THE CHIKHALI URBAN COOP. BANK LTD.,BULDHANA vs. THE DY. CIT- AKOLA CIRCLE, AKOLA

INTHEJNCOME IAX APPELLATE TRIBLNAL BENCL NAGPUR BEFORE SHRI P.K. BANSAL; VP AND SHRI AMARJIT SINGH, JM (T.A Nos.385/Nag/2012 & 24/Nag/2015 Assessment Year; 2009-10& 20Il-12 ITO, Ward-1[4), Room No, Vs. M/s Vista Software 504, Stl Floor; MECL 107, Bajiprabhu Nagar, Building, Seminary Hills , Nagpur Pin:440010 Nagpur. RiuTaNUr /oft31eJ1R / PAN/GIR No. AAFFV3O86N (Appellant) (Respondent) CO.Nos.02/Nag/2013813/Nag/2015 Assessment Year2009-1082011-12 M/s Vista Software Vs. ITO, Ward-1(4), Room No. 107 _ Bajiprabhu Nagar, 504, Sth Floor, MECL Nagpur Pin:440010 Building; Seminary Hills, Nagpur; F7O Rian /ofta1e#f1<&_ /PAN / GIR No. AAFFV3O86N (Appellant) (Respondent) Assessee by: Department by; VVSaranjame A.R. Ninawe Date of Hearing: Date of Prottouncement: QRDER 29,06.2017 15.09.2017 PERAMARUT SINGH_JMz The assessee a8 well as revenue have filed the above mentioned appeals as well as cross-objection against the different orders pagsed by the Commissioner of Income Tax (Appeals)-I, Nagpur [hereinafter 38 i7r4 29 ITA. Vo_3AN Vag/2012 ZANag/2015 A.Y.2u9_[0 & 2011-12 reterred to as thc "CIT(A)" ] dated [4.08.2012 15.10.2014 relevant to the assessment years 2009-1082011-12 respectively: ITA NQ 385M/UZ: 24 The revenue has filed the present appeal against the order dated [4.08.2012 passed by the Commissioner of Income Tax (Appeals)-(1) Nagpur, [hereinafter referred to a5 the "CIT(A)"] relevant to the assessment years 200g-10, 3_ The revenue has raised the following grounds:- 1_ In facts and Circumstances Qf the case and in Iaw, the Ld CIT(A} erred in granting relief ws 10A even though the condition laid down in Sec. |0A(S}, fhat form No. 56F has To filed alung with the rerurn Uf income, wGS not fulfiiled 2 In fucts &nd Circumstunces 0f tke case und in law , alterntate claimes whethet under section IOA 0+ sectium JUB, could not have been entertained unless the Claim ts staturorily made per decision in 284 ITR 323(C}. 3 Infacts und Circumnstances %f' the case ond in law. Ihe Ld CIT(A} erred in conclding thal the assessee is gligible for decluction ws 10A withUut uppreciating the fuct that the assesse@ haf nof set up its business in SEZ G;S mandated Ws FOA(2)Wfc) %f tke Act 2 Avy Other ground which may be pressed Q5 the time 01 hearing elatt ) 4 The brief facls of the case are that the assessee filed its return of income on 30.09.2009 declaring income to the tune of Rs Nil, The retum was processed Wls 143(1) of the L.T. Act 0n 25.01,2011. The case was selected for scruliny through CASS. Accordingly, notice Ws 143(2) and 142(1) of the Act were issued and served upon the Lp ITA: Nu.385/ 4p/2012 24/, ag/20ls A-Y 2009-10 . 2010-12 assessee. The assessce dcrivcd its income from business Of IT scrviccs like busincss processing unit; data entry: mapping, digit station etc. The assessee claimed the deduction Us IOB of the Act amounting to Rs.S0,74, 131/-- Tlowevcr vide Form 566, repOrl requisition Ws [0B of the Act the assessee claimed the deduction u/s 1OB of the Act to Rs.49,17,363/-. Further, vide schcdule ~Ato annexure-A of repori of forim 560, the Chartered Accountant has shown other profit of Rs,1,35,602/- It was not disclosed by the assessee while filing the retum of income- Thc claim of the assessee under section ] (B of thc Acl was examined It was the condition for claiming the deduction W/s 1OB that the undertaking should be approved by the Board. The assessee did not comply with the basic condition. The a5se5jee was registcred 85 export oriented unit(E,O.U,) in Software Technology Park of India Nagpur and a i0o% (EO.U.) under STPI schene cannot be equated with #pproval by the Board. Thereafter, the notice wa5 