Dy. Commissioner of Income Tax , Circle-1(2) , Hydrabad v. B.A.Continuum India Private Limited (Formerly CFC Continnum India Private Limited), Hyderabad

MA 66/Hyd/2017 | 2008-2009
Pronouncement Date: 17-11-2017 | Result: Allowed

Appeal Details

RSA Number 6622524 RSA 2017
Assessee PAN AACCC2310C
Bench Hyderabad
Appeal Number MA 66/Hyd/2017
Duration Of Justice 22 day(s)
Appellant Dy. Commissioner of Income Tax , Circle-1(2) , Hydrabad
Respondent B.A.Continuum India Private Limited (Formerly CFC Continnum India Private Limited), Hyderabad
Appeal Type Miscellaneous Application
Pronouncement Date 17-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted A
Tribunal Order Date 17-11-2017
Last Hearing Date 13-12-2017
First Hearing Date 14-11-2017
Assessment Year 2008-2009
Appeal Filed On 26-10-2017
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A : HYDERABA D BEFORE SMT. P. MADHAVI DEVI JUDICIAL MEMBER AND SHRI RIFAUR RAHMAN ACCOUNTANT MEMBER M.A. NO.66/HYD/2017 (A.Y. 2008 - 09) (ARISING OUT OF ITA NO.1145/H/2014) DY. COMMISSIONER OF INCOME TAX CIRCLE 1(3) HYDERABAD. VS. M/S. BA CONTINUUM INDIA PRIVATE LIMITED (FORMERLY CFC INDIA SERVICES PVT LTD) HYDERABAD. PAN: AACCC 2310 C (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI VAIBHAV MEHTA FOR REVENUE : SMT. ANJALA SAHU DR DATE OF HEARING : 14.11.2017 DATE OF PRONOUNCEMENT : 1 7 .11.2017 ORDER PER SMT. P. MADHAVI DEVI J.M. TH E CAPTIONED MISCELLANEOUS APPLICATION (MA) IS FILED BY THE REVENUE U/S 254(2) OF THE ACT SEEKING MODIFICATION OF THE ORDER OF THE TRIBUNAL DATED 28.04.2017 ON THE GROUND THAT THE TRIBUNAL HAS NOT ADJUDICATED TWO GROUNDS OF APPEAL (GROUNDS NO. II & III) RAISED BY THE REVENUE. 2. AFTER GOING THROUGH THE ORDER OF THE TRIBUNAL WE FIND THAT VIDE ORDER DATED 28.04.2 017 THE TRIBUNAL HAS DISPOSED OF THE CROSS APPEALS OF BOTH THE ASSESSEE AS WELL AS THE REVENUE. BUT T HOUGH THE REVENUE HAS RAISED THE FOLLOWING TWO GROUNDS OF APPEAL THEY HAVE NOT BEEN DISPOSED OF BY THE TRIBUNAL : (II) THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT COMMUNICATION CHARGES ARE TO BE EXCLUDED FROM EXPORT TURNOVER ONLY WHILE COMPUTING DEDUCTION U/S 10A OF THE I.T. ACT AND NOT FROM TOTAL TURNOVER AS WELL AS EXPORT TURNOVER AS DEFINITION OF TURNOVER IS NOT PROVIDED IN EXPLANATION - 2 OF SE C. 10A FOR EXCLUSION OF SUCH CHARGES FROM TOTAL TURNOVER ALSO. (III) THE LD. CIT(A) WHILE DIRECTING THE ASSESSING OFFICER NOT TO EXCLUDE COMMUNICATION CHARGES FROM EXPORT TURNOVER ON THE GROUND THAT THE SAME WERE ALREADY EXCLUDED BY THE ASSESSEE IN THE COM PUTATION OF TOTAL INCOME OUGHT TO HAVE DIRECTED THE A.O. TO ADD SUCH CHARGES TO THE TOTAL TURNOVER AS THE ASSESSEE HAS EXCLUDED THE SAID CHARGES FROM TOTAL TURNOVER ALSO WHILE COMPUTING THE DEDUCTION U/S 10A OF THE ACT. 2 3 . SINCE THE UNDERSIGNED ARE THE M EMBERS WHO HAVE PASSED THE ORDERS DATED 28.04.2017 IN THE CROSS APPEALS (ITA NOS. 1144 AND 1145/HYD/2014) WE HEARD THE LD COUNSEL FOR THE ASSESSEE AS WELL AS LD DR ON THESE GROUNDS AND DEEM IT FIT AND PROPER TO DISPOSE OF THE ABOVE GROUNDS OF THE REVENUE BY MODIFYING THE TRIBUNALS ORDER DATED 28.04.2017 BY SUBSTITUTING PARAS 26 & 27 WITH THE FOLLOWING PARAGRAPHS: - 26. WE FIND THAT THE ISSUE RAISED IN GROUNDS NO.(II) AND (III) IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. TATA ELXSI LTD (2012) 349 ITR 98 (KAR.) WHEREIN IT HAS BEEN HELD THAT IF ANY EXPENDITURE IS TO BE EXCLUDED FROM THE EXPORT TURNOVER THE SAME SHOULD ALSO BE EXCLUDED FROM THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING THE DEDUCTION U/S 10A OF THE ACT. SIMILAR FINDING HAS ALSO BEEN GIVEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BA CONTINUUM SOLUTIONS LTD (I.T.T.A. NO. 214 OF 2014). WE FIND THAT IN THE CASE BEFORE US THE ASSESSEE HAS ALREADY EXCLUDED THE COMMUNICATION CHARGES FROM BOTH THE EXPORT TURNOVER AS WELL AS TOTAL TURNOVER WHILE COMPUTING THE DEDUCTION U/S 10A OF THE ACT AND THE A.O WITHOUT NOT I C ING THE SAME HAS AGAIN EXCLUDED THE COMMUNICATION CHARGES FROM EXPORT TURNOVER O NLY WHILE COMPUTING DEDUCTION U/S 10A OF THE ACT. WE FIND THAT THE LD. CIT(A) AFTER VERIFYING THE ABOVE FACT HAS HELD THAT THERE IS NO NEED TO REDUCE THE SAME AGAIN FROM THE EXPORT TURNOVER . THIS FINDING OF THE LD. CIT(A) IS IN CONSONANCE WITH THE JUDI CIAL PRECEDENTS ON THE ISSUE AS WELL AS AFTER VERIFICATION OF FACTS ON RECORD. THEREFORE WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). 27. AS REGARDS GROUND NO. (IV) WE FIND THAT IN THE ASSESSEES APPEAL WE HAVE ALREADY HELD THAT T HE FOREIGN EXCHANGE GAINS IS PART OF THE OPERATING INCOME OF THE ASSESSEE AND THEREFORE IS TO BE INCLUDED BOTH IN EXPORT TURNOVER AS WELL AS TOTAL TURNOVER FOR COMPUTING DEDUCTION U/S 10A OF THE ACT. THEREFORE THIS GROUND OF APPEAL IS DISMISSED. 28. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE REVENUES APPEAL IS DISMISSED. 4 . IN THE RESULT MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 7 T H NOVEMBER 2017. S D / - S D / - ( S. RIFAUR RAHMAN) ( SMT. P. MADHAVI DEVI ) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD DATED: 1 7 T H NOVEMBER 2017 3 OKK SR.PS COPY TO 1. M/S. B.A. CONTINUUM INDIA PVT. LTD. BUILDING NO.5 MIND SPACE RAHEJA IT PARK HI - TECH CITY MADHAPUR HYDERABAD 500081. 2. ADD. CIT RANGE - 1 AAYAKAR BHAVAN BASHEERBAGH HYDERABAD. 3. DY. CIT CIRCLE 1(2) B BLOCK 7 TH FLOOR IT TOWERS AC GUARDS MASAB TANK HYDERABAD. 4. CIT(A) - II HYDERABAD. 5. CIT - 1 HYDERABAD. 6. THE DR ITAT HYDERABAD. 7. GUARD FILE