DCIT, CHENNAI v. SQS India BFSI Ltd., CHENNAI

ITA 998/CHNY/2016 | 2007-2008
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 99821714 RSA 2016
Assessee PAN AABCT0976G
Bench Chennai
Appeal Number ITA 998/CHNY/2016
Duration Of Justice 5 month(s) 15 day(s)
Appellant DCIT, CHENNAI
Respondent SQS India BFSI Ltd., CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Bench Allotted A
Assessment Year 2007-2008
Appeal Filed On 15-04-2016
Judgment Text
IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH CHENNAI . . BEFORE SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY JUDICIAL MEMBER ./ I T.A. NO. 998 /MDS/2016 / ASSESSMENT YEAR :200 7 - 0 8 THE DEPUTY COMMISSIONER OF INCOME TAX CO RPORATE CIRCLE 6(2 ) AAYAKAR BHAVAN NEW BLOCK 7 TH FLOOR 121 M.G. ROAD CHENNAI 600 034. VS. M/S. SQS IND IA BFSI LTD. [FORMERLY THINKSOFT GLOBAL SERVICES PVT. LTD.] 6A SIXTH FLOOR PRINCE INFOCITY II NO. 283/3 & 283/4 RAJIV GANDHI SALAI (OMR) KANDANCHAVADI CHENNAI 600 096. [PAN: AA B C T 0 976G ] ( APPELLANT ) ( R ESPONDENT ) DEPARTMENT BY : SHRI S HIV A SRINIVAS J CIT ASSESSEE BY : MS. BHAVYA ADVOCATE / DATE OF HEARING : 2 0 . 0 7 .201 6 / DATE OF P RONOUNCEMENT : 30 .0 9 .201 6 / O R D E R PER DUVVURU RL REDDY JUDICIAL MEMBER : TH IS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSI ONER OF INCOME TAX (APPEALS) 15 CHENNAI DATED 1 1 . 0 1 .201 6 FOR THE ASSESSMENT YEAR 20 0 7 - 0 8 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO EXCLUDE FOREIGN EXPENDITURE IN B OTH EXPORT I.T.A. NO . 998 /M/1 6 2 TURNOVER AND TOTAL TURNOVER WHILE COMPUTING THE ELIGIBLE DEDUCTION UNDER SECTION 10 B OF THE INCOME TAX ACT 1961 [ ACT IN SHORT] . 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND FIL ED ITS RETURN OF INCOME DECLARING TOTAL INCOME OF THE ASSESSEE AT . 55 55 923/ - AS BUSINESS INCOME AFTER CLAIMING DEDUCTION OF .8 30 91 045/ - UNDER SECTION 10A OF THE ACT . THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 11.12.2009 ASSESSI NG THE INCOME AT .56 62 629/ - . SUBSEQUENTLY THE ASSESSMENT WAS REOPENED UNDER SECTION 147 OF THE ACT BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT OF EXCESS CLAIM OF DEDUCTION UNDER SECTION 10A OF THE ACT AND THEREAFTER THE ASSESSMENT WAS COMPLETED UND ER SECTION 143(3) R.W.S. 147 OF THE ACT ON 12.03.2014 ASSESSING THE TOTAL INCOME OF THE ASSESSEE AT .2 36 34 828/ - AFTER MAKING VARIOUS ADDITIONS. 3 . THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND FACTS OF THE CASE THE LD. CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 4 . AGGRIEVED THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AND THE LD. DR HAS CONTENDED THAT THE ORDER OF THE TRIBUNAL IN THE CASE OF ITO V. SAK SOFT LTD. HAS N OT ATTAINED FINALITY SINCE THE DEPARTMENT HAS PREFERRED AN APPEAL BEFORE THE HON BLE MADRAS HIGH COURT AND PRAYED THAT THE ORDER OF I.T.A. NO . 998 /M/1 6 3 THE LD. CIT(A) SHOULD BE REVERTED . 5 . ON THE HAND THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT SINCE THE ORDER OF THE TRIBUNAL IN THE CASE OF ITO V. SAK SOFT LTD. (SUPRA) HAS NOT BEEN STAYED BY THE HON BLE HIGH COURT THE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE DECISION OF THE SPECIAL BENCH OF ITAT CHENNAI IN THE CASE OF ITO V. SAK SOFT LTD. [121 TT J 865]. 6 . WE HAVE HEARD BOTH SIDES PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND THAT THE LD. CIT(A) BY FOLLOWING THE DECISION OF THE CHENNAI SPECIAL BENCH IN THE CASE OF ITO V. SAK SOFT LTD. (SUPRA) DIRECTED THE ASSESSING OFFICER TO REDUCE THE EXPENSES INCURRED IN FOREIGN EXCHANGE BOTH FROM EXPORT TURNOVER AS WELL AS TOTAL TURNOVER. THIS ISSUE IS SQUARELY COVERED BY THE ORDER OF THE IT AT CHENNAI SPECIAL BENCH IN THE CASE OF M/S. SAK SOFT LTD . (SUPRA) WHEREIN IT WAS HELD AS UNDER: ' .... WE HOLD THAT FOR THE PURPOSE OF APPLYING THE FORMULA UNDER SUB - S (4) OF S.10B THE FREIGHT TELECOM CHARGES OR INSURANCE ATTRIBUTABLE TO THE DELIVER Y OF ARTICLES OR THINGS OR COMPUTER SOFTWARE OUTSIDE INDIA OR THE EXPENSES IF ANY INCURRED IN FOREIGN EXCHANGE IN PROVIDING THE TECHNICAL SERVICES OUTSIDE INDIA ARE TO BE EXCLUDED BOTH FROM THE EXPORT TURNOVER AND FROM THE TOTAL TURNOVER WHICH ARE THE NU MERATOR AND THE DENOMINATOR RESPECTIVELY IN THE FORMULA. .. ' JUST BECAUSE THE DEPARTMENT HAS PREFERRED AN APPEAL BEFORE THE HON BLE HIGH COURT WE CANNOT TAKE A DIFFERENT VIEW AGAINST THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ITO V. SAK SOFT LTD. (SUPRA). I.T.A. NO . 998 /M/1 6 4 THEREFORE WE FIND NO INFIRMITY IN THE ORDER PASSED BY THE LD. CIT(APPEALS) ON THIS ISSUE AND THUS THE GROUND RAISED BY THE REVENUE IS DISMISSED. 7 . IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON THE 30 TH SEPTEMBER 201 6 AT CHENNAI. SD/ - SD/ - (A.MOHAN ALANKAMONY ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI DATED THE 30 .0 9 .201 6 VM/ - / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR & 6. / GF.