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2015 (10) TMI 2103 - AT - Income TaxEntitlement for the claim of tax holiday U/s. 10A - AO noticed that that invoice issued on 31st March 2010 was cleared by STPI authority on 6 May 2010, i.e. in FY 2010-11, hence, the same cannot be considered as an export turnover for the FY. 2009-10. - The only dispute is with reference to treatment of such value as pertaining to next year on the basis of Softex form submitted. Held that:- The only condition for software exported from India to be considered in an year is receipt of consideration of sales proceeds within six months from the end of previous year (or within period extended by RBI) in convertible foreign exchange. Importing of any other condition such as furnishing of SOFTEX Form or obtaining of STPI clearance in the definition of 'export turnover' by the Ld. AO is completely unwarranted and against the industry practice. The legislature in its wisdom has provided a period of six months from the end of previous year for such collection. Thus, the procedural compliance in the course of collection of such export proceeds i.e. furnishing of SOFTEX Form in accordance with Para 6.C.3.1 and certification by STPI authority in accordance with Para 6.C.3.2 of the Foreign Exchange Management (Export of Goods and Services) Regulations, 2000 within the stipulated period six months from the end of the financial year should not result in revenue from export of software made in FY 2009-10 to be treated as 'export turnover' of the subsequent year i.e. FY 2010-11. Considering the above, we are of the opinion that exports made vide invoice dt. 31-03-2010 has to be considered as part of the turnover of this year and AO’s action in excluding the same cannot be supported either on facts or on law. As stated earlier the proceeds of this invoice was already received during the year as advance. So the furnishing of form under FEMA is only a formality. Therefore, AO is directed to include the turnover and allow the deduction accordingly. AO’s action in excluding only from export turn over cannot be supported on the reason that if assessee has not exported the goods as claimed then, the total turnover also should not include the about amount. AO cannot exclude a part of the turnover only from export turnover while including the same in the total turnover. He should have excluded the same on the same reasoning which he has adopted for excluding the above invoice from the export turnover. This was not done for the simple reason that AO’s intention seems to be to restrict deduction U/s. 10A. Therefore, action of the AO cannot be justified at all. Since we have already adjudicated that the invoice of 31-03-2010 has to be considered as part of export turnover of the year, there is no need to adjudicate on this contention. The principle that whatever amount is excluded from export turnover has to be excluded from total turn is approved by the Hon‘ble Bombay High Court in the case of CIT Vs. Gemplus Jewellery India Ltd., [2010 (6) TMI 65 - BOMBAY HIGH COURT ] and also by Special Bench of ITAT in ITO Vs. Saksoft Ltd [2009 (3) TMI 243 - ITAT MADRAS-D]. - Decided in favour of assessee.
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