DCIT CEN CIR -34, MUMBAI v. NESS TECHNOLOGIES (INDIA) P. LTD, MUMBAI

ITA 4510/MUM/2009 | 2005-2006
Pronouncement Date: 31-05-2010 | Result: Dismissed

Appeal Details

RSA Number 451019914 RSA 2009
Bench Mumbai
Appeal Number ITA 4510/MUM/2009
Duration Of Justice 10 month(s) 1 day(s)
Appellant DCIT CEN CIR -34, MUMBAI
Respondent NESS TECHNOLOGIES (INDIA) P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Assessment Year 2005-2006
Appeal Filed On 30-07-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B : MUMBAI BEFORE SHRI D.MANMOHAN HONBLE VICE PRESIDENT AND SHRI J.SUDHAKAR REDDY ACCOUNTANT MEMBER ITA. NO. 4510/MUM/2009 ASSESSMENT YEAR 2005-2006 DCIT CENTRAL CIR. 34 MUMBAI 400 020. VS. M/S. NESS TECHNOLOGIES (INDIA) PVT. LTD. MUMBAI 400 064 PAN AAACA-9649-L (APPELLANT) (RESPONDENT) FOR APPELLANT : S/SHRI JAGDISH & S.S. RANA (DR) FOR RESPONDENT : SHRI NIRMAL NAGDA ORDER PER D.MANMOHAN V.P. 1. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 8-5-2009 PASSED BY THE CIT(A) CENTRAL-VI MU MBAI AND IT PERTAINS TO THE ASSESSMENT YEAR 2005-2006. 2. FACTS CONCERNING THE ONLY ISSUE IN DISPUTE ARE STATED IN BRIEF. ASSESSEE DECLARED A TOTAL INCOME OF RS.54 91 895/- AFTER CLAIMING EXEMPTION UNDER SECTION 10A OF THE ACT. AS SESSEE IS ADMITTEDLY ENGAGED IN THE BUSINESS OF SOFTWARE DEVE LOPMENT/EXPORT AND I.T. ENABLED SERVICES. EXEMPTION UNDER SECTION 10A WAS CLAIMED ON THE PROFITS OF ITS STP UNITS AT BANGALORE AND MU MBAI. WITH REGARD TO CALCULATION OF EXEMPTION THE ASSESSING OFFICER W AS OF THE OPINION THAT COMMUNICATION CHARGES PROFESSIONAL FEES AS WE LL AS EXPENDITURE INCURRED IN FOREIGN EXCHANGE FOR TRAVELING HAS TO B E EXCLUDED WHILE CONSIDERING THE TOTAL TURNOVER OF BOTH THE UNITS. 3. AGGRIEVED BY THE RE-CALCULATION MADE BY THE ASS ESSING OFFICER ASSESSEE CONTENDED BEFORE THE CIT(A) THAT E XECUTION OF THE IMPUGNED EXPENDITURE ONLY FROM EXPORT TURNOVER WITH OUT EXCLUDING IT FROM THE TOTAL TURNOVER WOULD BE ILLOGICAL AND UNFA IR AND ALSO AGAINST THE SPIRIT OF EARLIER JUDICIAL PRONOUNCEMENT AND IN THIS REGARD RELIED 2 UPON A DECISION OF THE ITAT MUMBAI BENCH IN THE CA SE OF M/S. GEMPLUS JEWELLERY INDIA LTD. IN ITA. NO. 3159/MUM/2 006. RELIANCE WAS ALSO PLACED UPON THE DECISION OF THE ITAT SPEC IAL BENCH CHENNAI IN THE CASE OF ITO VS. M/S. SAK SOFT LTD. ( 2009) 121 TTJ (CHENNAI) (SB) 865 WHEREIN IDENTICAL ISSUE WAS DECI DED IN FAVOUR OF THE ASSESSEE. 4. HAVING REGARD TO THE DECISIONS CITED (SUPRA) LE ARNED CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE AND HELD THAT THE IMPUGNED EXPENDITURE SHOULD BE REDUCED FROM THE TOTAL TURNOV ER AS WELL AS THE EXPORT TURNOVER FOR APPLYING THE PROVISIONS OF SECT ION 10A OF THE ACT. 5. AGGRIEVED REVENUE IS IN APPEAL BEFORE US. THOU GH THE LEARNED DR STRONGLY RELIED UPON THE ORDER OF THE AS SESSING OFFICER HE FAIRLY ADMITTED THAT THE ISSUE STANDS COVERED BY TH E DECISION OF THE ITAT SPECIAL BENCH IN THE CASE OF ITO VS. SAK SOFT LTD. (SUPRA). 6. ON THE OTHER HAND LEARNED COUNSEL STRONGLY RELI ED UPON THE ORDER OF THE ITAT SPECIAL BENCH (SUPRA) AND TH US SUBMITTED THAT THE ORDER PASSED BY THE LEARNED CIT(A) DOES NOT SUF FER FROM ANY INFIRMITY. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. SINCE THE VIEW TAKEN BY THE LEARNED CIT(A) IS IN CONSONANCE WITH THE VIEW TAKEN BY THE ITAT SPECIAL BENCH (SUP RA) IN THE ABSENCE OF ANY CONTRARY DECISION OF A HIGHER FORUM BROUGHT TO OUR NOTICE BY LEARNED DR WE DO NOT FIND ANY MERIT IN THE CONTENT ION OF THE REVENUE. WE THEREFORE UPHOLD THE ORDER OF THE LEARNED CIT(A ) AND DISMISS THE APPEAL FILED BY THE REVENUE. ORDER PRONOUNCED ON THIS THE 31 ST DAY OF MAY 2010 SD/- SD/- (J.SUDHAKAR REDDY) (D.MANMOHAN) ACCOUNTANT MEMBER VICE PRESIDENT MUMBAI DATE 31 ST MAY 2010. VBP/- 3 COPY TO 1. DCIT CENTRAL CIRCLE 34 R.NO. 104 FIRST FLOOR AAYAKAR BHAVAN MUMBAI 400 020. 2. M/S. NESS TECHNOLOGIES (INDIA) PVT. LTD. OFFICE NO. 201 2 ND FLOOR PARADIGM A BUILDING NO. 12 MINDSPACE MALAD ( WEST) MUMBAI 400 064 PAN AAACA-9649-L 3. CIT (A) CENTRAL-VI MUMBAI 400 051. 4. CIT CENTRAL-III MUMBAI. 5. D.R. B BENCH 6. GUARD FILE. (TRUE COPY) BY ORDER ASST. REGISTRAR ITAT MUMBAI BENCHES MUMBAI. SNO DATE INITIALS 1 DRAFT DICTATED ON 19-05-2010 SR.P.S. 2. DRAFT PLACED BEFORE AUTHOR 20-05-2010 SR.P.S. 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 20-05-2010 V.P. 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 20-05 -2010 A.M 5. APPROVED DRAFT COMES TO THE SR.PS/PS 20-05-2010 SR.P.S. 6. KEPT FOR PRONOUNCEMENT ON 31-05-2010 SR.P.S. 7. FILE SENT TO THE BENCH CLERK 31-05-2010 SR.P.S. 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER