2012 (12) TMI 127 - AT - Income Tax

Deduction u/s. 10A Receipt of foreign exchange - Held that - Section 10A(3) of the Act provides that the sale proceeds in convertible foreign exchange has to be brought into India within the period of six months from the end of the previous year or within the such further period as the competent authority may allow for availing the deduction under section 10A of the Act - Explanation 1 provides that the competent authority means the RBI - assessee has produced a Circular from the RBI allowing extension of time for bringing the sale proceeds in convertible foreign exchange - assessing officer directed to verify the FIRCs and recompute the deduction u/s. 10A after considering the amounts realised within 12 month from the date of respective exports In favor of assessee

Summary

Issues:
Delay in filing appeal, applicability of deduction u/s. 10A, verification of export proceeds for deduction calculation.

Delay in filing appeal:
The appeal was filed by the Revenue against the order of the CIT(A) IV, Hyderabad for the assessment year 2006-07, with a delay of two days. The appellant sought condonation of the delay, which was granted due to the smallness of the delay and the reasons provided. The appeal was then proceeded with on merits.

Applicability of deduction u/s. 10A:
The main issue in this appeal revolved around the applicability of deduction under section 10A of the Income Tax Act. The Tribunal referred to a previous decision in the assessee's own case for the assessment year 2007-08, where it was held that sale proceeds in convertible foreign exchange brought into India within the period allowed by the competent authority are eligible for relief under section 10A. The Tribunal upheld the CIT(A)'s decision to delete the addition made by the assessing officer, based on the RBI circular allowing an extension of time for bringing the sale proceeds in convertible foreign exchange.

Verification of export proceeds for deduction calculation:
The CIT(A) directed the assessing officer to verify the Foreign Inward Remittance Certificates (FIRCs) and recompute the deduction under section 10A after considering the amounts realized within 12 months from the date of respective exports. The Tribunal found no issue with this direction and upheld it, leading to the rejection of the Revenue's grounds in the appeal.

In conclusion, the Tribunal dismissed the Revenue's appeal, emphasizing the eligibility of sale proceeds in convertible foreign exchange for relief under section 10A and endorsing the CIT(A)'s directive to verify export proceeds for deduction calculation.