M/S.IBS SOFTWARE SERVICES P. LTD,TRIVANDRUM vs. THE ACIT, TRIVANDRUM

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ITA 380/COCH/2016Status: DisposedITAT Cochin07 November 2024AY 2008-09Bench: SHRI SATBEER SINGH GODARA (Judicial Member), SHRI AMARJIT SINGH (Accountant Member)12 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal directed the Assessing Officer to re-adjudicate the Section 10A deduction claim based on previous judicial precedents. The Section 10AA deduction claim was restored to the Assessing Officer for fresh adjudication, with the onus on the assessee to provide supporting material.

What were the facts?

The assessee appealed against the rejection of its Section 10A deduction claim. The Tribunal noted that a previous coordinate bench had partly allowed a similar claim for earlier years, which was upheld by the jurisdictional High Court.

What were the issues?

Whether the assessee is eligible for Section 10A and Section 10AA deductions. The validity of Section 14A disallowance in light of the nature of investments and income.

Which sections of the Income-tax Act were involved?

Section 10A,Section 10AA,Section 14A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN

Before: SHRI SATBEER SINGH GODARA & SHRI AMARJIT SINGH

Hearing: 21.08.2024Pronounced: 07.11.2024

This assessee’s appeal ITA.No.380/COCH./2016 along with stay application S.A.No.26/COCH./2018, for assessment year 2008-2009, arise against the order of the learned CIT(A),

2 ITA.No.380/Coch./2016 & SA.26/Coch./2018 Trivandrum in appeal ITA.No.4/TVM/CIT(A),TVM/2015-16, dated 12.07.2016, in proceedings u/sec.143(3) r.w.s.144A of the Income Tax Act, 1971 (in short the "Act")

Heard both the parties. Case files perused.

2.

The assessee pleads the following substantive grounds in the instant appeal :

3 ITA.No.380/Coch./2016 & SA.26/Coch./2018

4 ITA.No.380/Coch./2016 & SA.26/Coch./2018

3.

Suffice to say, the assessee’s first and foremost substantive ground seeks to raise sec.10A deduction claim which has been rejected by both the learned lower authorities. It emerges during the course of hearing that the instant first and foremost issue is no more res integra keeping in mind the fact tha this tribunal’s earlier learned coordinate bench; dealing with the assessee’s appeals itself to 857/ Coch./2001 and ITA.No.847/Coch./2007 for the assessment years 2000-2001 to 5 ITA.No.380/Coch./2016 & SA.26/Coch./2018 2004-2005, had partly accepted the same for statistical purposes; which in turn, stands upheld in hon’ble jurisdictional high court’s judgment dated 20.07.2018 in assessee’s Tax Appeals arising therefrom ITA.No.415/2009; reading as under :

6 ITA.No.380/Coch./2016 & SA.26/Coch./2018 7 ITA.No.380/Coch./2016 & SA.26/Coch./2018 8 ITA.No.380/Coch./2016 & SA.26/Coch./2018 9 ITA.No.380/Coch./2016 & SA.26/Coch./2018

4.

It is in this factual backdrop that we adopt judicial consistency in absence of any distinction pinpointed so far as the assessee’s impugned sec.10A deduction and direct the learned Assessing Officer to re-adjudicate the assessee’s instant first and foremost substantive grounds in very terms. Ordered accordingly.

5.

Next comes the assessee’s second substantive ground that both the learned lower authorities ought not to have rejected it’s sec.10AA deduction claim raised for the first time in the impugned assessment year i.e., A.Y. 2008-2009.

6.

Learned DR invited our attention to para-5 page-10 of the CIT(A)’s lower appellate discussion that the latter has 10 ITA.No.380/Coch./2016 & SA.26/Coch./2018 affirmed the assessment findings once the assessee had not placed on record the cogent supportive material.

7.

Learned counsel’s case on the other hand is that assessee had raised the impugned deduction claim u/sec.10AA of the Act for the first time qua a new undertaking and also placed on record the relevant facts before the lower appellate authority. He further refers to assessee’s pleadings in ground no.4 in this regard. Coupled with this, learned counsel has filed three paper books as well in support of the assessee’s sec.10AA deduction claim. Faced with this situation, we deem it appropriate in the larger interest of justice to restore the assessee’s second substantive ground back to the Assessing Officer for his afresh adjudication, preferably within three effective opportunities of hearing, subject to the rider that it shall be the taxpayer’s onus and responsibility only to plead and prove all the relevant facts in consequential proceedings. Ordered accordingly.

8.

Lastly comes sec.14A read with Rule 8D disallowance of Rs.10,54,082/- made in the course of assessment and upheld in the lower appellate discussion. Learned counsel inter alia submits that not only the assessee had derived it’s exempt income from investments made in foreign subsidiaries which is taxable but also investments

11 ITA.No.380/Coch./2016 & SA.26/Coch./2018 considered in computing the disallowances herein have not been restricted only qua those which have actually yielded exempt income in the relevant previous year. The Revenue’s case in light of these circumstances once we are restoring the assessee’s former twin substantive grounds to the Assessing Officer; this last issue may also follow the suit. We accordingly allow the ground of the assessee for statistical purposes in very terms. Ordered accordingly.

9.

This assessee’s appeal ITA.No.380/Coch./2016 is allowed for statistical purposes in above terms. It’s stay application S.A.No.26/Coch./2018 stands rendered academic and dismissed. A copy of this common order be placed in the respective case files.

Order pronounced in the open Court on 07.11. 2024.

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