given and afler the considering the reply, the claim of the assessee was declined to the tune of Rs4917363/- and the said amounl was treated as income of' assesgee_ Feeling aggrieved, the assessee filed an appeals before the Commissioner of Incole Tax Appeal who allowed the claim of the assessec U/s 10A, therefore; lhe revenue has filed the present appeal before US. JSSLE NOLto 32 IT4 N3SSN:g2012 24/NagZUIS A.X'; Zuiny-[O & 204-12 5 All the issues arc inlerconnected therefore are being taken up Logether for adjudication: Under these isSues the revenue has challenged the allowance of exemption Ws 1OA of the Act by the CIT(A} It is argued by the Ld Representative of the revenue that the assesgee raised the claim Ws 1O of the Act but the CIT(A) has allowed the chain} us IOA without giving finding with rcgard to exemption of u/s IOA and also without giving the finding with regard non-furnishing the Form No. S6Ftherelore, in the said circumstances order passed by the CIT(A) is wrong and against Jaw and facts therefore the finding of the CIT(A) is liable to be set aside. Howevcr; On the other hand thc Ld. Representative of the assessee has placed reliance upon the order passed by the CIT(A) in question; After giving the careful thoughts to tlie argument advanced by the Ld. Representative of the partics and perused the record carefully, we noticed that the assessee raised its claim before the Assessing Officer in connection with Section 1OB of the Act; However; the assessee raised alternate claim of same in view of the provision u/s 1OA of the Act; The Assessing Officer rejected the claim of the assessee uls 10B of the Act on account ol non-producing the certificate approved by the Board and also declined the claim Ws 10A of the Act on account of non-_ [urnishing of the form S4F. However, the CIT(A) allowed the claim of the assessee W5 JOA of the Act; The contention of the assessee is that the assessee claimed the deduction a8 export oriented unit (E.O.U.) under the Software Technology Park of India schcme ITA. No.38S/N9g/2012 Z4NNgZ0H5 AY. 2009-10 & 2011-12 (EQ.U:) Ws IOB of thc Act The STPI scheme was coiing under the rulc of Govcrment of India. Therefore the same was having [arger applicability within the E.O.U. approved by the Board. The assessee 8 clain] was declined uls 10B of the Act; The AO also declined the claim W/s IQA of the Act un account of non-furnishing 1 Form No: 56F. The CIT(A) allowed the claim in view of the provision Ws 1A whereas in the earlier years the claim of the assessee was allowed in view of the provision Us IOB of te Acl The finding of the CIT(A) is hereby reproduced &s Under for ready referencc:: PE LATe 3 ) [have gone through the facty Qf the case. during the' AsFeSsmnent In fhis caje proceedings w$ IOB appellunt has made & claim amounting {0 Rs.50,74,1314- 56G the However vidz appellai form nad #o_ restricled it? Etaim Rs49,17,63/1 Ws TOR 0 "The main ground on which AQ has rejected the claim %f the appellant for deduction Ws export I0B ix thut priented is is unit dn functioning from S?P} and Mor Gedertaking Ihat has been approved bythe Board fod Gm deduction Ws IOB As regards {he alternaee claiming clain %f appeltant tha: deduction Ws IOA mav be allowed tht the if Wvas' observed by AO prescribed from no. J6F iy required to be filed with relurn % income along Jt H'aS mandattrily required that the aSSessee get & report from the S6F Chartered Accourt ir form na before the due date %f filing %f rerurn Ws 139/} asfesSee has fuiled 43 tr) {he adhere to this criteriq, deduction Ws 104 has been denied the cluim %f 5,1 In the decision %f the Hon"ble Kurnataka #pon by #ie High Curt relied appellant in the Crkft of CIT Technologies Ltd Vs; Infosys reported in 65 