have been realized from the export proceedswithin the time limit prescribed in the Master Circular of the RBI and hence eligible for claiming deduction u/s.10A of the Act, by holding as under: “The AO has further pointed out that the payments realized as the FIRCs have the description that the payments were made to the appellant as advances and not for rendering services. Since, the appellant is having only one customer and the payments received cannot be considered as advance when there being outstanding invoices for realization. Here in the case, it is pertinent of mention that the FIRCs are being issued by the bank and mere mentioning of advances by the bank in the FIRCs does not change the nature of the transactions that have been taken place between the customer and the appellant. However, as per the assessment order the AO has considered the payments which were realized within 6 months i.e. upto the end of September 2009 for the purpose of export turnover even though the FIRCs has mentioned as advance. Thus, the stand taken by AO in considering some payments as eligible but rejecting similar nomenclature in other FIRCs though everywhere the uniformly mentioned the word 'Advance' instead of the phrase 'payment against the services received' obviously not right. The differential ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. treatment given to the same language used in FIRCs against the payments received before 6 months from the end of the financial year 2008-09 and payments received within a period of 12 months from the date of raising export invoices. Since assessee is catering the services only to one company in abroad, any receipt in the form of inward remittance to India shall be treated as payment against the outstanding amount in chronological fashion. In this regard, it is important to see the outstanding amount or dues from the receiver of the services from the appellant at various point of times during the relevant period of importance in this case i.e., as on 01.04.2008, 31.03.2009, 30.09.2009 and period between 01.10.2009 to 31.03.2010. The assessee shall prove that it has received outstanding amount as on 01.04.2008 and proceeds of total export turnover of FY 2008- 09 on or before 31.03.2010 subjected to not exceeding 12 months from the date raising respective export invoice raised on or after 01.10.2008 to 31.03.2009. As per the information in impugned consequential order of the AO, the total amount of remittances into India shall be the equivalent to the outstanding amount from exports as on 01.04.2008 &exports made till the date specified in first column of table below shall be received on or before the dates mentioned in last column of the table below i.e., Date of Realisation. Date of invoice /Invoice No. Invoice Amount Date of Realisation USD Amount 17-Dec-08 186,744.00 9,153,753 16-12-2009 18-Jan-09 551,865.00 27,065,467 17-01-2010 18-Feb-09 798,947.00 40,044,292 17-02-2010 18-Mar-09 877,245.00 45,102,494 17-03-2010 Total 2,414,801.00 121,366,006 As seen from the data submitted by the appellant, the amount of export remittances receivable and received by the appellant are as under:- Sl.No Period Amount Outstanding/receivable from the clients (Rs.) Amount of remittances received (Rs.) Balance Receivable (Rs.) 1 As on 01.04.2008 8,48,37,603 8,44,80,395 3,57,208 2 Between 01.04.2008 to 31.03.2009 33,79,55,957 14,11,79,059 19,67,76,898 3 Between 01.04.2009 to 30.09.2009 19,67,76,898 10,25,41,411 9,42,35,487 ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. As seen from the above, the appellant hasto receive an amount of Rs.9,42,35,487/- on or before 12 months from the end of date of raising invoices. For the sake of convenience, the details of dates of raising invoices along with the amounts and the actual date of remittances received within 12months period are tabulated as under. Sl. No . Date of invoice Amount as per invoice Cumulativ e amount receivable Due date for remitta nce Amount received within 12 months from date of raising invoice Actual Cumulative amount received (1) 2 3 4 5 6 7 1 17-Dec-08 91,53,753 91,53,753 16-Dec-09 4,27,05,265 4,27,05,265 2 18-Jan-09 2,70,65,467 3,62,19,220 17-Jan-10 1,71,89,304 5,98,94,569 3 18-Feb-09 4,00,44,292 7,62,63,512 17-Feb-10 2,43,23,285 8,42,17,854 4 18-Mar-09 4,51,02,494 12,13,66,006 17-Mar-T0 1,68,79,930 10,10,97,784 As seen from the above, the appellant has received an amount of Rs.10,10,97,784/- as against the outstanding amount of Rs.9,42,35,487/- which pertains to the invoices raised in the FY 2008-09 within the time period allowed by the RBI Master circular from the date of issuance of the invoice. As per the method followed by the appellant i.e. the appellant is adjusting the dues from the single client against the remittances received without allocating specifically for individual invoices. In view of the above discussion and analysis, the contentions of the appellant are found to be true and accordingly, the grounds raised by the appellant against the reduction of deduction u/s.10A of the Act are allowed. Aggrieved by the order of the Ld.CIT(A) the revenue preferred an