ACIT, Pondicherry v. M/s. Integra Software Services Pvt. Ltd., Pondicherry

ITA 608/CHNY/2011 | 2004-2005
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 60821714 RSA 2011
Assessee PAN AAACI6193B
Bench Chennai
Appeal Number ITA 608/CHNY/2011
Duration Of Justice 3 month(s) 17 day(s)
Appellant ACIT, Pondicherry
Respondent M/s. Integra Software Services Pvt. Ltd., Pondicherry
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 22-07-2011
Assessment Year 2004-2005
Appeal Filed On 05-04-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI (BEFORE SHRI U.B.S. BEDI JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER) .. I.T.A. NOS. 606 607 608 & 609/MDS/2011 ASSESSMENT YEARS : 2002-03 2003-04 2004-05 & 200 7-08 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE I PUDUCHERRY 605 003. (APPELLANT) V. M/S INTEGRA SOFTWARE SERVICES PVT. LTD. 100 FT. ROAD PAKKAMUDAYANPET PONDICHERRY 8. PAN : AAACI6193B (RESPONDENT) APPELLANT BY : DR. I. VIJAYAKUMAR CIT-DR RESPONDENT BY : NONE O R D E R PER BENCH : ALL THESE APPEALS ARE FILED BY THE REVENUE AGAINS T VARIOUS ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-XII CHENNAI FOR THE RESPECTIVE ASSESSMENT YEARS. THE SOLE ISSUE RA ISED IN THESE APPEALS IS THAT LD. CIT(APPEALS) DIRECTED DEDUCTION OF EXPENDITURE INCURRED IN FOREIGN TRAVEL BOTH FROM EXPORT TURNOVE R AS WELL AS THE TOTAL TURNOVER FOR THE PURPOSE OF WORKING OUT THE DEDUCTI ON AVAILABLE TO THE I.T.A. NOS. 606 TO 609/MD/11 2 ASSESSEE UNDER SECTION 10A OF INCOME-TAX ACT 1961 (IN SHORT THE ACT). 2. WHEN ASSESSMENTS FOR ALL THE YEARS WERE COMPLETE D ASSESSING OFFICER HAD REDUCED THE EXPENDITURE INCUR RED BY THE ASSESSEE WHICH WAS ENGAGED IN THE BUSINESS OF EXPO RTING COMPUTER SOFTWARE IN FOREIGN TRAVEL FROM THE EXPORT TURNOVE R FOR COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE ACT. HOWEVER T HIS WAS NOT EXCLUDED FROM THE TOTAL TURNOVER WHILE APPLYING THE FORMULA PRESCRIBED UNDER SECTION 10A OF THE ACT. 3. IN ITS APPEAL BEFORE LD. CIT(APPEALS) ASSESSEE RELIED ON THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF ITO V. SAK SOFT LTD. (2009) 20 DTR 514 AND ARGUED THAT ONCE FO REIGN CURRENCY EXPENSES WERE EXCLUDED FROM EXPORT TURNOVER THE SA ME HAD TO BE EXCLUDED FROM TOTAL TURNOVER FOR THE PURPOSE OF COM PUTING THE DEDUCTION UNDER SECTION 10A OF THE ACT. LD. CIT(AP PEALS) ACCEPTED THIS CONTENTION OF THE ASSESSEE AND DIRECTED THE A. O. TO MAINTAIN PARITY BETWEEN THE NUMERATOR AND DENOMINATOR WHILE WORKING OUT DEDUCTION UNDER SECTION 10A OF THE ACT. I.T.A. NOS. 606 TO 609/MD/11 3 4. NOW BEFORE US LEARNED D.R. SUBMITTED THAT THE D ECISION OF SPECIAL BENCH HAD BEEN APPEALED BEFORE HON'BLE JURI SDICTIONAL HIGH COURT. 5. NOBODY APPEARED TO ARGUE ON BEHALF OF THE ASSESS EE. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE CONTENT ION OF LEARNED D.R. UNDISPUTEDLY LD. CIT(APPEALS) RELIED ON THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE CASE OF SAK S OFT LTD. (SUPRA). THE ISSUE BEFORE THE SPECIAL BENCH WAS COMPUTATION OF DEDUCTION UNDER SECTION 10B OF THE ACT AND HOW TO CONSIDER TH E TOTAL TURNOVER WHEN SOME PART OF THE EXPORT TURNOVER WAS TO BE EXC LUDED. THE RELEVANT PORTION RELIED ON BY LD. CIT(APPEALS) FROM THE ORDER OF SPECIAL BENCH HAS BEEN REPRODUCED AT PAGE 3 OF HIS ORDER AND FOR BREVITY ONCE AGAIN REPRODUCED HEREUNDER:- THE PARTIES HAVE COMPILED SEVERAL ORDERS OF THE CHE NNAI AND BANGALORE BENCHES OF THE TRIBUNAL IN WHICH IT HAS B EEN HELD THAT WHATEVER IT EXCLUDED FROM THE EXPORT TURNOVER SHOUL D ALSO BE EXCLUDED FROM THE TOTAL TURNOVER FOR THE PURPOSES O F SEC. 10A OR 10B OF THE ACT. WE ARE GENERALLY IN AGREEMENT WITH THE CONCLUSION REACHED IN THESE ORDERS WHICH ARE NOT BEING DEALT WITH INDIVIDUALLY. FOR THE ABOVE REASONS WE HOLD THAT FOR THE PURPOSE OF APPLYING THE FORMULA UNDER SUB-SECTION (4) OF SEC. 10B THE FREI GHT TELECOM CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVERY OF ARTICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA OR THE EXPENSES IF ANY INCURRED I.T.A. NOS. 606 TO 609/MD/11 4 IN FOREIGN EXCHANGE IN PROVIDING THE TECHNICAL SERV ICES OUTSIDE INDIA ARE TO BE EXCLUDED BOTH FROM THE EXPORT TURNOVER AN D FROM THE TOTAL TURNOVER WHICH ARE THE NUMERATOR AND THE DENOMINAT OR RESPECTIVELY IN THE FORMULA. THE APPEALS FILED BY THE DEPARTMENT ARE THUS DISMISSED IN OUR OPINION THE FORMULA WITH REGARD TO COMPUTAT ION OF DEDUCTION BOTH UNDER SECTIONS 10A AND 10B ARE PARI MATERIA AT LEAST IN THIS REGARD. THE CIT(APPEALS) WAS THEREFORE JUSTIFIED IN FOLLOWING THE DECISION OF SPECIAL BENCH OF THIS TRIBUNAL IN THE C ASE OF SAK SOFT LTD. (SUPRA) AND DIRECTING THE A.O. TO EXCLUDE FROM THE TOTAL TURNOVER WHAT WAS EXCLUDED FROM THE EXPORT TURNOVER. WE DO NOT F IND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(APPEALS). 7. IN THE RESULT THE FOUR APPEALS FILED BY THE REV ENUE STAND DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 22 ND JULY 2011. SD/- SD/- (U.B.S. BEDI) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI DATED THE 22 ND JULY 2011. KRI. COPY TO: APPELLANT/RESPONDENT/CIT(A)-XII CHENNAI- 34/ CIT PONDICHERRY/D.R./GUARD FILE