DTR 27 { been hcld is relevant ThO It has 'concurren_finding arrived Ot appellate authority and the by the 40, sofmware Tribunal thdi income from sale of WGs trading income and Mof unassailahle capital and said gains A5 Sce huving estahlixhment tuken place Qfier the 0f STP untit. assessee i5 entitled f0 exemption Ws 5 03 ITA. Vo.385/ Nag/2012 24INag201s A.Y. 2UMy-]0 & 2011-12 {94[,faet thcxt !he Assessee {id n0t claim exemption Ws !0A #hile filivg the retn canrt come in the way Qf 'holdlintg that assesset 0 enfitled tu benefit wf secitmn I0}A ~ince #t 1VtES alternaiety argued hath before the AO and he appellate quthority that f tkc incrne is fredied 4S Irading receipl, exemiptiun Ws [QA may be grated 5.2 In Ihiy Context it i5 ALsv worthwhile fo consider the ardev of Mte Homble TTAT Nogpt" bench in ITA No, 176/Negzung & 13-U8-2009 in the cuse %f" Infospectrum Pvt. Ltd The issue MitiS decided D}} similar fact whether appellant WES enfitled t0 deduction Ws IOA or 5 IO B WUS cligible There has been CI honafide error an lhe part Qf the gfsefeg during the course %f Oissessmemi proceedings. fowever it is evidemt that all [e requisite conditions for cvailing deduction Ws [0A have been fulfitled In fuct it ix necessary t} note that the oppellant" ws eLlA; 1OB has been Allowed ir tlte earlier yeas fromn A.Y. 2007-08 fo AX 2008-09. In the decision %f the IlAT; Hyderabad in the 1 c(se %f' Mis Visu Internatlonal Ltd Vs. DCIT in ITA No, 696/HlydzOl! for 4,X 2006-0z fJze' Hon 'ble Tribunal has endorsed the view thaf ouce the COmany has been allowed deductiolt Ws JQR Im previous Assessmene years; [lte: Sume ccmon bg suhsequenlly denied Om fhe presumption that fhe C.SSeSSee is nt 0 }00% Export Oriemted Unit for the reason that necejsay ralification and approval 65 not @vailable witk e cScSSCE contpany Tnerefore cons- idering the facts in totality amd retying Om Ihe decisiun Of' !he Hon ble Karnataka High Court reported in 63 DTA 271 (supra) direct the A0 10 allow the appellant deduction ws 10A. 6 On appraisal of the above said finding; we noticed that the asse3gee was seeking the claim IVs OB of the Act in earlier years which was allowed by the Tevenuc. This ycar the claim was declined on account of non-fumishing thc form non S6F. However; the same was furnished later on which was not considered the claim of the assessee was also justifiable in view of the provision WJs IQA of the Act because the Unit of the assessee 15 4 Export Oriented Unit Lv4 ITA. Nu.385/Nag2012 24Nag/2015 AY. Zu9-I0 & ZUm1-12 (E.O.U) under Lhe Softwarc Technology Park of India, scheme which false within the rule of Government ol India. The cage of the assessee is not liable to be declined on account of taken ground if, otherwise the case of the assessee false within the purview of Section 10A Or 1OB of the Act: While passing the order the CIT(A) has relied upon the decision of the Hon'ble Karataka High Court in the case of CIT Vs. Infosys Technologies Ltd. reported in 65 DTR 271 and the decision of the Hon ble ITAT Nagpur Bench in the ITA, No 176 Nag/2009 dated 13.08.2009. The CIT(A) has also relied upon the RELLAY decision of the Hon'ble ITAT in the case of Ws Visu International Ltd; Vs. DCIT in ITA No. 696/Hyd/01 in which the Hon 'ble ITAT was of thc View that the case ofthe ussessee was not liable to be declined if the claim of the assessee had been allowed in earlier years; Taking into account a]l the facts and circumstances, we are of the view that the CIT(A) hnas decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate state, Accordingly, this issue is decided in favour of the asse5gee against the revenue CONO_Q2Nug ul} 7 The facts of the case are quite similar to the facts of the case a8 mentioned in ITA. No. 385/Nag/2012 therefore, there is no need tD repeat the sanle. 