appeal before us. 6.The Ld.JCIT, DR stated that the Ld.CIT(A) has held in deleting the disallowance made by the Assessing Officer by relying upon the RBI Master Circular No.9/2009-10 dated 01.07.2009 without appreciating the provisions of clause 5 of section 10A of the Act. The Ld.DR also stated that the Ld.CIT(A) has failed the appreciate the fact that when form No.56F was filed by the assessee along with the return of Income the Foreign Inward remittance of Rs.12,13,66,006/- was not received by the ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. assessee and also that the assessee has not filled details in the column 16(iii) of Form No.56F by mentioning as Nil.Therefore, the Ld. DR prayed for setting aside the order of the Ld.CIT (A) by reinstatingthe Assessing Officer’s order. 7.Per Contra, the Ld. AR stated that the assessee has realized the entire exportproceeds within the time limit prescribed in the Master Circular of the RBI and hence, eligible for deduction u/s. 10A of the Act. The ld.AR stated that the Original Assessment was revised by the Ld. Principal Commissioner of Income Tax(\"Ld. PCIT\")under section 263 of the Act, vide the order dated March 18, 2014 wherein the Ld. PCIT held that an excess deduction was allowed under section 10A of the Act, to the extent of export proceeds which were not realised within 6 months from the end of the relevant financial year. The Ld. PCIT directed the Ld. AO to conduct further enquiries and pass an assessment order pursuant to the said order under section 263 of the Act, restricting the claim under section 10A of the Act.The Ld. AO, accordingly, passed an order of assessment dated August 28, 2014 under section 143(3) read with section 263 of the Act(“Impugned Order”)restricting the deduction under section 10A only to the extent of export proceeds that were realized within 6 months from the end of the financial year (i.e., rejecting the same in relation to the invoices realised after 6 months but within 12 months), resulting inan addition of Rs.6.07 Crores. 7.1 Aggrieved by the order of the AO, the assessee filed an appeal before the Commissioner of Income Tax Appeal (“the Ld.CIT(A)”) on ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. October 08, 2014. The Ld. CIT(A) after considering the detailed submissions and the evidences furnished before the AO (which formed part of the assessment records), deleted the disallowance made by the AO and allowed the assessee’s entire claim for deduction under section 10A of the Act, vide order dated February 08, 2024(Refer Pg. 10 of the Memorandum of Cross Objections): 7.2. The ld.AR submitted that it is not the case of the Revenue that the export proceeds were not realised. The Revenue did not dispute the realisation of some of the invoices (4 invoices) beyond 6 months but within 12 months. However, for the sake of completeness, the assessee furnished the following details to substantiate that the 4 invoices pertaining to December 2008 to March 2009 (being the disputed invoices under the present appeal) were realized within 12 months from the date of export. The relevant FIRCs were submitted in Pg.23 to 32 of the Paperbook. Month USD INR Realisation date Relevant FIRC Date FIRC NO December (Part amount) 186,744 9,153,753 1.3130908211-02269 2. 3130909231-02510 January 551,865 27,065,467 24-Sep-09 22-Oct-09 21-Oct-09 25-Nov-09 25-Sep-09 23-Oct-09 13-Nov-09 26-Nov-09 2.3130909231-02510 (same FIRC as above) 3.3130910211-02057 (23-Oct-09) 4.3130910211-02058 (23-Oct-09) 5.409102100092 6. 409112500006 February 798,947 40,044,292 23-Jul-09 25-Nov-09 04-Dec-09 24-Jul-09 26-Nov-09 05-Dec-09 7.3130907221-02025 6.409112500006 (As ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. 23-Dec-09 27-Jan-10 24-Dec-09 28-Jan-10 29-Jan-10 continued from the above FIRC) 8.409120300064 9.3130912221-02768 10. 410012700468 (27-Jan-10) 11. 410012700465 (27-Jan-10) March 877,245 45,102,494 27-Jan-10 17-Feb-10 24-Feb-10 29-Jan-10 18-Feb-10 25-Feb-10 11.410012700465 (As continued from the above FIRC) 12.410012700466 13. 410022400210 Total 2,414,801 121,366,006 Referring to the Paperbook filed, the Ld.AR submitted that all the relevant documents such as form 56F, invoice reconciliation (chart), copies of FIRCs etc.(placed at Pg. 6, 23 to 32 of the Paperbook), were furnished before the AO, which is evidenced from the Impugned Order and the Ld.CIT(A) Order. 7.3. The AO refers to the form 56F furnished by the assessee in Para 2 of the Impugned Order, and further, the reconciliation details extracted in Pg.3 of the Impugned Order demonstrate that these details were duly furnished by the assessee. The ld.CIT(A) categorically stated in his order, that all the relevant documents, invoice reconciliations and other relevant details were duly furnished before the AO, but the same were not appropriately considered by the AO. “… the AR of the assessee produced the details called for…” (Para 12) ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. “During the course of assessment proceedings, the appellant has furnished the reconciliation statement of the invoices and the amount realized, however, the AO has not considered the submission made by appellant and held that the payments received after September 2009 i.e. 6 months from the end of the previous year are not eligible to consider as export turnover as per section 10A of the Act.” (Para 15). 