Income Tax Appellate Tribunal - Chennai
Toppan Merrill Technology Services ... vs Dcit, Corporate Circle (4), Chennai, ... on 30 April, 2024
आयकर अपीलीय अिधकरण, 'बी' यायपीठ,चे ई IN THE INCOME TAX APPELLATE TRIBUNAL 'B' BENCH, CHENNAI ी महावीर सह, उपा य एवं ी एस.आर. रघुनाथा, लेखा सद य के सम BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 1430/CHNY/2023 िनधारण वष/Assessment Year: 2011-12 Toppan Merrill Technology The Deputy Commissioner Services Pvt. Ltd., Vs. of Income Tax, 5th Floor, Fortius Tower, Corporate Circle 4, Olympia Technology Park, Chennai.
Guindy, Chennai - 600 032.
PAN: AAECM 6364J (अपीलाथ /Appellant) ( यथ /Respondent) अपीलाथ क ओर से/Appellant by : Shri Ashik Shah, CA यथ क ओर से/Respondent by : Shri D. Hema Bhupal, JCIT सुनवाई क तारीख/Date of Hearing : 25.04.2024 घोषणा क तारीख/Date of Pronouncement : 30.04.2024 आदेश /O R D E R PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the order of the Commissioner of Income-Tax (Appeals), Chennai in Order No.ITBA/APL/S/250/2023-24/1056841904 (1) dated 06.10.2023.
The assessment was framed by the Deputy Commissioner of Income Tax (OSD), Corporate Circle-4, Chennai for the assessment year
-2- ITA No.1430/Chny/2023 2011-12 u/s.143(3) r.w.s. 92CA(3) of the Income Tax Act, 1961 (hereinafter the 'Act') vide order dated 03.03.2015.
2. At the outset, it is noticed that this appeal is barred by limitation by 2 days and assessee has filed condonation petition supported by affidavit and explained that this delay is due to unexpected cyclonic storm Michaung and the flood-like conditions in Chennai between 4th December, 2023 to 6th December, 2023 and hence, appeal could not be filed within the due date but it was filed on 07.12.2023 with a delay of 2 days. When these facts were confronted to ld. Senior DR, he could not controvert the above facts or could not contest. Hence, we condone the delay and admit the appeal for adjudication.
3. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing the claim of exemption u/s.10A of the Act in regard to inclusion of export turnover amounting to Rs.1,92,30,121/-. For this, assessee has raised various grounds but relied on ground Nos. 2.2 & 2.5 as under:-
"2.2 The lower authorities erred in reducing an amount of INR 1,92,30,121 from the 'export turnover' for the Impugned AY, in computing the eligible deduction under section 10A of the Act.
-3- ITA No.1430/Chny/2023
2.5 Without prejudice, the lower authorities erred in not excluding the
said amount of INR 1,92,30,121 from the total turnover for the Impugned AY, when the same is not considered as a part of the export turnover for the year, thereby not granting parity as per the settled position of law."
Apart from these two grounds, the assessee has not pressed other grounds.
4. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the AO on perusal of accounts and details of invoices raised during the year with reference to foreign services rendered and corresponding amount deposited with FIRC noticed that the following invoices have already been taken into account for calculating the amount received during the financial year 2009-10 and also the invoices raised for financial year 2010-11. The AO in his assessment order has depicted the chart. According to AO, since the amount totaling to Rs.1,92,30,121/- represents the invoices and payments not relating to the previous year relevant to assessment year 2011-12, the same was held not tobe eligible for claim of exemption u/s.10A of the Act and accordingly, disallowed. Aggrieved, assessee preferred appeal before CIT(A).
-4- ITA No.1430/Chny/2023 5. The CIT(A) also repeated the same and dismissed the
assessee's ground by observing in para 3.4 as under:-
"3.4 Further, the ratio as laid down by the Hon'ble Supreme Court in the case of M/s HCL Technologies Ltd. vs. ACIT does not apply to this case as the facts and circumstances of the said case differs from the facts and circumstances in the instant case. It is also seen that the AO has made the said addition only after giving due opportunity to the appellant to which the appellant has also duly complied. It is also found that the AO did not doubt the veracity of the claim made but has only disallowed the invoices pertaining to A.Y. 2010-11 and A.Y. 2012-13, which is correct as per the method of accounting followed by the appellant company. Thus, Grounds of Appeal No.1 raised by the appellant stands dismissed."
Aggrieved, assessee came in appeal before the Tribunal.
6. Now, before us, the ld.counsel for the assessee filed copies of invoices in its paper-book consisting of pages 1 to 61 including extract of return of income, financial statement, form No.56F, realization of income schedule and sale invoices for assessment year 2010-11 as well as for assessment year 2011-12. The ld.counsel for the assessee drew our attention to the calculation of disallowances and explained the numerical data by the following chart:-
Invoice Amount (INR) FIRC No. Amount (INR) Reasons 001/MTS/2010 17,346,010 411032500302 451,952 As per the adjustment (dated April (USD 10,156) methodology followed 30, 2010) - For by the appellant, this the services FIRC has been partly rendered adjusted in the FY 2009-10 amounting during April USD 545,760 and 2010 balance USD 10,156 (taking 44.5 INR/USD as the exchange rate)
-5- ITA No.1430/Chny/2023 has been adjusted towards the subject invoice pertaining to FY 2010-11.
411032400256 1,322,095 The FIRC for USD
(USD 29,710) 29,710 has also been
adjusted against the
captioned invoice.
411033000331 15,571,973 This FIRC provides
(USD 349,932) clearance for USD
3,274,360 out of
which only USD
349,932 was adjusted
in this invoice.
Remaining amount
was adjusted against
subsequent invoice in
the same year.
018/MTS/2012 18,84,111 411102500341 1,884,111 Basis the mercantile
(dated (USD 693,352) method of accounting
September 30, regularly followed,
2011) - For the the appellant has
services accounted for all the
services rendered
rendered
during the said
during March financial year
2011 (True-up) irrespective of its
invoicing. Hence,
basis the services
rendered, the
appellant passed an
accrual entry as
unbilled revenue on
March 31, 2011 and
has subsequently
raised an invoice on
September 30, 2011
Since the revenue has
been recorded in FY
2010-11, the revenue
is ought to be treated
as pertaining to FY
2010-11 irrespective
of the billing year.
-6- ITA No.1430/Chny/2023
The ld.counsel for the assessee stated that the subject invoice amounting to Rs.1,92,30,121/- was already reduced from the computation of export turnover and not from the total turnover.
Accordingly, the assessee contended that deduction u/s.10A of the Act was restricted at Rs.2,89,06,325/- as against the sum of Rs.3,13,82,905/- which was originally claimed by assessee. The assessee has correlated and reconciled the entire figure and it seems that the entire re-conciliation is matching with the amount declared in Form 56F. Hence, we find no infirmity in the claim of the assessee. Therefore, we allow the claim of assessee and the appeal of the assessee is accordingly allowed.
7. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 30th April, 2024 at Chennai.
Sd/- Sd/-
(एस.आर. रघुनाथा) (महावीर सह )
(S.R. RAGHUNATHA) (MAHAVIR SINGH)
लेखा सद य/ACCOUNTANT MEMBER उपा य /VICE PRESIDENT
चे ई/Chennai,
दनांक/Dated, the 30th April, 2024
RSR
-7- ITA No.1430/Chny/2023
आदेश क ितिलिप अ ेिषत/Copy to:
1. अपीलाथ /Appellant
2. यथ /Respondent
3. आयकर आयु /CIT
4. िवभागीय ितिनिध/DR
5. गाड फाईल/GF.