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TMI Blog2009 (3) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... he deduction under section 10A of the Income-tax Act, 1961. 3. We have heard the parties and perused the record. The relevant facts briefly stated are that the assessee is engaged in the business of development of software and providing information technology enabled services. The assessee is undisputedly entitled to exemption under section 10A of the Act. The deduction had been claimed by the assessee at Rs. 4,33,40,527. On perusal of the claim of the assessee, it was found by the Assessing Officer that a sum of Rs. 2,20,36,235 had not been received by the assessee in convertible foreign exchange within six months from the end of the previous year. The Assessing Officer was of the view that the assessee has failed to fulfil the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was the Standard Chartered Bank, through which the export proceeds have been realized. It was further contended that in any case the assessee had sought formal permission from the Reserve Bank of India and also given reminder for the same as per the evidence placed on record. Reliance has been placed on the decision of the Bombay High Court in the case of Lachman Chaturbhuj Java v. R.G. Nitsure [1981] 132 ITR 631 (Bom.) to support the contention, that once the assessee has sought permission, the same is presumed to have been granted if no communication is received. Reliance was also placed on the Bangalore Bench decision of the Tribunal in the case of Nous Infosystems (P.) Ltd. v. ACIT in [ITA Nos. 589, 606, 607 and 666 (Bang.) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the exemption is permissible subject to fulfillment of certain conditions. One of the conditions required to be satisfied for exemption under section 10A is provided under sub-section (3), which is reproduced as under: "10A(1) (2) ****** (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. Explanation 1 - For the purposes of this sub-section, the expression competent authority means the Reserve Bank of India or suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o section 10A would be satisfied if the remittances had been received by 30-9-2004. The assessee has admittedly received the export proceeds in December 2004. We therefore hold that the assessee has not realized the export proceeds within the period of six months from the end of the previous year, i.e., from end of March 2004. 7. Therefore, the only question that requires consideration is as to whether the sale proceeds have been realized within the time extended by the competent authority. Explanation 1 to sub-section (3) of section 10A provides that the competent authority would mean the Reserve Bank of India or such other authority as is authorized under any law for the time being in force for regulating payments and dealings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued the certificate and on receipt of the said certificate the Reserve Bank of India has issued a letter dated 25-4-2007, the relevant portion of which is reproduced hereunder: "RESERVE BANK OF INDIA www.rbi.org.in FED. MRO.CAD(EXP)/13023/28 13.000/2006-07 April 25, 2007 Standard Chartered Bank (Trade Services) 90, M. G. Road Fort, Mumbai 400 001 Dear Sir, Realisation of Export Proceeds - M/s. Morgan Stanley Advantage Services (P.) Ltd. (MSAS) Please refer to your letter dated 11-4-2007 on the above subject. In this connection we confirm the realization of USD 5,04,031 through the following invoices raised by the above company : Invoice Number Date Amount (USD) Date of Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the time is only a formality. The assessee having applied for extension and having completed all the formalities; and in response the Reserve Bank of India having taken the remittances on record, the non-issue of a formal letter for approval, in our view, cannot be held against the assessee for none of its faults. The assessee having applied for extension and the same having been impliedly granted in substance, the benefit of section 10A has got to be allowed to the assessee on the ground that the extension is deemed to have been granted. Once the assessee has completed all the formalities and the request of the assessee for extension of time not having been rejected, it can be presumed after a reasonable time that the extension has been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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