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Income Tax Appellate Tribunal, KOLKATA BENCH “B” KOLKATA
Before: Shri N.V. Vasudevan & Shri Waseem Ahmed
आदेश /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the assessee is arising out of order of Commissioner of Income Tax (Appeals)-VIII, Kolkata in appeal No.222/CIT(A)-VIII/Kol/10-11 dated 07.01.2013. Assessment was framed by DCIT, Circle-7, Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 28.12.2010 for assessment year 2008-09.
Sole issue raised by assessee in this appeal is that Ld. CIT(A) erred in not allowing the deduction of ₹ 46,11,220/- u/s. 10A of the Act on account of profit in business of export, software, manufactured / produced by assessee. A.Y. 2008-09 Somnath Kundu v. DCIT Cir-7, Kol. Page 2 The facts of case are that assessee is an individual running his proprietary concern under name and style of M/s Techsoft. During the year under consideration, assessee has earned income from his business and interest on fixed deposit/NSC bond and savings bank account. The assessee engaged in this business of export of software and having registration with Software Export Technology Park (STP for short). The agreement with STP was registered on 14.10.2006 which granted the status of 100% export oriented unit under STP. During the year, assessee claimed exemption u/s. 10A of the Act for the profit arising out of software export business, however, AO has disregarded the claim of assessee on the grounds that the claim made by assessee u/s. 10A was denied in the AY 2007-08 which is immediately preceding year to the relevant assessment year.
Aggrieved, assessee preferred appeal before Ld. CIT(A) who upheld the action of Assessing Officer by observing as under:- “I have carefully considered the submission put forth on behalf of the appellant along with the supporting evidences furnished perused the facts of the case including the observation of the AO in the assessment order and other materials brought on record. This issue of appeal has also come up before me for adjudication in the appellant’s own case while deciding the appeal for AY 2007-08. There is absolutely no change in the facts of the case this year from the facts of the previous AY 2007-08. The appellant has also mostly relied upon the submission made for the appeal of the AY 2007-08 in the present appeal also. After considering the facts of the case and relying on the decision of the Hon'ble ITAT, Mumbai in the case of Chenab Information Technologies (P) Ltd., v. Income Tax Officer, (2008) 25 SOT 432, I have decided this issue of appeal in Appellate Order No. 315/CIT(A)-VIII/Kol dated 22.07.2011 for the AY 2007-08 against the appellant.”
Being aggrieved by this order of Ld. CIT(A) assessee preferred second appeal before us on the following ground:- “
1) That the Ld. Assessing Officer as well as Ld. CIT(Appeals) grossly erred in not allowing deduction U/s 10A of Rs.46,11,220/- on account of profit in business of export of software manufactured/produced by the appellant. A.Y. 2008
09. Somnath Kundu v. DCIT Cir-7, Kol. Page 3 2) That the Ld. Assessing Officer as well as Ld. CIT(Appeals) grossly erred in holding that business of M/s Techsoft was formed by splitting up or reconstruction of business of m/s Techsoft Pvt. Ltd.
3) That the conclusion arrived at by Ld. A.O as well as Ld CIT(Appeals)is arbitrary, unjustified and/or misapplication of the facts, and thus liable to be reversed.”
Shri Subash Agarwal, Ld. Authorized Representative appearing on behalf of assessee and Shri Arun Kanti Sinha, Ld. Departmental Representative appearing on behalf of Revenue.
We have heard rival contentions and perused the materials available on record. Ld. AR submitted that AO disallowed the claim of assessee u/s. 10A of the Act on the ground that his predecessor has disallowed the claim in the preceding year of the same assessee and the same was confirmed by the ld. CIT(A) as well but the same issue has been decided by this Hon’ble Tribunal in dated 15.09.2015 for A.Y 2007-08 in assessee’s own case in his favour. Ld. DR on the other hand, vehemently relied on the orders of authorities below. From the aforesaid discussion and we find that in assessee’s own case in ITA No. 1209/Kol/2011 (supra), wherein this Tribunal allowed the appeal of assessee and the relevant extract of this order is reproduced below:- “5.8 We find that section 10A of the Act is a special incentive introduced by legislature in order to promote exports of computer software, It enabled services and therefore, the same has to be construed liberally. It has been held by Hon'ble Supreme Court in the case of Bajaj Tempo Tempo Ltd. Vs. CIT reported in (1992) 196 ITR 188 (SC) “A provisions in a taxiing statue granting incentives for promoting growth and development should be construed liberally; and since a provision for promoting economic growth has to be interpreted liberally, the restriction on it too has to be construed so as to advance the objective of the provision and not to frustrate it.”
5.9 In view of the aforesaid facts and circumstances of the case we hold that all the conditions stipulation section 10A of the Act has been satisfied by the assessee and accordingly, he is entitled for claiming A.Y. 2008-09 Somnath Kundu v. DCIT Cir-7, Kol. Page 4 deduction u/s. 10A of the Act. Accordingly, the grounds raised by the assessee are allowed.
From the above discussion we find that the assessee is entitled for the deduction under section 10A of the Act. Taking a consistent view in assessee’s own case (supra) we allow the ground raised by assessee.