The DCIT, Circle-4,, Ahmedabad v. Harsha Engineers Pvt. Ltd.,, Ahmedabad

ITA 1331/AHD/2010 | 2007-2008
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 133120514 RSA 2010
Bench Ahmedabad
Appeal Number ITA 1331/AHD/2010
Duration Of Justice 9 month(s) 1 day(s)
Appellant The DCIT, Circle-4,, Ahmedabad
Respondent Harsha Engineers Pvt. Ltd.,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 28-01-2011
Date Of Final Hearing 21-01-2011
Next Hearing Date 21-01-2011
Assessment Year 2007-2008
Appeal Filed On 27-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD C BENCH (BEFORE S/SHRI BHAVNESH SAINI JUDICIAL MEMBER AND A.N. PAHUJA ACCOUNTANT MEMBER) ITA NO.1331/AHD/2010 [ASSTT. YEAR : 2007-2008] DICTATED ON: 21-01-2011 DCIT CIR.4 AHMEDABAD. VS. M/S.HARSHA ENGINEERS PVT. LTD. SARKHEJ-BAVL ROAD AT & POST CHANGODAR TALUKA SANAND DIST : AHMEDABAD. PAN : AAACH 44828 C (APPELLANT) (RESPONDENT) REVENUE BY : MR.ANURAG SHARMA ASSESSEE BY : SHRI TUSHAR HEMANI O R D E R PER BHAVNESH SAINI JUDICIAL MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME-TAX(APPEALS)-VIII AHMEDABAD DATED 19.01.2010 FOR THE ASSESSMENT YEAR 2007-2008 ON THE FOLLOWING GROUNDS: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN H OLDING THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.10B OF THE AC T ON EXCHANGE RATE FLUCTUATION OF RS.81 90 200/- 1.1 THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT ANY GAIN ON FOREIGN EXCHANGE FLUCTUAT ION IS NOT ON ACCOUNT OF ASSESSEES EXPORT BUT ON ACCOUNT OF EXTERNAL FAC TORS LEADING TO EXCHANGE RATE FLUCTUATION. 2. THE LEARNED CIT(A) ON THE ABOVE GROUNDS OF APPEA L NOTED THAT THE ISSUE IS COVERED BY THE ORDER OF THE ITAT A BENCH IN T HE CASE OF ITO VS. GAMI EXPORTS 94 TTJ 557. ACCORDINGLY THE AO WAS DIREC TED TO ALLOW DEDUCTION TO THE ASSESSEE UNDER SECTION 80IB ON THE SURPLUS FROM EXCHANGE RATE FLUCTUATION. THE LEARNED COUNSEL AT THE OUTSET SUBMITTED THAT IN THE PRECEDING ASSESSMENT YEAR 2006-2007 THE TRIBUNAL HAS DISMISSED THE REVE NUES APPEAL ON THE IDENTICAL GROUND IN ITA NO.2186/AHD/2009 DATED 9-9- 2009 IN WHICH IT WAS HELD AS UNDER: ITA NO.1331/AHD/2010 -2- 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE O N RECORD. IN THE INSTANT CASE THE ASSESSEE EARNED EXCHANGE RATE FLU CTUATION OF RS.17 10 678/- ON SALE PROCEEDS OF GOODS WHICH WAS DISALLOWED DEDUCTION UNDER SECTION 10B OF THE ACT BY THE LEARN ED ASSESSING OFFICER. IN APPEAL THE LEARNED COMMISSIONER OF INC OME TAX(APPEALS) ALLOWED DEDUCTION ON THE SAME. WE FIND THAT THE THI RD MEMBER OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS. BANY AN CHEMICALS LTD. (2009) 117 ITD 376 HAS HELD THAT THE GAIN ON ACCOU NT OF EXCHANGE FLUCTUATION RESULTS IN THE RECEIPT OF FOREIGN CURRE NCY DUE TO EXPORT SALES MADE BY AN ASSESSEE. IT IS A PART OF THE RECEIPT OF SALE PROCEEDS CONVERTED IN INDIAN RUPEE AS HELD BY THE HON'BLE GU JARAT HIGH COURT IN CIT VS. AMBA IMPAX (2006) 282 ITR 144 (GUJ.). THOUG H IT WAS A CASE UNDER SECTION 80HHC BUT THE PROVISIONS OF SECTION 1 0B ARE IN PARA MATERIA AND THEREFORE THE DECISION WOULD APPLY MUT ATIS MUTANDIS TO SECTION 108. RESPECTFULLY FOLLOWING THE SAME WE FI ND THAT IN THE INSTANT CASE IT IS NOT THE FACT THAT THE ASSESSEE HAS RECE IVED SALE PROCEEDS OF EXPORTS AND DEPOSITED THE SAME IN ANY BANK ACCOUNT AND EARNED EXCHANGE FLUCTUATION GAIN AT THE TIME OF WITHDRAWAL FROM THE SAID BANK ACCOUNT. ON THE OTHER HAND THE FACTS OF THE CASE I S THAT THE ASSESSEE MADE AN EXPORT SALE AND RECORDED THE SALE VALUE AT THE VALUE MENTIONED IN THE INVOICE AND LATER ON WHEN IT ACTUALLY RECEIV ED THE SALE PROCEEDS DUE TO CHANGE IN RATE OF EXCHANGE THE ASSESSEE RECE IVED MORE SALE PROCEEDS OF EXPORTS AND THEREBY EARNED EXCHANGE FLU CTUATION GAIN. THEREFORE RESPECTFULLY FOLLOWING THE ABOVE CITED D ECISION OF THE TRIBUNAL WE CONFIRMED THE ORDER OF THE LEARNED COM MISSIONER OF INCOME TAX(APPEALS) AND DISMISSED THE GROUND OF APP EAL OF REVENUE. 3. THE LEARNED DR CONCEDED THAT THE ISSUE IS COVERE D IN FAVOUR OF THE ASSESSEE. ITA NO.1331/AHD/2010 -3- 4. ON CONSIDERATION OF THE ABOVE FACTS WE ARE OF T HE VIEW THAT SINCE IDENTICAL GROUND IS ALREADY DECIDED BY THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE IN PRECEDING ASSESSMENT YEAR BY DISMISSING THE DEPARTMENTS APPEAL THEREFORE THE ISSUE IS COVERED AGAINST THE REVENUE BY THE ABOVE ORDER OF THE TRIBUNAL ACCORDINGLY THE REVENUES APPEAL IS DISM ISSED. 5. IN RESULT THE REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28 TH JANUARY 2011 SD/- SD/- (A.N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER PLACE : AHMEDABAD DATE : 28-01-2011 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : DEPARTMENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR ITAT. BY ORDER DR/AR ITAT AHMEDABAD