TMI Blog2014 (7) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... ms is known as setting off or netting off. Since the same is done with the approval of the Reserve Bank of India the assessee is only to claim deduction under section 10A of the Act on the total amount of gross bills raised by the assessee as the same was received in convertible foreign exchange. The issue in the present appeal is similar to that of J. B. Boda and Co. Pvt. Ltd. [1996 (10) TMI 70 - SUPREME Court] and, therefore, we find no infirmity in the order of the Commissioner of Income-tax (Appeals) in following the judgment of the hon'ble Supreme Court and the same is upheld. - Decided in favour of assessee. - ITA No. 1484/Hyd/2013 - - - Dated:- 9-7-2014 - SHRI B. RAMAKOTAIAH AND SMT. ASHA VIJAYARAGHAVAN, JJ. For the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt of such permission from the Reserve Bank of India the assessee filed a revised computation before the Assessing Officer requesting for deduction under section 10A at ₹ 37,75,28,906 also. 3. The Assessing Officer did not allow deduction under section 10A on this additional amount of ₹ 37,75,28,906 for the following reasons : (a) That for the assessment year 2008-09, similar claim by the assessee was not accepted. (b) That for the assessment year 2009-10, the assessee itself did not consider the receivables of ₹ 37,75,28,906 for the purpose of claim of deduction under section 10A. Hence, granting of deduction under section 10A on such amount does not arise. 4. Aggrieved the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Reserve Bank of India, the assessee is not statutorily entitled to netting off or setting off of the amounts payable by the assessee to the foreign client against receivables due to the assessee. It was further submitted that the gross bills raised by the assessee is paid by the foreign client in convertible foreign exchange and then only the assessee makes payment to the foreign client from the same amount which in accounting terms is known as setting off or netting off and since the same is done with approval from Reserve Bank of India, the assessee is entitled to claim deduction under section 10A of the Act on the total amount of gross bill raised by the assessee as the same was received in convertible foreign exchange. It was pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court in the case of J. B. Boda and Co. Pvt. Ltd. v. CBDT [1997] 223 ITR 271 (SC), had clearly held that receiving the gross amounts and then paying back the expenses, this two way traffic is an empty formality and a meaningless ritual. It was further held that the entire gross amount shall be treated as received for the purpose of deduction under section 10A. The Commissioner of Income-tax (Appeals) further held that the netting off of exports against imports for the purpose of section 10A was allowed by the hon'ble Income-tax Appellate Tribunal, Mumbai, in the case of Core Jewellery Pvt. Ltd. v. ITO in ITA. No. 715/ Mum/2010 and the Tribunal had followed the decision of the hon'ble Supreme Court in the case of J. B. Boda and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals) ought to have noticed that the facts narrated in the apex court's case law i.e., J. B. Boda and Co. Pvt. Ltd. v. CBDT [1997] 223 ITR 271 (SC) were squarely not applicable in the assessee's case. 7. The learned Departmental representative relied on the order of the Assessing Officer. 8. Learned counsel for the assessee reiterated the contentions made before the Commissioner of Income-tax (Appeals) and stated that the issue is covered by the decision of the Supreme Court in the case of J. B. Boda and Co. Pvt. Ltd. [1997] 223 ITR 271 (SC). 9. We have heard both the parties. In the case of J. B. Boda and Co. Pvt. Ltd. [1997] 223 ITR 271 (SC) the hon'ble apex court held as under (headnote) : Hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the foreign reinsurer, will be an empty formality and a meaningless ritual, on the facts of this case'. 11. We find that the issue in the present case before us is that the gross bills raised by the assessee are paid by the foreign clients in convertible foreign exchange and then only the assessee makes the payment to the foreign client from the same amount which in accounting terms is known as setting off or netting off. Since the same is done with the approval of the Reserve Bank of India the assessee is only to claim deduction under section 10A of the Act on the total amount of gross bills raised by the assessee as the same was received in convertible foreign exchange. The issue in the present appeal is similar to that of J. B. B ..... X X X X Extracts X X X X X X X X Extracts X X X X
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