M/S. POLARIS FINANCIAL TECHNOLOGY LIMITED,CHENNAI vs. DCIT, CHENNAI

This appeal of the assessee is directed against the order of the Assessing Officer, consequent to the directions of Dispute Resolution Panel dated 09.08.2012 and pertains to assessment year 2008-09.

The first issue arises for consideration is deduction claimed by the assessee under Section 10A of the Income-tax Act, 1961 (in short 'the Act').

Shri Vijay Kumar Punna, the Ld.counsel for the assessee, submitted that the appeal of the assessee was earlier disposed of by this Tribunal. However, ground No.3 was not adjudicated by this Tribunal, therefore, the assessee filed Miscellaneous Petition in M.P. No.184 & 185/Mds/2013 bringing to the notice of this Tribunal that ground No.3 was not adjudicated. Accordingly, the appeal was reopened only for the purpose of adjudicating ground No.3.

Ground No.3, according to the Ld. counsel, is with regard to deduction under Section 10A of the Act. According to the Ld. counsel, the sale proceeds were subsequently brought to India within the extended time granted by competent authority.

On the contrary, Shri Anurag Sahay, the Ld. Departmental Representative, submitted that the TPO or the Assessing Officer or the DRP had no occasion to consider the judgment of Madras High Court in Galaxy Granites (P.) Ltd. (supra), therefore, the matter may be remitted back to the file of the Assessing Officer.

We have considered the rival submissions on either side and perused the relevant material available on record. The Madras High Court, while considering the claim under Section 80HHC of the Act, found that unrealized sale proceeds should be included in total turnover for the purpose of computing allowable deduction under Section 80HHC of the Act. The assessee now claims before this Tribunal that on the basis of very same analogy, for the purpose of allowing deduction under Section 10A of the Act, the unrealized sale proceeds should be included in the total turnover. As rightly submitted by the Ld. D.R., the Assessing Officer or the TPO had no occasion to consider this judgment of Madras High Court in Galaxy Granites (P.) Ltd. (supra). Therefore, this Tribunal is of the considered opinion that the Assessing Officer has to first consider this judgment of Madras High Court. Accordingly, the orders of the authorities below are set aside in respect of inclusion of unrealized sale proceeds in the export turnover and remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue in the light of the judgment of Madras High Court in Galaxy Granites (P.) Ltd. (supra) and thereafter decide the issue, in accordance with law, after giving an opportunity to the assessee.

In the result, ground No.3 is allowed for statistical purposes. It is made clear that other part of the earlier order of the Tribunal remains as such.