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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI C.N.PRASAD, JM & SHRI RAJESH KUMAR, AM
आयकर अपीलीय अिधकरण, मुंबई "ायपीठ ‘जी’ मुंबई IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI "ी सी. एन. "साद, "ाियक सद", एवं "ी राजेश कुमार, लेखा सद", के सम" BEFORE SHRI C.N.PRASAD, JM AND SHRI RAJESH KUMAR, AM आयकर अपील सं/ (िनधा"रण वष" / Assessment Year: 2010-11 & 2011-12) बनाम/ Brandscapes Consultancy Income Tax Officer 5(1)(2) Pvt. Ltd. Room No.570, Vs. 2001/2002, ERA-2, Aayakar Bhavan, M.K.Road, Marathon Next Gen., Mumbai - 400020 Off. G. K .Marg, Lower Parel, Mumbai – 400013 "थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AACCB7654E (अपीलाथ" /Appellant) (""थ" / Respondent) .. Assessee by: Shri Vishwas Mehendale Revenue by: Shri H. M. Wanare सुनवाई की तारीख / Date of Hearing: 09.01.2017 घोषणा की तारीख /Date of Pronouncement: 04.04.2017 आदेश / O R D E R PER C.N.PRASAD, JM:
These two appeals are filed by the assessee against the different order of Commissioner of Income Tax (Appeals)-9, Mumbai [hereinafter referred to as the “CIT(A)”] for the A.Ys.2010-11 and 2011-12. A.Y.2010-11 & 2011-12
The only issue in both these appeals is regarding allowability of claim for exemption / deduction u/s.10B of the Income Tax Act, 1961 (in short “the Act”). The assessee also filed additional ground claiming that assessee originally while filing of return of income claimed exemption / deduction under 10A of the Act. However, subsequently, on the advice of the Auditors returned was amended claiming exemption / deduction u/s.10B of the Act. Now in the alternative the assessee claimed deduction u/s.10A of the Act, in case, the assessee was held that it is not entitled for exemption u/s.10B of the Act.
The learned counsel for the assessee vehemently submits that assessee is entitled for exemption / deduction u/s.10B of the Act and the CIT(A) following the decision of the Hon’ble Delhi High Court in the case of M/s. Regency Creations Ltd. (27 Taxman 322) dismissed the appeal of the assessee holding that in order to claim the exemption u/s.10B of the Act, the assessee should have obtained the approval from the competent authority i.e. Board of Approval which has specifically set up for approval an STE / EOU in order to qualify for the exemption u/s.10B of the Act. The learned counsel submits that since the petition filed by the assessee before the Board of Approval is still pending and no orders passed, the CIT(A) dismissed the appeal of the assessee and rejected the claim for exemption / deduction u/s.10B of the Act.
The learned counsel however submits that the assessee in the alternative also eligible for exemption / deduction u/s.10A of the Act, therefore, the learned counsel prayed before this Tribunal to given a direction to the Assessing Officer to consider the alternative plea for A.Y.2010-11 & 2011-12 allowing exemption u/s.10A of the Act. The learned counsel submitted before us copy of the auditors certificate certifying that assessee is eligible for exemption / deduction u/s.10A of the Act.
The learned DR had no serious objection in considering the claim for exemption / deduction u/s.10A of the Act if assessee is eligible subject to verification and examination by the Assessing Officer.
On hearing both sides we are of the considered view that the CIT(A) has rightly rejected the claim of the assessee for exemption / deduction u/s.10B of the Act observing as under:-
“5.1 I have carefully considered the facts and circumstances of the case, statement of facts, relevant assessment order, written submission, relied upon case laws and the arguments made by the LAR before the undersigned. The only substantive ground in this appeal is the denial of exemption claimed by the appellant u/s.10B of the I.T.Act. The AO has primarily denied the exemption claimed by the appellant on the ground that in the case of the appellant there is no approval from the competent authority i.e. Board of Approval, which has been specifically set up for approvals for an STE / EOU in order to qualify for the exemption u/s.10B of I.T.Act. While coming to this conclusion the AO has relied upon the decision of Hon’ble Delhi High Court in the case of M/s.Regency Creations Ltd. 27 Taxman 322, wherein it is categorically held that in want of approval from the competent authority i.e. Board of Approval in the instant case, exemption u/s.10B is not available to the assessee. Though the appellant has vehemently relied on the decision of ITAT Chandigarh in the case of M/s.Bebo Technologies Pvt. Ltd. (supra) alongwith some other decisions, but the same are not relevant because in the judicial hierarchy the decision of Hon’ble High Court will prevail upon the decision of ITAT. The appellant has also argued that it has applied for the approval to the BOA and his application has not been rejected so far. In this regard, it is stated that until the final decision of the Board of Approval is not received it cannot be presumed that ultimately the same will be in favour of the appellant. Since till date no approval has been received from the BOA, therefore, respectfully following the decision of Hon’ble Delhi High Court in the case of A.Y.2010-11 & 2011-12 M/s.Regency Creations Ltd., it is held that in want of approval of BOA, the AO has correctly denied the exemption claimed by the appellant. The ground of appeal is therefore dismissed.”
7. However, at the same time we are of the view that the alternative claim of the assessee for exemption / deduction u/s.10A of the Act should be considered as the assessee has claimed 10A of the Act exemption / deduction originally in the return of income filed but later modify to 10B of the Act. The Assessing Officer shall examine the allowabilty of the claim u/s.10A of the Act thoroughly and if it is found that the assessee is eligible for the exemption / deduction u/s.10A of the Act the same shall be allowed. Therefore admit the additional ground and restore this issue to the file of the Assessing Officer who shall decide the allowability of claim u/s.10A of the Act in accordance with law and the assessee shall provide all necessary details in respect of its claim including the audit report etc. The Assessing Officer should given proper opportunity of being heard to the assessee.
In the result, both the appeals filed by the assessee are hereby 8. Allowed for statistical purpose.
Order pronounced in the open court on 4th April, 2017. (RAJESH KUMAR) (C.N.PRASAD) लेखा सद" / ACCOUNTANT MEMBER "ाियक सद"/JUDICIAL MEMBER मुंबई Mumbai; िदनांक Dated : 4th एि"ल, 2017 MP A.Y.2010-11 & 2011-12