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Microsemi India Private Limited. Versus Deputy Commissioner of Income Tax, Circle-16 (2) , Hyderabad

2015 (10) TMI 2103 - ITAT HYDERABAD

Entitlement 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 .....

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mpliance 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. < .....

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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’ .....

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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. - I.T.A. No. 49/HYD/2014 - Dated:- 31-8-2015 - SMT. P. MADHAVI DEVI AND SHRI B. RAMAKOTAIAH, JJ. For The Assessee : Shri Arun Chhabra and Shri Vaibhav Gupta, ARs For The Revenue : Shri Rama Krishna, Bandi, DR PER B. RAMAKOTAIAH, A.M. : This is an assessee s appeal against the order of the Commissioner of Income Tax (Appeals)-V, Hyderabad dated .....

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n invoice on 31 March 2010 for a value of USD 3,21,352 equivalent to ₹ 1,48,72,171 [Invoice number ACT/2009-10/006] for the services rendered in the month of March 2010. In compliance with the Foreign Exchange Regulation, assessee submitted a declaration of the software exports in a 'Software Export Declaration ('SOFTEX') Form' with the STPI authorities. 4. The STPI authorities vide a letter dated 6th May 2010 provided export clearance required for collection of foreign rem .....

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ing the same in total turnover. This view was upheld by the Ld. CIT(Appeals), who further held that assessee is at liberty to claim the amount of ₹ 1.48 Crores in the export turnover of the subsequent FY. i.e. 2010-11 for AY. 2011-12. Aggrieved, assessee preferred the present appeal raising four grounds. 6. Ground Nos. 1 & 4 are general in nature. Ground No.3 pertaining to disallowance of depreciation on certain used Fixed Assets of ₹ 4,83,158/- was not pressed. 7. Ground No. 2 i .....

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e with reference to receipt of foreign exchange pertaining to the invoice raised on 31-03-10 as assessee received advance and adjusted the sale proceeds from the amount received earlier. The only dispute is with reference to treatment of such value as pertaining to next year on the basis of Softex form submitted. The view canvassed by AO and supported by CIT(A) is not according to provisions or rules of IT Act. 9. Clause (iv) of Explanation 2 to Section 10A defines 'export turnover' as f .....

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vices outside India;" Further, Sub-section 3 of Section 10A provides as under: "(3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf." From above, one can clearly infer th .....

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gn Exchange Management Act, 1999 provides for furnishing of a declaration to the Reserve Bank or to such other authorities as may be specified, containing particulars in relation to payment for such services by the exporter of services. The Section provides as follows: "7. Export of goods and services. - (1) Every exporter of goods shall- (a) furnish to the Reserve Bank or to such other authority a declaration in such form and in such manner as may be specified, containing true and correct .....

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e Reserve Bank may, for the purpose of ensuring that the full export value of the goods or such reduced value of the goods as the Reserve Bank determines, having regard to the prevailing market conditions, is received without any delay, direct any exporter to comply with such requirements as it deems fit. (3) Every exporter of services shall furnish to the Reserve Bank or to such other authorities a declaration in such form and in such manner as may be specified. containing the true and correct .....

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eclaration: C. Declaration in Form SOFTEX (3) (i) The declaration inform SOFTEX in respect of export of computer software and audio/video/television software shall be submitted in triplicate to the designated official of Department of Electronics of Government of India at the Software Technology Parks of India (STPIs) or at the Free Trade Zones (FTZs) or Export Processing Zones (EPZs) in India. (ii) After certifying all three copies of the SOFTEX form, the said designated official shall forward .....

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it is amply clear that the furnishing of the SOFTEX Form and certification of the said form by STPI is a postfacto procedure prescribed by the Reserve Bank of India to ensure timely and appropriate collection of export proceeds. 13. 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 an .....

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art 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. 15. Ground No. 2.2 is on the alternate claim that if the invoice which was raised on 31-03-2010 was excluded the same should also be excluded .....

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