M/s. H.B.A. International India Pvt. Ltd., New Delhi V. ITO, New Delhi

CO 405/DEL/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9388 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 24-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 28-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: VIJAY AGARWAL
• Keywords: Opportunity of being heard; Competent authority
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C NEW DELHI BEFORE SH. R. S. SYAL, AM AND SH. RAJPAL YADAV, JM ITA NO. 4787/DEL/2011 : ASS TT. YEAR : 2008-09 ITA NO. 2794/DEL/2013 : ASS TT. YEAR : 2009-10 INCOME-TAX OFFICER, WARD 12(3), NEW DELHI VS M/S HBA INTERNATIONAL INDIA PVT. LTD., L-41, CONNAUGHT CIRCUS, NEW DELHI (APPELLANT) (RESPONDENT) C. O. NO. 405/DEL/2011 : A SSTT. YEAR : 2008-09 M/S HBA INTERNATIONAL INDIA PVT. LTD., L-41, CONNAUGHT CIRCUS, NEW DELHI VS INCOME-TAX OFFICER, WARD 12(3), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AABCH2968Q ASSESSEE BY : S/SHRI ARUN CHHABRA & VIJAY AGARWAL REVENUE BY : SHRI SATPAL SINGH DATE OF HEARING : 24.3.2014 DATE OF PRONOUNCEMENT : 25.3.2014 ORDER PER R. S. SYAL , AM: THESE TWO APPEALS BY THE REVENUE FOR THE ASSESSMENT YEARS 2008- 09 AND 2009-10 AND ONE CROSS OBJECTION BY THE ASSES SEE FOR THE ASSESSMENT YEAR 2008-09 INVOLVE SOME COMMON ISSUES. WE ARE, THEREFORE, PROCEEDING TO DISPOSE THEM OF BY THIS CO NSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 4787/DEL/2011, CO NO. 405/DEL/2011 & ITA NO. 2 794/DEL/2013 HBA INTERNATIONAL IN DIA PVT. LTD. 2 ASSESSMENT YEAR 2008-09 2. THE ONLY ISSUE RAISED THROUGH VARIOUS GROUNDS IS AGAINST THE DELETION OF DISALLOWANCE AMOUNTING TO RS. 1,25,73,5 80/- MADE BY THE AO UNDER SECTION 10B OF THE INCOME-TAX ACT, 1961 (A CT). 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS ENGAGED IN THE BUSINESS OF COMPUTER AIDED DESIGN SERVICES. IT CLAIMED RELIEF U/S 10B OF THE ACT AMOUNTING TO RS. 1,25,73,581/- THE A SSESSING OFFICER OBSERVED THAT THE BENEFIT U/S 10B OF THE ACT WAS NO T AVAILABLE TO THE ASSESSEE INASMUCH AS THE BASIC CONDITION OF OBTAINI NG CERTIFICATE FROM APPROPRIATE COMPETENT AUTHORITY, BEING THE BOARD A PPOINTED BY THE CENTRAL GOVERNMENT, WAS NOT FULFILLED SINCE THE ASS ESSEE HAD SOUGHT PERMISSION ONLY FROM SOFTWARE TECHNOLOGY PARK OF IN DIA (STPI). ON BEING CALLED UPON TO EXPLAIN ITS CASE, THE ASSESSE E SUBMITTED THAT IT OBTAINED REGISTRATION AT 100% EXPORT ORIENTED UNDER TAKING FROM THE STPI. RELYING ON THE ORDER PASSED BY THE HYDERABAD BENCH OF THE TRIBUNAL IN INFO TECH ENTERPRISES LTD. VS JCIT 85 I TD 325, THE ASSESSING OFFICER DISALLOWED SUCH CLAIM U/S 10B OF THE ACT AMOUNTING TO RS. 1.25 CRORE. THE ASSESSEE CONTENDED BEFORE TH E LD. CIT(A) THAT THE BENEFIT U/S 10B COULD NOT HAVE BEEN DENIED AS IT HA D SATISFIED ALL THE NECESSARY CONDITIONS. IN ALTERNATIVE IT WAS CLAIMED THAT THE BENEFIT OF DEDUCTION U/S 10A BE ALLOWED. THE LD. CIT(A) UPHELD THE ASSESSEES CONTENTION AS REGARDS THE AVAILABILITY OF BENEFIT U /S 10B AND THUS TREATED ITA NO. 4787/DEL/2011, CO NO. 405/DEL/2011 & ITA NO. 2 794/DEL/2013 HBA INTERNATIONAL IN DIA PVT. LTD. 3 THE ALTERNATIVE GROUND AS INFRUCTUOUS. THE REVENUE IS IN APPEAL AGAINST THE GRANTING OF BENEFIT U/S 10B. THE ASSESSEES CRO SS OBJECTION IS AGAINST THE CONSIDERATION OF ITS CLAIM U/S 10A. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. AT THE OUTSET, THE LD. AR VERY FAIRLY SUBMITTED THAT THE BENEFIT U/S 10B IS NO MORE AVAILABLE TO THE ASS ESSEE IN VIEW OF THE LATER JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS REGENCY CREATIONS LTD. (2013) 353 ITR 326 (DELHI) . IT WAS, HOWEVER, CLAIMED THAT THE ALTERNATIVE PRAYER OF THE ASSESSEE MADE BEFORE THE LD. CIT(A) FOR THE GRANT OF BENEFIT U/S 10A SHOULD BE C ONSIDERED. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE JUDGMENT OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS VALLIANT COMMUNICATION LTD. , A COPY OF WHICH HAS BEEN PROVIDED ON PAGES 19 ONWARDS OF THE PAPER BOOK. IN VIEW OF THE ACCEPTANCE BY THE LD. AR THAT THE QUEST ION OF GRANTING OF RELIEF U/S 10B HAS TO BE DECIDED AGAINST THE ASSESS EE AS PER THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF REGENCY CREATION LTD. (SUPRA) , WE OVERTURN THE IMPUGNED ORDER ON THIS ISSUE AND RESTORE THE VIEW TAKEN BY THE ASSESSING OFFICER. AS A NATUR AL CONSEQUENCE AND IN CONFORMITY WITH THE JUDGMENT IN THE CASE OF VALLIANT COMMUNICATION LTD. (SUPRA), THE MATTER IS SENT BACK TO THE A.O FOR EXAMINATION OF THE ASSESSEES CLAIM AS PER SECTION 10A OF THE ACT. ITA NO. 4787/DEL/2011, CO NO. 405/DEL/2011 & ITA NO. 2 794/DEL/2013 HBA INTERNATIONAL IN DIA PVT. LTD. 4 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED AND THE CROSS OBJECTION OF THE ASSESSEE IS ALLOWED FOR STATISTICA L PURPOSES. ASSESSMENT YEAR 2009-10 6. THE ONLY ISSUE RAISED BY THE REVENUE IN THIS APP EAL IS AGAINST THE GRANTING OF RELIEF U/S 10A BY THE LD. CIT(A). THE F ACTS AND CIRCUMSTANCES OF THIS APPEAL ARE ALMOST SIMILAR TO THOSE FOR THE ASSESSMENT YEAR 2008- 09 EXCEPT FOR THE FACT THAT THE LD. CIT(A) ALSO NEG ATIVED THE ASSESSEES CLAIM FOR THE GRANT OF RELIEF U/S 10B WHICH WAS NOT ALLOWED BY THE ASSESSING OFFICER. HE, HOWEVER, EXAMINED THE CLAIM OF THE ASSESSEE U/S 10A AND BY ACCEPTING IT IN PRINCIPLE, REMITTED THE MATTER TO THE FILE OF THE A.O FOR VERIFICATION OF THE AMOUNT OF FOREIGN EXCHA NGE REALIZED BY THE ASSESSEE WITHIN THE PRESCRIBED PERIOD OF TIME. THE REVENUE IS AGGRIEVED AGAINST SUCH FINDING OF THE LD. FIRST APPELLATE AUT HORITY. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, WE AGREE WITH THE VIEW CANVASSE D BY THE LD. CIT(A) INSOFAR AS THE QUESTION OF NON-AVAILABILITY OF BENE FIT U/S 10B IS CONCERNED. IT IS NOTICED THAT THE LD. CIT(A) GRANTE D RELIEF U/S 10A IN PRINCIPLE CONTRARY TO ITS SPECIFIC DENIAL BY THE AO . AS THE QUESTION OF FULFILLMENT OF THE NECESSARY CONDITIONS FOR THE AVA ILING OF BENEFIT U/S 10A HAS NOT BEEN EXAMINED AND FURTHER WE HAVE RESTORED SIMILAR ISSUE FOR THE IMMEDIATELY PRECEDING YEAR TO THE AO, THE ENDS OF J USTICE WOULD MEET ADEQUATELY IF THE IMPUGNED ORDER ON THIS SCORE IS S ET ASIDE AND THE ITA NO. 4787/DEL/2011, CO NO. 405/DEL/2011 & ITA NO. 2 794/DEL/2013 HBA INTERNATIONAL IN DIA PVT. LTD. 5 MATTER IS SENT BACK TO THE AO FOR DECIDING IT AFRES H AS PER LAW AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE LIMITED REMAND RESTRICTED TO THE VERIFICATION TO TH E AMOUNT OF FOREIGN EXCHANGE REALIZED WITHIN THE PRESCRIBED PERIOD OF T IME IS HEREBY MADE COMPLETE FOR A FRESH EXAMINATION OF THE CLAIM U/S 10A IN ENTIRETY BY THE A.O. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25/03/2014. SD/- SD/- (RAJPAL YADAV) (R. S. SY AL) JUDICIAL MEMBER ACCOUNT ANT MEMBER DATED: 25/03/2014 *SUBODH* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT ASSISTANT REGISTRAR