ALTRUIST TECHNOLOGIES PVT. LTD.,SHIMLA vs. DCIT, CIRCLE, PARWANOO

आदेश/Order

Per Sanjay Garg, Judicial Member:

The present appeals have been preferred by the assessee against the separate orders of the Commissioner of Income Tax (A), Shimla [hereinafter referred to as ‘CIT(A)’]

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla 2

were heard together and are being disposed of by this common order.

is taken as a lead case, wherein, the grounds raised by the assessee are as

under:-

together for adjudication. The brief facts relevant to the issue are that

the assessee company is engaged in the business of Information and

Communication Technology since assessment year 2006-07. The

assessee claimed deduction u/s 80IC of the Income-tax Act, 1961 (in

short 'the Act') in respect of its two units namely Unit–II and Unit-

III. For the Unit-2, the assessee took the initial assessment year as

2006-07 and for Unit-3, the initial assessment year for claiming

exemption u/s 80IC of the Act was taken as assessment year 2010-11.

The Assessing officer, however, observed that the business operation

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla 3

of the assessee company at both the business premises (Unit II &

Unit III) was identical and further that Unit III was carrying out its

operation at the registered office of the Company which was of Unit

No. II also, hence, it amounted spitting / reconstruction of an

existing business. He, therefore, held that Unit-III was not a new

Unit within the meaning of section 80IC of the Act and its initial

assessment year would be the same as of the Unit-II. The assessee

unsuccessfully contested the appeal before the CIT(A).

the findings of the lower authorities that both the Units were being

run by the assessee from the same premises was wrong. That the

Unit–II was being operated from STPI Building, Shimla w.e.f.

30.3.2007. The Ld. Counsel for the assessee in this respect has placed

reliance upon the DIC (District Industries Centre), Registration letter

dated 30.3.2017, wherein, the address of the assessee Unit–II has

been mentioned as ‘STPI Building, Black 24, SDA Complex Shimla.

It has been claimed that, whereas, Unit-III of the assessee was being run from 4 t h Floor, Altruist Technologies Private Limited, Behind

Hotel Firhill, Near Tunnel No. 103, Shimla. The Ld. Counsel in this

respect has relied upon the copy of the letter of the DIC Registration

of Unit-III placed at paper Book page No. 42. He has further

submitted that with a view to establish a new unit (Unit-III), the

assessee company on 21.1.2008 had purchased a building at the

aforesaid address of Unit-III. The premises at that time was on rent

to some outside parties. Thereafter, the premises was vacated and the

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla 4

registered office of the assessee company was shifted to said

premises in assessment year 2009-10. The necessary registration and

approval were obtained and new Unit-III was started at the said

premises, the operation of which had commenced in assessment year

2010-11 with new employees and new plant & machinery. The Ld.

Counsel for the assessee has demonstrated that Unit–II and Unit-III

were being operated from separate buildings with separate

employees, separate clientage and separate sale tax registration

numbers and separate registration with District Industries Centre, as

given in the following charts:-

Particulars Unit-II Unit-III

Name and address of Altruist Technologies Altruist the Unit Pvt Ltd, Unit-II, Block Technologies 24, SDA Commercial Pvt Ltd. Unit- Complex, STPI III, Building kasumpti, 4thFloor,Altruist Shimla Mount, Behind Firhill, Shimla

Distance between the 7 Kms. two units Service Tax AAFCA3725NST001 Registration No. Sales Tax Registration 9658 14158 No. Registration with No. 02/011/21/00038 No. District Industries dated 30.3.2007 02/11/21/00256 Centre, Shimla effective from 31.12.2009

Date of 21.09.2005 31.12.2009 Commencement of Production Initial A.Y. u/s 80-IC A.Y. 2006-07 A.Y. 2010-11 Accounts Books Separately maintained Separately and duly audited maintained and duly audited

Investment in 45,16,158/- 76,15,962/-

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla

Computers (being (100% new primary plant & purchases with machinery) in no transfers A.Y.2010-11 form Unit-II)

Attributable profits 20,85,23,896/- 1,06,90,722/-

No. of employees as of 175 employees 27 employees date of formation of Unit-3.