7.4. Hence, the Ld.AR submitted that the contention of the Ld. DR that the Ld.CIT(A) ought to have obtained a Remand Report from theAO in relation to the evidence relied upon, lacks any merit as no new evidence was furnished before the Ld. CIT(A). Further, it was highlighted that no grounds were raised in relation to Rule 46A of the Income tax Rules which provide for the manner in which the production of additional evidence before the Ld. CIT(A), and the requirement of obtaining a remand report. 7.5.Further, the ld. AR stated that in relation to the Ld. DR’s contention that the amounts realised beyond 6 months from the end of the year were not reported under clause 16(iii) of Form 56F,the said clause (Refer Pg. 8 of the Paperbook) is not applicable in the present case, and is not relevant for the determination of the eligibility to claim deduction under section 10A of the Act, for the Impugned AY. The said clause relates to the realization details of invoices relating to an earlier year(i.e., those which were not realised within the specified period and are realized in the Impugned AY”), while the dispute in the present case is in relation to the ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. invoices raised in the Impugned AY and realised beyond a period of six months in the subsequent year.Hence it was argued that this ground is devoid of any merit. 7.6. It was further argued by the Ld.AR that the invoices raised during the Impugned AY, amounting to Rs.12.14 Crores were realized beyond a period of six months but within a period of 12 months from the end of the year, was duly reported in clause 16(i) of form 56F, which deals with this aspect (i.e., it requires the reporting of whether the full consideration in convertible foreign exchange for exports made by the undertaking was brought into India within a period of six months from the end of the previous year). Hence, the contention of the revenue that the AO could not verify the claim as a result of non-reporting of the details is incorrect and contrary to the facts. 7.7. Without prejudice and notwithstanding the above, even if the reporting ought to be considered under clause 16(iii), it was submitted that it is a Certificate issued by an independent Chartered Accountant and is not prepared by the assessee. Hence, any reporting therein, under a different section, cannot be the basis for rejecting the assessee’s claim under section 10A of the Act. ‘Further Period’prescribedunder section 10A of the Act for realisation of export proceeds ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. As regards the prescribed period as per section 10A(3) of the Act, the ld.AR submitted that the said provisions clearly state that the proceeds to be realised within 6 months from the end of the previous year or within such period as the competent authority may allow in this behalf. Further the Explanation 1 to Section 10A(3)defines competent authority as the RBIor such other authority. The relevant extracts of which is provided below - “(3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.” Explanation 1. — For the purposes of this sub-section, the expression \"competent authority\" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. Hence, when a further period is prescribed by the relevant competent authority, the same is applicable and the period shall not be restricted to six months. RBI, being the regulatory authority under the Foreign Exchange Management Act, 1999, the further periodof12 months allowed by it for the realization of export proceeds, under RBI Circular No 9/2008-09 dated 1st July 2008, is applicable over the six-month period. 7.8. Further, it was submitted by the ld.AR that RBI has delegated the power of collection of receipts to the Authorized Dealers (“AD”), i.e., the receiving banks – HDFC Bank in the present ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. case. Hence, from a regulatory standpoint, the confirmation by the AD banker that the export proceeds for the Impugned AY were realized within the period allowed by the RBI ought to be considered, and the same ought not to be further questioned on unsubstantiated claims. In the present case, the confirmation letter dated April 25, 2015 issued by the AD Banker, stating that the invoices have been realized within the stipulated period of realization as per RBI Circular No 9/2008-09 dated 1st July 2008was also on record.