The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has recently, in an appeal filed before it, held that benefit of s. 10AA is allowable, if the consideration in respect of exports was received in India or brought into India.
The aforesaid observation was made by the Mumbai ITAT, when a batch of 3 appeals filed by an Assessee pertaining to Assessment Year 2016-17, 2017-18 and 2018-19, was filed before it, on the issue as to whether, on the facts and circumstances of the case and in law, the CIT(A) has erred in confirming the disallowance made by the AO, by not considering export sale realized after limitation of time as export turnover and consequently restricting deduction u/s 10AA of the Act by Rs. 24,17,656 by computing deduction u/s 10AA at Rs. 2,04,51,697, the appellant prayed before the tribunal that export sale realized after limitation of time be considered as export turnover and deduction u/s 10AA as claimed by the appellant be granted.
The relevant facts in brief pertaining to the issue being that the Appellant had filed its original return of income for the Assessment Year 2017–18 on 30/11/2017 declaring total income of INR 3,72,49,950/- after claiming deduction of INR 2,28,69,351/- under Section 10A of the Income Tax Act, subsequently, the case of the Appellant was selected for scrutiny.
Thereafter, the Assessing Officer having completed the assessment under Section 143(3) of the Income Tax Act, vide Assessment Order dated 23/04/2021, while framing, the Assessing Officer restricted the amount for deduction claimed by the Appellant under Section 10AA of the Act to INR 2,04,51,697/- since he was of the view that the deduction under Section 10AA of the Income Tax Act could be allowed only in respect of the export proceeded realized within a period of 6 months from the end of relevant previous year.
Agitated by the same, the assessee preferred an appeal before the CIT(A), who dismissed by the same vide common order dated 25.10.2022, thus leaving the assessee aggrieved to prefer the instant appeal before the Mumbai ITAT.
Hearing the opposing contentions of either sides, as presented by Shri Vijay Mehta, for the Appellant/Assessee and by Ms. Vranda U Matkarni, for the Respondent/Department, the Mumbai ITAT observed:
“We have considered the rival submissions and perused the material on record. We find that the solitary issue raised in the present appeal stands decided in favor of the Appellant/Assessee by the decision of Delhi bench of the Tribunal bench in the case of BT e-Serv (India) Private Limited.”
“We are in agreement with the above decision of the Tribunal since Section 10AA does not prescribe any time limit for realization of export proceeds, the benefit of Section 10AA cannot be denied to an Assessee merely because the export proceeds were realized after the expiry of 6 months from the end of relevant previous year in which export sales were made. In our view, in case an assessee is able to show that the consideration in respect of exports was received in India or brought into India, the deduction under Section 10AA of the Act should be allowed.”, the ITAT Panel comprising of S. Rifaur Rahman, the Accountant Member, along with Rahul Chaudhary, the Judicial member noted.
Thus, allowing all the three appeals of the assessee, while setting aside the order passed by the Assessing Officer and the CIT(A), the Mumbai ITAT held:
“In the present case the Appellant had filed the details of realization of export sales with the Assessing Officer and the CIT(A). Therefore, we direct the Assessing Officer to allow deduction to the Appellant under Section 10AA of the Act by taking into account the export sales realized by the Appellant. Accordingly, the order passed by the Assessing Officer and the CIT(A) are set aside.”
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