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TMI Blog2019 (9) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s 10A - HELD THAT:- As per the RBI Master Circular No. 10/2011-12 available filed by the revenue, it is seen that for STP units, time allowed for collection of export proceeds in India is 12 months from the date of export and hence, it has to be seen as to whether the amount of export in question was received in India in foreign currency within the period of 12 months from the date of export. There is no finding available in the order of ld. CIT(A) on this aspect. The working of this amount of ₹ 4,23,73,388/- is also not available before us in the paper book and hence, we feel it proper to restore this aspect of the matter back to the file of ld. CIT(A) for fresh decision with the direction that he should determine the actual amount of export proceeds not received within 12 months from the date of export. Regarding the extension granted by RBI also, he should examine the copy of request made by the assessee for obtaining such extension of time and the actual permission granted by the RBI because we find that the permission of RBI brought on record by the assessee available on page 26 to 27 of the paper book is regarding USD 4,590,641.00 and it includes invoices for bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACCOUNTANT MEMBER One appeal is filed by the revenue for Assessment Year 2011-12 which is directed against the order of ld. CIT(A)-1, Bangalore dated 15.03.2016 and the second appeal is also filed by the revenue which is directed against the order of ld. CIT(A)-1, Bangalore dated 04.08.2016 for Assessment Year 2012-13. Both these appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. First, we take up the appeal of the revenue for Assessment Year 2011-12. The grounds raised by the revenue in this appeal are as under. 1. The order of the Learned CIT (Appeals), in so far as it is prejudicial to the interest of revenue, is opposed to law and the facts and circumstances of the case. 2. The Ld. CIT(A) erred in holding that the correct figure not realized within twelve months from the end of the previous year is ₹ 4,23,73,388/-and all the other export receipts are within the time permitted by the RBI and there shall be no exclusion from the eligible deduction computed u/s 10A of the Act while the assessee himself at sl.no.8 of the Gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end or delete any of the grounds that may be urged at the time of hearing of appeal. 3. It was submitted by ld. DR of revenue that ground nos. 1, 7 and 8 are general and hence, we hold that regarding these grounds, no separate adjudication is called for. Regarding ground nos. 5 and 6, it was fairly conceded by ld. DR of revenue that issue involved in these two grounds is covered against the revenue by the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Tata Elxsi Ltd. as reported in 349 ITR 98. She submitted that still, she supports the assessment order. The ld. AR of assessee supported the order of ld. CIT(A) in which ld. CIT(A) has followed the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Tata Elxsi Ltd. (supra). 4. We have considered the rival submissions. We find that the dispute in these two grounds is regarding computation of deduction allowable to the assessee u/s. 10A because for computing this deduction, the AO has reduced the amount of ₹ 65,17,33,720/- from the export turnover but it has not been reduced from the total turnover and as per the directions of ld. CIT(A), he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der. He submitted that before ld. CIT(A), this was the claim of the assessee that the amount of export proceeds not realized within the stipulated time is only ₹ 4.23 Crores and for the same also, the assessee has obtained extension from RBI. He submitted that RBI extension letter dated 28.02.2013 for realization of export proceeds is available on pages 26 and 27 of the paper book, as per which RBI has granted permission for extension of time up to 30.06.2013 for realizing the outstanding export proceeds in respect of Export invoices amounting to USD 4,590,641.00. He submitted that the details of this amount is available on pages 28 and 29 of the paper book and although, most of the invoices are of next Assessment Year but one invoice is dated 20.03.2011 of USD 230,071 and the second invoice is dated 15.03.2011 of USD 152,365 and the third invoice is dated 20.03.2011 of USD 280,118. He also submitted that only these three invoices of this year are noted in this order of RBI because the payment of remaining invoices were already realized by assessee before 28.02.2013 being the date of letter from RBI. Therefore, those invoices were not noted in this letter but extension stands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year is ₹ 4,23,73,388/- and all the other export receipts are within the time permitted by the RBI, there shall be no exclusion from the eligible deduction computed u/s 10A of the Act. 8. From the above para, it is seen that ld. CIT(A) has referred to the Tribunal order rendered in the case of ACIT Vs. Tara Jewels Exports Pvt. Ltd. (supra) and Master Circular No. 10/2011-12 dated 01.07.2011 and noted that as per this Master Circular of RBI, no specific time limit has been prescribed in respect of units in SEZs for realization and repatriation of the export proceeds. But he has not given any finding as to whether the assessee is a SEZ or not. The ld. DR of revenue has shown before us that as per the prospectus of assessee company dated 25.02.2011, the assessee is STP and not SEZ. Hence this Tribunal order is not applicable in the present case. As per the RBI Master Circular No. 10/2011-12 available on pages 2 to 4 of the paper book filed by the revenue, it is seen that for STP units, time allowed for collection of export proceeds in India is 12 months from the date of export and hence, it has to be seen as to whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have such powers consequent to the amendment of section 251(1)(a) by the Finance Act, 2001 w.e.f 01.06.2001. 3. With regard to foreign exchange gain/loss, the Ld. CIT(A) erred in directing the AO to verify the figures and details given by the assessee and accordingly allow the loss because such a direction of the CIT(A) tantamount to setting aside the assessment and the CIT(A) does not have such powers consequent to the amendment of section 251(1)(a) by the Finance Act, 2001 w.e.f 01.06.2001. 4. The Learned CIT(A), as an authority, whose powers are coterminous with that of the Assessing Officer, has erred in directing the AO to examine the details while the CIT(A) ought to have called for the remand report from the AO and decided the case on facts. 5. On the facts and in the circumstances of the case the learned CIT(A) erred in allowing the claim of the assessee regarding impairment of assets of ₹ 8,17,26,101/- since the assessee had not furnished any proof for such impairment of the software applications during assessment proceedings and since the depreciation claimed by the assessee company in respect of impairmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... einbelow for ready reference. 7. As regards disallowance u/s 14A of ₹ 94,60,849/-, it is the contention of the appellant that most of the advances/investments were made out of IPO proceeds and not with borrowed funds. He has requested that the CIT(A) may direct the AO to verify the sources and delete/reduce the disallowance u/s 14A of the Act. In view of the same the AO while giving appeal effect to verify the source whether the funds are out of IPO proceeds and not with borrowed funds and to that extent give the relief. 8.2 Forex Gain / Loss: As per Accounting Standard (AS) 11 The Effects of Changes in Foreign Exchange Rates , at each balance sheet date every company is required to report foreign currency monetary items like receivables, payables, 'cash, etc. using the closing rate. 8.3 Exchange differences arising on the settlement of monetary items or on reporting an enterprise's monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, should be recognised as income or as expenses (Foreign exchange g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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