45 [A. No.3R5/NNag/2012 2WNag/415 A. #.2009-10 & 2014-12 8 The assessec has raised the following cross-objection: On the fauts and in the circums}altces of the case fhe La. CIT{A}, wa3 lawfully justified in grunting rclief Ws I0A in view %f the fact tuf the respondent WaS ready with the compliance of the provisions of section 10A(5) during the {issessmemt proceedings victe letter duted 12.I2,203] reproduced by respondent befare the Ld, 40 appellant (IS mentiuned On puge J pard 2 of his uSscssment order, #herein cJ alternative plea #3 {akev hy the respndent but sufficient opportniry' waS nol given t him: The (Iount 0f claimed alluwed by Ld. CII(A) being Rs, 50,74,130/- 2 f& That 0n Ile facts und in the circumsfances %f the Cuje im law' alternalive claims can be raised if they Gre lawful and W} based by on pracedlural issue aid noi substantive issue: (6} That on the facts and in Ihe circumstances Qf the case the Ld, 40 wm3 erred in lawv t0 quote the decision %f the Honourable Apex Court in case of Goetze (india} Lid Vs; CIT reporied in 2006 284 ITR 323 (SC) withoul carefully going through Ihe concluding sentence Qf the judgment which in fact is infavour of the respondent 4S the judgnent has got restricted application for Ihe assessing officer and said judgment does nof fransgrex: thc powery of tkis honourable Ixibal (c) Thal in view of the decision of the Hun'ble Apex Court in cuse of Jule Corporalion of India Vs. CIr reported in 187 ITR 688, the a5sessee can raise fresh issue before the A.C Ihich tlie respondent did On the facts and in the circumstances 0f tle case the Ld CIT(A) was fully justified in Iaw ID allow the deduction wy IOA t Ihe respondent when the main conditions Iaid down iv the said seclion gre fully satisfied and CIT(A) Acts' Io appreciate factr which g0 In prove that the powers snbytantic} mandalory cumpliance wuf made by #e respondent; ISSWE NOLto Z6 8 Kilntg 1 Jwoo:) kl ITA. No,38S/Nag2012 2A'Nag/201S A.Y, 20us-I( & 2011-12 9 Under these issues the assessec took the cross-objection with regard to the lawful finding of the CIT(A) in connection with allowance of" exemption 45 IOA of the Act. Since the mattet of controversy has already been decided in favour of thc absessec therefore; the crosS-objection is hereby ordered to be allowed in terms of' the decision while deciding issue no. 3 in ITA: NO 385/M/20012. Accordingly, the cross-objcction is hereby allowed, Np EL: [TANQ ZAINug2O1S& COLYNug/Osk 17 IO_ The facts of the present case are quite similar to the facts as mentioned in ITA. No; 38S/Nag/2012 However; the figure is different The matter 0f controversy is also the samc a8 raised in ITA NO. 38S Nag/2012. Since the matter of controversy has already been decided in favour of the assessee therefore, the present appeal is also hereby ordered to be dismisse in terms of the decision while deciding issue no. 3 in ITA NO 385/M/2012. Accordingly, the cross-objcction is hereby allowed. 42 ITA_ No.385/N4gZ012 24/.Nag/2015 A.Y. 2009-i0 & 20!1-12 I]_ In the result, appcaly of the tevenue arc hercby dismtissed ahd cross-objection of the assessee is hercby ordered to be allowed. Order pronounced in the open court on 15.09.2017 Sd_ Sd;_ (PK BANSAL) (AMARJIT SINGH) JUDICIAL MEMBER VICE PRESIDENT NAGPUR; f-idDated 15.09.2017 Xp ringh gnumnf i@diGopyofthe Oderforwarded_tq 1_ adlnff/ The Appellant 2 nrqrilp The Respondent 3 4F4FrrYr(*ia)/ "The CIT(A} 4 HRTJIYIC CIT 53 @igAfaffu aratritqafru;, DR [TAT, Nagpur Lo: Taula IGuard file PELL JrrITTHR/ BY ORDER wrmdna / /} / ~vl JANETHa titr Fetusb} Asitiyistrar} #egistant Registrar JTTERo1ruesteR7 RNNNXUPUR Incame Tux Appellate Tribueal 1/7g7 Rinytra / Nagpur Bench 10 '3331 L1