Income Tax Appellate Tribunal - Pune
Opus Sofware Solution Pvt. Ltd., Pune vs Assessee
Author: G.S. Pannu
Bench: G.S. Pannu
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH " A", PUNE
BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER
AND SHRI G.S. PANNU, ACCOUNTANT MEMBER
I.T.A. No. 158/PN/2009 :Asstt. Years: 2005-06
M/S. Opus software Solutions Pvt.Ltd.,
Commerzone Building No. 4
1st floor, Samrat Ashoka Path,
Opp. Airport Road, Yerawada
PUNE - 411 505
PAN AAACO 2203 N .. Appellant
Vs.
Asstt. CIT Cir. 3, Pune .. Respondent
Appellant by: Shri Sunil Pathak
Respondent by: Shri Hareshwar Sharma
ORDER
PER G.S. PANNU, AM
This appeal by the assessee is directed against the order of the CIT(A)-II Pune dated 21-10-2008 for A.Y. 2005-06.
2. The substantive grievance of the assessee in this appeal is against the disallowance of Rs. 26,07,968/- made by the authorities below in respect of deduction claimed by the assessee u/s 10A of the Income-tax Act, 1961 (hereinafter referred to as "Act" for short). 3 The brief facts of the case are that the assessee is, inter alia, engaged in the business of manufacture of computer software and is registered under Software Technology Park of India and had claimed exemption u/s 10A of the Act with respect to such profits. The exemption was claimed at Rs. 3,82,53,465/- which was scaled down to Rs. 3,56,45,497/- by the A.O on the ground that the sale proceeds of the computer software exported out of India to the extent of 2 ITA No. 158/PN/2009 Opus Software Solutions Pvt. Ltd.
A.Y. 2005-06 Rs. 1,11,03,982/- were not brought into India by the assessee in convertible foreign exchange within the period prescribed u/s 10A(3) of the Act. Thus the exemption was scaled down to the extent of Rs. 26,07,968/-. The CIT(A) has also upheld the stand of the A.O for the reason stated in his order.
4. Before us, the learned counsel for the assessee pointed out that subsequent to the order of the CIT(A), the assessee moved an application u/s 154 read with section 155(11A) of the Act before the A.O on the ground that the whole of Rs. 1,11,03,982/- was includible as export turnover because the same has been received in India, a copy of the said application has been placed on record and it is further contended that it has yet not been disposed off by the A.O. In any case, the plea raised is that in terms of section 10A(3) of the Act, the assessee is required to bring into India the sale proceeds 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. On this aspect, it has been pointed out that having regard to the circular of the Reserve Bank of India, which is a competent authority referred to in section 10A(3) of the Act , the assessee has received the remittances within the period prescribed and therefore, such receipts are eligible to be considered for the purpose of exemption u/s 10A(3) of the Act. The plea of the learned counsel was that the matter be remitted back to the file of the A.O for examination on merits.
5. On the other hand, the learned DR has opposed the prayer of the assessee by pointing out that it is clear that the sale proceeds have not been brought into India within a period of six months from the end of 3 ITA No. 158/PN/2009 Opus Software Solutions Pvt. Ltd.
A.Y. 2005-06 the previous year and therefore, the assessee is not entitled for the claim of exemption and the same has been rightly denied by the lower authorities.
6. We have carefully considered the rival submissions The short point involved in this appeal relates to the provisions of section 10A(3) of the Act which prescribes that the exemption u/s 10A is available in relation to sale proceeds of articles or things exported out of India which are received or brought into India by the assessee in convertible foreign exchange within a period of six months from the end of previous year or within such further period as the Competent Authority may allow in this behalf. In this case, the sale proceeds to the extent of Rs. 1,11,03,982/- have not been brought into India by the assessee in convertible foreign exchange within a period of six months from the end of previous year. On this basis, the lower authorities have disallowed the claim of exemption u/s 10A of the Act with respect to such sale proceeds. However, the claim now made before us is that the assessee has brought the receipts into India ultimately within such further period as allowed by the Competent Authority which is Reserve Bank of India in this case. In our considered opinion, the plea of the assessee cannot be shut down without evaluation on merits, since section 10A(3) of the Act allows the assessee to bring any sale proceeds into India within such further period as Reserve Bank of India may allow in this behalf. Therefore, we are inclined to set aside the order of the CIT(A) and remit the issue back to the file of the Assessing Officer who shall examine the claim of the assessee in the light of the provisions of section 10A(3) of the Act and thereafter pass an order afresh on this aspect. Needless to say, the Assessing Officer shall 4 ITA No. 158/PN/2009 Opus Software Solutions Pvt. Ltd.
A.Y. 2005-06 afford adequate opportunity of hearing to the assessee. This ground of appeal is therefore, treated as allowed for statistical purposes.
7. The next ground of appeal in this appeal is in relation to the disallowance of Rs. 4,06,495/- in respect of travel advances given to employees, for which no arguments have been advanced and is therefore, dismissed.
8. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Decision pronounced in the open Court on this 13TH Day of April 2011.
SD/- SD/-
(SHAIALENDRA KUMAR YADAV) (G.S. PANNU)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Pune: Dated: 13th April, 2011
Ankam
Copy of the order is forwarded to :
1. Assessee
2. Department
3. The CIT(A) II Pune
4. The CIT, - II Pune
5. The D.R, 'A' Bench, Pune
"True copy"
By order
Assistant Registrar
ITAT, Pune Benches, Pune