(Refer Pg. 33 of the Paperbook) 7.9. As regards the requirement for a specific approval from the RBI, for realizing the export proceeds beyond 6 months, it was submitted that there is no such explicit requirement under the Act as discussed above. Further, wherever specific approvals are deemed necessary, such approval requirements have been prescribed by the RBI under various regulations. When no such requirement is prescribed, either under the Act or by the RBI, as a competent authority, there is no requirement for such specific approval, and the period stipulated by the RBI Circular in general is sufficient for the purpose of section 10A. This position is well settled and upheld in several rulings, some of which were relied upon by the Ld.AR, during the hearing – ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. - Hon’ble Bombay High Court in the case of Morgan Stanley Advantage Services (P.)Ltd – 13 taxmann.com 166– Sl. No. 2 of Case Law Compilation - Hon’ble Jurisdictional Tribunal in the case of Agnite Education Limited. (ITA 2026/Mds/2011) – Sl. No.1 of Case law compilation - Hon’ble Bangalore Tribunal in the case of HCL EAI Services. Ltd(35 taxmann.com146) –Sl. No. 3 of Case Law Compilation The Hon’ble HC in the case of Maars Software International Ltd (TCA No. 390 of 2009)held that, for the computation of deductible amount under section 10A of the Act, the ‘unrealized export proceeds’ that are deducted from the export turnover should also be deducted from the total turnover. Applying this position, the assessee is eligible for the entire claim of deduction allowed to it by the Ld. CIT(A). Hence, the Revenue’s appeal is rendered academic, as the alleged delayed realisation ought to be given parity in computing the deduction. (Refer Sl.No.4 of the Case Law Compilation). 7.10. Further the Ld.AR stated that the deduction to be allowed in the Impugned AY – even in the case of subsequent realization – Section 155(11A) of the Act: Without prejudice, Ld.AR by referring to the rectification provisions under section 155 (11A) of the Act, which permit the rectification of ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. the assessment order ‘of the year in which the invoice is raised’, to allow the benefit of deduction under section 10A of the Act upon subsequent realization of the invoices, where such claim was denied earlier on account of non-realisation within the prescribed period. Hence, even going by this, the ‘year in which the deduction is to be allowed’ is the year in which the corresponding invoice is raised, subject to realization, irrespective of the period during which it is realized. Hence, no interference is needed. The Ld.AR submitted that all the above aspects were duly considered by the Ld. CIT(A), for granting the said relief, as summarized below: a. Interpretation of Section 10A(3) of the Act – allows any period prescribed by the competent authority and is not restricted to 6 months. “Section 10A(3) of the Act stipulates that the period of realization is to be reckoned as 6 months from the end of the previous year or within the period as allowed by the competent authority i.e. Reserve Bank of India as clearly elaborated in Explanation 1 to the section 1 0A(3) of the Act.” (Para 17) b. Application of the provisions of section 10A(3) in the present case – the period of 12 months allowed by the RBI shall be considered. “In this case, it is clearly evident in the present case, that the RBI vide its Master Circular no. 09/2008-09 in F. No. RBl/2008-09/22 dated 01.07.2008 issued on export of goods and services w.e.f 03.06.2008 has enhanced the period of 6 months to twelve months, for realization of payments related to export proceeds… Thus, the ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. Appellant is eligible to consider the payments realized after September 2009 but well within the period of 12 months from the date of raising the invoice for the purpose of export turnover in claiming deduction u/s 10A of the Act” (Para 16). c. Applicability of the RBI Master Circular – General vs. specific “As per the interpretation of the explanation 1 of Section 10A given by Hon'ble ITAT and Hon'ble High courts as quoted in its written submissions of the Respondent, the RBI circular is applicable to all the assesses who are having the businesses of 100% export-oriented businesses and the extended time allowed by the RBI Master Circular (supra) is applicable to all eligible assessees who claims deduction u/s 10A of the Act. These assessees do not require specific permission from the RBI when the remittances are reached India on or before twelve months from date of raising the export invoice.” d. There is no dispute on the actual receipt of remittances within the 12-month period permitted by the RBI. “The Ld. AO had not pointed out specific remittances which are not received in India within 12 months from the invoice date.” e. The erroneous nomenclature of the remittances on the FIRC cannot be the basis for denial of the deduction claimed under section 10A of the Act “The AO has further pointed out that the payments realized as per the FIRCs have the description of ‘advances’ and not ‘for rendering services’. Since, the Respondent Company is having only one customer and the payments received cannot be considered as advance when there being outstanding invoices for realization. FIRCs are being issued by the bank and mere mentioning of advances by the bank in the FIRCs does not change the nature of the transactions that have been taken place between the customer and the Respondent Company. ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. Thus, the stand taken by AO in considering some payments as eligible but rejecting similar nomenclature in other FIRC though everywhere the uniformly mentioned the word 'Advance' instead of the phrase 'payment against the services received' obviously not right” (Para 17). 8. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. Admittedly, the assessee is a company registered under the software Technology Park scheme of the Government of India as 100 percent Export Oriented Unit (100% EOU). During the relevant assessment year 2009-10, the assessee should have realized the export proceeds as detailed below: Sl.No Period Amount Outstanding/receivable from the clients (Rs.) Amount of remittances received (Rs.) Balance Receivable (Rs.) 1 As on 01.04.2008 8,48,37,603 8,44,80,395 3,57,208 2 Between 01.04.2008 to 31.03.2009 33,79,55,957 14,11,79,059 19,67,76,898 3 Between 01.04.2009 to 30.09.2009 19,67,76,898 10,25,41,411 9,42,35,487 The AO in his order u/s.143(3) r.w.s. 263 of the Act, stated that the assessee has not realised the export proceeds as detailed above, within 6 months from the date of export as per the provisions of the Act to claim the exemption u/s.10A of the Act and made an addition of proportionate income of Rs.6,07,53,695/- to the total income. ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. Further, on appeal by the assessee the ld.CIT(A) deleted the addition by appreciating the submissions and facts which were also submitted before the AO. In the order of the ld.CIT(A), it is observed that the assessee has realised the proceeds of Exports within 12 months from the date of exports made by the assessee, which is as per the time prescribed in the master circular No.9/2009-10 dated 01.07.2009 issued by the RBI (Competent authority). The receipts of export proceeds were supported by the FIRC’s issued by the bankers, which were furnished by the assessee before the AO. 8.1. In the present case on hand the assessee has realised the export proceeds, which has not been disputed by the revenue. The only question to be addressed was whether the same has been realised within the prescribed time as per the provisions of the Act to be eligible to claim the exemption u/s.10A of the Act. In this regard we note that the prescribed period as per section 10A(3) of the Act, clearly states that the proceeds to be realised within 6 months from the end of the previous year or within such period as the competent authority may allow in this behalf. Further the Explanation 1 to Section 10A(3) defines competent authority as the RBI or such other authority. The relevant extracts of which is provided below - ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. “(3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf.” Explanation 1. — For the purposes of this sub-section, the expression \"competent authority\" means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. Further the RBI has issued the master circular by amending the prescribed period for realisation of export proceeds from 6 months to 12 months from the date of exports made vide circular No. No.9/2009-10 dated 01.07.2009. 8.2. Accordingly, in the case on hand, we note that the assessee has realised the export proceeds as detailed below which was supported by the FIRC’s issued by the bankers in support of the same within the extended the prescribed period by the RBI. Sl. No . Date of invoice Amount as per invoice Cumulativ e amount receivable Due date for remitta nce Amount received within 12 months from date of raising invoice Actual Cumulative amount received (1) 2 3 4 5 6 7 1 17-Dec-08 91,53,753 91,53,753 16-Dec-09 4,27,05,265 4,27,05,265 2 18-Jan-09 2,70,65,467 3,62,19,220 17-Jan-10 1,71,89,304 5,98,94,569 3 18-Feb-09 4,00,44,292 7,62,63,512 17-Feb-10 2,43,23,285 8,42,17,854 4 18-Mar-09 4,51,02,494 12,13,66,006 17-Mar-T0 1,68,79,930 10,10,97,784 8.3. Therefore, the assessee has received an amount of Rs.10,10,97,784/- as against the outstanding amount of Rs.9,42,35,487/- which pertains to the invoices raised in the FY ITA 1526/Chny/2024 & CO 48/Chny/2024 Toppan Merrill Technology Services Pvt Ltd., Chennai. 2008-09 within the time period allowed by the RBI Master circular from the date of issuance of the invoice. Hence, we do not find any infirmity in the order of the ld.CIT(A) in allowing the appeal of the assessee. Hence, the grounds raised by the revenue in the present appeal devoid of merits and dismiss the appeal of the revenue. 8.4. Since the appeal is decided against the revenue, the cross objection filed by the assessee becomes academic and hence the CO is also dismissed. 8.5. In the result, the appeal filed by the revenue and cross objection filed by the assessee are dismissed. Order pronounced in the court on 31st January 2025 at Chennai. Sd/- Sd/- (एस एस िवʷनेũ रिव) (S.S. VISWANETHRA RAVI) Ɋाियक सद˟/Judicial Member (एस. आर.रघुनाथा) (S.R. RAGHUNATHA) लेखा सद˟/Accountant Member चेɄई/Chennai, िदनांक/Dated, the 31st January 2025 JPV आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3.आयकर आयुƅ/CIT 4. िवभागीय Ůितिनिध/DR 5. गाडŊ फाईल/GF "