TaxTMI 
TaxTMI 
2015 (8) TMI 1038
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....ipulated time. 3. In the circumstances of the case and in law, whether the CIT(A) was right in admitting the additional evidences and allowing relief to the assessee in view of the provisions of Rule 46A." 3. The assessee is a company engaged in software development. It was having a unit registered under Software Technology Park of India Scheme (STPI), income from which was eligible for deduction u/s. 10A of the Income-tax Act, 1961 ["the Act"] which was worked out by the Assessee as under:- Gross Exports in STPI Unit (US $ 6,00,000) : Rs.269,46,000 Expenditure in STPI Unit : Rs. 21,77,319 Net Income in STPI Unit : Rs.247,68,631 4. The assessee exported software worth US$ 6,00,000 on 29-03-2010 to Evergo Technology Limited, Hongkong, which was evidenced by STPI certified softex form & invoice. However, the said export proceeds could not be received within 6 months from the date of export; and accordingly as per RBI Circular, the assessee sought extension upto 31-03-2011 as per letter dated 21-09-2010 filed before the Authorised Dealer of Reserve Bank of India, i.e., Union Bank of India. Incidentally Reserve Bank of India also unilaterally extend....
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.... Receivable 3,55,000 15.06.2011 Import 3,55,500 NIL 8. The assessee had applied for setoff as per Reserve Bank of India instructions and as per the procedure applied through the Authorised Dealer Union Bank of India. There was no denial for request for permission for setoff either by the Union Bank of India or by Reserve Bank of India, at the time of hearing of the case by the Assessing Officer. Subsequently, Union Bank of India through its letter dated 13.8.2013 acknowledged set-off of imports & exports. 9. The AO, however, denied the claim of assessee for deduction u/s. 10A for the following reasons:- "The assessee's plea cannot be accepted. In view of the assessee's submission it is evident that the assessee has not received or brought in the export proceeds as provided u/s 10A of the Act. The assessee has not been permitted by the Authorised Dealer to receive the export proceeds beyond six months, as provided u/s 10A, on fulfilling the conditions as per the guidelines prescribed by the Reserve Bank of India. The assessee has also not furnished any evidences for having permitted the company by the Competent Authority to net off its export proceeds a....
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....t is mentioned that "Attention of Authorised Dealer Category-1 (AD Category-1) banks is invited to increasing the period of realization and repatriation to India of the amount representing the full export value of goods or software exported, from six months to twelve months from the date of export, subject to review after one year. The issue has since been reviewed and it has been decided, in consultation with the Govt. of India, to extend the above relaxation up to March 31, 2011." Regarding the import payments to be made to Evergo Technology, Hongkong. Accordingly, the Appellant applied to Authorised Dealer, Union Bank of India requesting for Netting off the bills. The Hon'ble Supreme Court in the Case of J B Boda & Co Pvt. Ltd. 223 ITR 271 has observed that two way traffic is unnecessary and the assessee can adjusted the receivable against the payments. Hence the contention of the AO that export receipts were not received within six months of the stipulated period is not justifiable as the assessee has approached the RBI to receive the receipts beyond six months of the stipulated period and the RBI has given general permission to receive the export proceeds beyond the stipul....
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.... following: (i) The 'netting off' of export receivables against import payments is in respect of the same Indian entity and the overseas buyer / supplier ( bilateral netting ). The netting may be done as on date of balance sheet of the unit in SEZ. (ii) The details of export of goods is documented in GR(O) forms/DTR as the case may be while details of import of goods / services is recorded through Al/A2 form as the case may be. The relative GR / SDF forms will be treated as complete by the designated authorised dealer only after the entire proceeds are adjusted / received. (iii) Both the transactions of sale and purchase in 'R' Returns under FET-ERS are reported separately. (iv) The export / import transactions with ACU countries are kept outside the arrangement. (v) All the relevant documents are submitted to the concerned authorised dealer who should comply with all the regulatory requirements relating to the transactions." 13. It is in accordance with this Circular that the authorised dealer has granted the requisite permission to the assessee. In such circumstances, we are of the view that there is no merit in ground No.1 raised by the Revenue.....
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....ing within the ambit of section 194J of the Act, and therefore the assessee ought to have deducted tax at source @ 10% on the payment. The AO therefore invoked the provisions of section 40(a)(ia) of the Act and disallowed a sum of Rs. 4,68,20,140 and added the same to the total income of the assessee. The following were the observations of the AO in this regard:- " ......... Thus in accordance with the provisions of section 194J (under Chapter XVII-B), the assessee was required to deduct tax @ 10% on the aggregate amount of Rs. Rs. 5,85,25,180/-, which works out to Rs. 58,52,518/-. But the assessee has only deducted tax of Rs. 11,70,504/-. Hence the tax of Rs. 46,82,014/-, which is deductible at source under Chapter XVII-B, and such tax has not been deducted, as provided u/s 40(a)(ia) of the Act. In view of the specific provisions of section 40(a)(ia), the assessee has failed to deduct tax u/s 194J to the extent Rs. 46,82,014/- against the payments made to M/s. Ken Computek , which are in the nature of fees for professional and technical services within the meaning of the provisions of section 194J of the Act, and hence the corresponding payments of Rs. 4,68,20,140/- is disallow....
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....ural training programe 2009-10 and shall be handed over to the respective colleges after the completion of the training programme. Kindly inform the nodal executives regarding the same. The assessee had claimed the batteries that were purchased are to be handed over with UPS to the respective rural PU colleges and batteries are no longer with the assessee and the same may be considered as a revenue expenditure. As the same information not available with the AO at the time of passing the scrutiny assessment order, the contention of the assessee that the expenditure incurred for purchase of batteries as which were handover along with UPS and the instrument was no longer with the assessee and the same has to be considered as a revenue expenditure as contended by the assessee. The assessee's contention is agreed and the addition made by the AO is deleted." 22. Aggrieved by the order of CIT(Appeals), the Revenue has raised grounds 4 & 5 before the Tribunal. 23. We have heard the submissions of the ld. DR, who relied on the order of the AO. 24. We have considered his submissions, As far as disallowance u/s. 40(a)(ia) of the Act is concerned, we are of the view that disallowa....