Income Tax Appellate Tribunal - Ahmedabad
Pannamax Inforech Ltd., Ahmedabad vs Department Of Income Tax on 2 August, 2016
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ, अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER आयकर अपील सं./ ITA.No.2441/Ahd/2012 नधा रण वष / Asstt. Year: 2009-2010 ITO, Ward-5(2) M/s.Panamax Infotech Ltd.
Ahmedabad. Vs 806, J.B. Tower
Opp: Doordarshan Kendra
Thaltej, Ahmedabad 380059.
PAN : AACCP 5862 A
अपीलाथ!/ (Appellant) "#यथ!/ (Respondent)
Revenue by : Shri Dinesh Singh, Sr.DR
Assessee by : Shri Tushar Hemani
सन
ु वाई क तार ख/ Dateof Hearing : 23/06/2016
घोषणा क तार ख / Date of Pronouncement: 02/08/2016
आदे श/O R D E R
Revenue is in appeal before the Tribunal against the order of ld.CIT(A)-XI, Ahmedabad dated 2.8.2012 passed for the Asstt.Year 2009-10.
2. Revenue has taken five grounds of appeal, but its grievance revolves around a single issue whereby it has challenged the action of the ld.CIT(A) for grant of deduction under section 10B of the Income Tax Act, 1961 by entertaining fresh evidence in violation to Rule 46A of the Income Tax Rules,1962.
3. Brief facts of the case are that the assessee-company at the relevant time was engaged in the business of exporting computer software and IT enabled services. It has filed its return of income electronically on 30.9.2009 declaring total income at Rs.13,30,500/- after claiming deduction under section 10B of the Income Tax Act at Rs.35,38,979/-.
ITA No.2441/Ahd/2012 24. On scrutiny of the accounts, it revealed to the AO that the assessee has declared total turnover of Rs.9,02,67,952/-. It has made export turnover of Rs.8,82,41,126/- and it has foreign exchange fluctuation gain of Rs.45,40,929/-. On a detailed analysis of the record, the ld.AO has denied the alleged deduction and made an addition of Rs.35,38,979/-. Basically, the deduction was to be claimed under section 10A, but by mistake in the computation of income the assessee has mentioned Section 10B. This mistake was rectified by the assessee during the course of assessment proceedings, and it was brought to the notice of the AO that the deduction is admissible under section 10A. The assessee has submitted complete details in support of its claim. The ld.AO has realized this fact and made a reference in para no.4 on page no.5 of the assessment order. But he did not agree with the assessee with regard to admissibility of deduction either under section 10A also.
5. On appeal, the ld.CIT(A) has allowed the deduction by observing as under:
"2.2 I have carefully considered the rival contentions. Taking in view the entirety of facts, I am inclined to agree with the contentions of Ld.A.R. for the following reasons:-
(a)During the appellate proceedings the appellant contended that it is eligible to claim deduction u/s.10A of the IT.Act and the auditors in Form No.56F has given certificate for deduction u/s.10A. In all these submissions and other correspondences the deduction has been claimed u/s.10A. However, inadvertently in the computation of income the deduction has been claimed u/s.10B of the IT.Act. The appellant prayed that its claim should be examined keeping in view provisions of sec.10A of the IT.Act. In this regard the appellant has requested for necessary amendment as per the provisions of Sec.292B of the IT.Act.
Since the appellant in all the documents except the computation of income has claimed deduction u/s.10A, accordingly, I am of the considered view that the appellant intended to claim deduction u/s.10A and deduction should be allowed u/s.10A only.
ITA No.2441/Ahd/2012 3(b)During the assessment as well as appellate proceedings the appellant filed copies of sale invoices raised on Broad Band Telecom Corporation, USA. As per these invoices the turnover of the appellant during the year under consideration is Rs. 7.94 crores.
(c)The appellant has also filed copies of Foreign Remittance Inward Certificate(FRIC) issued by the banks which evidences the receipt of foreign exchange in India against the export turnover.
(d)The appellant has also filed a detailed chart vide which it had explained the receipt of foreign exchange invoice-wise.
(e)The appellant has also furnished copies of a bank statement I wherein the foreign exchange is duly credited. The foreign exchange to the extent of Rs. 7.94 crore is credited in the bank accounts.
(f) The appellant has also furnished copies of Softex Forms (Software Export Declaration Forms). These forms are submitted to STPI and this is another evidence to prove the fact of exports of IT. enabled services. As per the Softex forms the total turnover during the year under consideration is Rs. 7.94 crores.
(g)The appellant has also furnished copies of auditor certificate in form No.56F. As per this certificate also the export turnover has been certified at Rs. 7.94 crores.
(h)The appellant has also furnished copies of quarterly report filed with STP authorities. As per these quarterly reports the export turnover during the year under consideration is 7.94 Crores.
(i) The appellant has also furnished copy of invoice No.STPIC/2009- 10/Exim/S/PIL/381/040/3721 dated 1/8/2009 issued by STPI Gandhinagar. This invoice has been issued to collect regulatory charges of Rs. 1,00,000/- from the appellant. In this invoice also the export turnover of the appellant for the F.Y.08-09 has been worked out at Rs. 7,94 crores.
In the face of overwhelming evidences as mentioned above I do not have any other option but to agree with the contentions of Ld. A.R. that it had exported IT. enabled services of Rs. 7.94 crores during the year under consideration. The foreign exchange receipt as result of export activity is duly credited in the bank account of the appellant. Since all the conditions laid down u/s.10A are fulfilled in the case of appellant, ITA No.2441/Ahd/2012 4 accordingly, the A.O. is directed to allow deduction claimed u/s.10A of Rs. 35,38,979/-. This ground of appeal is allowed."
6. With the assistance of the ld.representatives, I have gone through the record carefully. A perusal of the assessment order would reveal that basically, the AO has not made any serious attempt to investigate the issue. He pointed out certain peripheral defect either in the invoices or form or bill. There is no dispute with regard to the fact that various remittances have been received in the accounts of the assessee. The assessee has submitted details as noticed by the ld.CIT(A) in the finding extracted supra. Copies of all these documents are available in the paper book. I have perused page no.105 wherein invoice for regulatory charges under STPI claim raised by the Software Technology Park of India has been placed on the record. These documents contain the details regarding export turnover invoices of the assessee. Vide these invoices, software technology park raised a demand of Rs.1,00,000/-. The assessee has also submitted other details along with these invoices. The AO has not made investigation with the ultimate clients of the assessee who have availed this IT enabled services. If the AO has any doubt over the activities of the assessee, then, best course would be to find out what type of services assessee was rendering. Once it has alleged that the unit registered with STPL authorities, and it has submitted evidences, then inquiry should have been made from STPI authorities in order to find out the assessee has genuinely be registered with it, or it has been carrying out the activities as alleged by it, in its claim for deduction. No such steps were taken. He simply disbelieved this form or that form. It is merely for sake of disallowance. As far as allegation of the Revenue that some additional evidence has been given by the assessee before the ld.CIT(A) which has been entertained in violation of Rule 46A is concerned, I have perused the written submission filed by the assessee before the ld.CIT(A). No where the assessee has prayed for admission of additional evidence, rather it has emphasized that these ITA No.2441/Ahd/2012 5 documents were given to the AO. Therefore there is no merit in this allegation of the AO. I do not find any merit in the appeal of the Revenue. It is dismissed.
7. In the result, appeal of the Revenue is dismissed.
Order pronounced in the Court on 2nd August, 2016 at Ahmedabad.
Sd/-
(RAJPAL YADAV) JUDICIAL MEMBER