Unit-II

Clients Unit II –invoiced amounts (Rs.) Bharti Airtel 173825288 Bharti Airtel –Simla 1108148 Bharti Airtel-Mohali 5820103 Bharti Airtel –Kolkata 125176 Bharti Airtel-Delhi 1428765 Idea Cellular Ltd 11223942 MTNL-Delhi 3865460 RCIL-Mumbai 121567046 Tata Teleservices Ltd., 25859599 Mumbai Total 34,38,23,527

Unit-III

Clients Unit-III invoiced amounts (Rs.) Aircel Lad 1061050 Hungama Debtor 4002574 MTNL-Mumbai 258361 Shotformats Digital Productions Pvt. Ltd 1469686 AMA India Consultants Income 610786 Federation of All India Aluminum Utensils 18000 Manufac The Tribune Trust 200000 Total 17,169,557

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla 6

being serviced from Unit–III were fresh, the company earlier was

giving services in relation to the one product i.e. Voice Chat to its

clines like Airtel, Reliance, Idea and TATA. However, since the

business of the company had grown up and need was felt to start a

new unit also so as to expand its area of service, hence, a separate

unit was started wherefrom the services into other products to other

Non-Telco companies / clients in the field of Information

Technology and Software services were provided. That the Unit-III of

the assessee company has been running in the company owned

premises spread over four floors and has tremendous capacity to grow

and make big mark in Mobile Value Added Services and information

technology industries and that the business of the company has seen a

tremendous growth. It has been further explained that though, the

building used of Unit –III was earlier registered office of the

Company, however, the said building now has been used for the

operation of Unit-III, whereas, the Unit-II has been separately

running from another building situated at a distance of 7 Kms.

been rebutted by the lower authorities. The only objection put by the

Assessing officer was that the building / address of Unit-III was

earlier the registered office of the company, however, it is not the

case of the Assessing officer that Unit-II was also run from this

building. In our view, merely because the assessee company had

started conducting its operation of Unit–III, from its registered

office, that does not mean that the assessee company has been split

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla 7

out or reconstructed out of Unit-II. There is no allegation that the

plant and machinery of Unit–II has been used for Unit-III. Moreover,

the assessee company has also not only shown tremendous growth in

business but has also demonstrated that it has been dealing with and

attracting new clients and servicing in new products. In view of this,

we do not find any justification on the part of the lower authorities in

denying the claim of the assessee by assuming that Unit-III was not a

new unit or that it was started by way of spitting or reconstruction of

an existing unit. The orders of the lower authorities are therefore,

set aside and the Assessing officer is directed to give relief to the

assessee as per the provisions of section 80IC of the Act treating the

Unit-III as a separate and distinct unit. The appeal of the assessee is

hereby allowed.

is identical, our finding arrived at in ITA No. 330/Chd/2018 will

apply mutatis-mutandis to appeals filed by the assessee for other

assessment years i.e. in assessment year 2011-12 (ITA Nos.

331/Chd/2018) and assessment year 2012-13 (ITA No. 332/Chd/2018).

Accordingly, these, appeals of the assessee are allowed.

ITA No. 428/Chd/2018 (A.Y.2014-15) 8. In this appeal, besides the identical grounds raised in ITA No.

330/Chd/2018, which we have adjudicated above, the assessee has

ITA Nos. 427 & 428, 330 to 332/Chd/2018-- M/s Altruist Technologies Private Ltd,Shimla 8

taken another ground agitating the action of the CIT(A) in confirmation the disallowance of Rs. 7,02,090/-.

Order pronounced in the Open Court on 02.11.2018

Sd/- Sd/- ( बी , आर . आर . कुमार / B.R.R. KUMAR) (संजय गग� / SANJAY GARG ) लेखा सद�य/ Accountant Member �या�यक सद�य /Judicial Member

�दनांक/Date: 02.11. 2018 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to :

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar