Hyderabad Information Technology Venture Enterprises Ltd., Hyderabad V. ITO, Hyderabad

ITA 1104/HYD/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3146 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-05-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 09-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: E S NAGENDRA PRASAD
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Additional evidence; Non-deduction of tax; Revised return; Revenue expenditure
• Section: 115JB; 143(2); 148; 10

Judgement Text

ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMBER ITA NO.1104/HYD/08 : A STT. YEAR: 2001-02 HYDERABAD INFORMATION TECHNOLOGY VENTURE ENTERPRISES LIMITED, HYDERABAD. PAN: AAACH9356 F VS ITO, WARD-2(2), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SRI V. SIVA KUMAR RESPONDENT BY : SRI E.S. NAGENDRA PRASAD O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT (A)-III, HYDERABAD DATED 26-3- 2008 PERTA INING TO THE ASSESSMENT YEAR 2001-02. 2. GROUNDS RAISED BY THE ASSESSEE READ AS FOLLOWS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER PASSED BY THE LEARNED CIT (A)-III, HYDERABAD IS CONT RARY TO LAW AND FACTS. 2. THE LEARNED CIT (A) ERRED IN DISALLOWING THE CL AIM OF EXPENDITURE OF RS.11,45,682. ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 2 3. THE LEARNED CIT(A) ERRED IN DISALLOWING THE CLAI M OF EXPENDITURE OF RS.11,45,682 EVEN AFTER THE EXPENDITURE HAS BEEN REPORTED AS GENUINE BY THE ASSESSING OFFICER IN THE REPORT O BTAINED BY THE CIT(A) AS PER RULE 46A(3) OF I T RULES, 1962. 4. THE LEARNED CIT (A) ERRED IN HOLDING, RELYING O N THE DECISION OF THE HON'BLE SUPREME COURT IN SUN ENGINEERING LTD (19 8 ITR 297) THAT THE ASSESSEE WAS SEEKING TO CONVERT THE A SSESSMENT PROCEEDINGS IN ITS CASE INTO AN APPEAL OR REVISION IN DISGUISE TO CLAIM RELIEF IN RESPECT OF ITEMS NOT CLAIMED IN ORI GINAL ASSESSMENT PROCEEDINGS AS THE ASSESSEE DID NOT HAVE ANY OCCASION TO CLAIM ANY DEDUCTION IN ORIGINAL ASSESSM ENT PROCEEDINGS BECAUSE IT HAD CLAIMED EXEMPTION U/S 10 (23FB). 5. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE CLA IM OF DEDUCTION FOR THE IMPUGNED EXPENDITURE WAS NOT MADE IN THE RE TURN FILED IN RESPONSE TO THE NOTICE U/S 148 BUT BY WAY OF REV ISED RETURN FILED ON 10-10-2006 WHEREAS THE ASSESSEE HAS MADE O NLY ONE RETURN IN RESPONSE TO THE NOTICE U/S 148 ON 10-10-2 006 DECLARING NET INCOME OF RS.1,95,280 AFTER CLAIMING DEDUCTION OF RS.28,31,545 OUT OF ITS GROSS INCOME AND IN THE LIG HT OF THE ABOVE FACT, THE LEARNED CIT(A) ERRED IN HOLDING THA T THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE ( INDIA) LTD (284 ITR 323 ) IS APPLICABLE TO THE FACTS OF THE AS SESSEE'S CASE. 6. EVEN OTHERWISE, THE LEARNED CIT (A) OUGHT TO HAV E HELD THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD (284 ITR 323) IS NOT APPLICABLE TO THE FACTS OF THE ASSESSEE'S CASE BECAUSE THE CLAIM FOR DEDUCTION HAS BEEN MADE BY THE ASSESSEE DURING THE PENDANCY OF ASSESSMENT P ROCEEDINGS UNLIKE THE CLAIM MADE BY WAY OF A LETTER IN THE CAS E BEFORE THE HON'BLE SUPREME COURT. 7. THE LEARNED CIT (A) OUGHT TO HAVE ALLOWED THE CL AIM OF DEDUCTION OF EXPENDITURE OF RS.11,45,682.' ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 3 3. BRIEF FACTS OF THE CASE ARE THAT THE BUSINESS O F THE ASSESSEE COMPANY IS INNOVATION AND DEVELOPMENT INCLUDING APP LICATION AND COMMERCIALIZATION OF INFORMATION TECHNOLOGY ESPECIA LLY IN THE STATE OF ANDHRA PRADESH. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ADMITTING TOTA L INCOME OF RS. NIL BY CLAIMING EXEMPTION UNDER S.10(23FB) OF THE ACT, ON THE GROUND THAT IT WAS A VENTURE CAPITAL COMPANY. HOWEVER, DURING THE ASSESS MENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2002-03, THE CLAIM OF THE ASSES SEE REGARDING EXEMPTION UNDER S.10 [23FB] WAS DISALLOWED ON THE G ROUND THAT IT WAS NOT ENTITLED FOR SUCH EXEMPTION. SIMILARLY, THE ASSESSI NG OFFICER HELD THAT THE ASSESSEE IS NOT ENTITLED TO GET THE EXEMPTION FOR T HE ASSESSMENT YEAR 2001- 02. THEREFORE, NOTICE UNDER SECTION 148 WAS ISSUED BY THE THEN JURISDICTIONAL ASSESSING OFFICER ON 5-5-2005 TO DISALLOW THE EXEMP TION OF RS.23,12,918/- CLAIMED BY THE ASSESSEE AND IT WAS SERVED ON THE AS SESSEE ON THE SAME DAY. LATER, THE CASE WAS TRANSFERRED TO THE ASSESSING OF FICER, WARD -2(2), OWING TO CHANGE OF JURISDICTION AND THE ASSESSEE COMPANY FIL ED A LETTER ON 10-10-2006 ENCLOSING A REVISED RETURN OF INCOME REVISING THE P ROFIT AND LOSS ACCOUNT MENTIONING THAT THE COMPANY HAD COMMENCED ITS OPERA TIONS FROM 1-3-2001, IN RESPONSE TO THE NOTICE UNDER SECTION 148 OF THE ACT AND THEREAFTER NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE. A FTER ELABORATELY DISCUSSING THE ISSUES IN HIS ORDER, THE ASSESSING O FFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE, STATING THAT THE STATUT ORY AUDITED ACCOUNTS CANNOT BE ALTERED BY THE COMPANY. ACCORDINGLY, THE ASSESSING OFFICER ADOPTED THE INCOME OF THE ASSESSEE COMPANY AT RS.28 ,33,236/- AND COMPLETED THE ASSESSMENT ACCORDINGLY. AGGRIEVED AGA INST THE DECISION OF THE ASSESSING OFFICER, THE ASSESSEE WENT IN APPEAL BEFO RE THE CIT (A). ON APPEAL THE CIT(A) HELD THAT THE ASSESSEE HAS NOT RAISED A LEGAL GROUND BUT MADE FRESH CLAIM OF EXPENDITURE WHICH INVOLVES FACTUAL A SPECTS AND IN SUCH A SITUATION, HE DID NOT ANY JUSTIFICATION FOR ENTERTA INING THE FACTUAL CLAIM MADE BY THE ASSESSEE REGARDING THE EXPENDITURE WHICH WAS NOT CLAIMED IN THE ORIGINAL RETURN OF INCOME FILED BY IT. HENCE, THE G ROUNDS TAKEN BY THE ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 4 ASSESSEE ARE DISMISSED BY THE CIT (A). AGGRIEVED A GAINST THE FINDINGS AND THE DECISION OF THE CIT (A), THE ASSESSEE IS IN APP EAL BEFORE US. 4. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE ASSESSEE COMPANY WAS UNDER THE BONAFIDE IMPRESSION THAT ITS INCOME WAS EXEMPT UNDER THE INCOME TAX PROVISION. IT ACCORDINGLY FIL ED RETURN OF INCOME ON 31- 10-2001 CLAIMING EXEMPTION IN RESPECT OF ITS INCOME AND DECLARED NIL INCOME. SINCE THERE WAS NEITHER TAX PAYABLE NOR R EFUNDABLE, NO ACTION WAS TAKEN ON THE RETURN FILED, AS IT WAS KNOWN TO THE A SSESSEE. IN FURTHERANCE OF THE BONA FIDE BELIEF, THE ASSESSEE SOUGHT A CERTIFI CATE UNDER SECTION 197 OF THE ACT SEEKING NON-DEDUCTION OF TAX AT SOURCE IN I TS CASE. SIMILARLY, THE ASSESSEE FILED NIL RETURN FOR THE ASSESSMENT YEAR 2 002-03 ALSO AND THIS ASSESSMENT WAS TAKEN UP FOR SCRUTINY AND THE ASSESS EE'S CLAIM FOR EXEMPTION WAS NOT ALLOWED BY THE ASSESSING OFFICER. THE ASSES SMENT WAS CONFIRMED IN FIRST APPEAL. THE ASSESSEE DID NOT CONTEST THE DEC ISION OF THE CIT (A). IT WAS FURTHER CONTENDED THAT THE ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE THERETO THE ASSESSEE FILED RETURN OF INCOME ON 10-10- 2006 DECLARING TOTAL INCOME OF RS.1,95,280 UNDER NO RMAL PROVISIONS AND THE ASSESSEE COMPUTED TAX ON BOOK PROFITS AND PAID TAX OF RS.3,30,889 INCLUSIVE OF INTEREST. IT IS SUBMITTED THAT THE ASSESSEE IS A DEEMED GOVERNMENT COMPANY FALLING UNDER THE PURVIEW OF SECTION 619(B) OF THE COMPANIES ACT, 1956. AS SUCH, THE STATUTORY AUDITORS HAVE TO BE A PPOINTED BY THE C & A.G OF INDIA AND THE APPOINTMENT OF THE AUDITORS FOR TH E YEARS 1998-2001 WAS MADE IN THE YEAR 2003. THE AUDIT REPORT FOR THE AS SESSMENT YEAR 2001-02 WAS RECEIVED IN THE YEAR 2005. IN THE NOTES ON ACC OUNTS APPENDED AS SCHEDULE-5 TO THE AUDITED ACCOUNTS, THE STATUTORY A UDITORS MADE A COMMENT THAT THE COMPANY COMMENCED ITS OPERATIONS WITH EFFE CT FROM 1ST MARCH, 2001 AND IT WAS COMMENTED THAT THE PROFIT AND LOSS RELATE TO THE PERIOD 1-3- 2001 TO 31-3-2001. ACCORDINGLY, EXPENDITURE INCURR ED UP TO 28-2-2001 WAS TREATED BY THEM AS PRE-OPERATIVE EXPENDITURE. HOWEV ER WHILE FILING RETURN OF INCOME, THE ASSESSEE CLAIMED DEDUCTION FOR REVENUE EXPENDITURE INCURRED FROM THE INCEPTION AND THUS ARRIVED AT A PROFIT OF RS.1,95,280. DURING THE ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 5 COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COMP ANY PLEADED FOR BEFORE THE ASSESSING OFFICER THAT THE EXPENDITURE PERTAINI NG TO THE ENTIRE 12 MONTH PERIOD SHOULD BE ALLOWED SINCE INCOME FOR THE ENTIR E YEAR HAS BEEN TAKEN INTO ACCOUNT IN THE PROFIT AND LOSS ACCOUNT. THE ASSESS ING OFFICER HOWEVER COMPUTED INCOME ON THE BASIS OF THE UNAUDITED PROFI T AND LOSS ACCOUNT, THE SAME WAS SUBMITTED AT PAGE 27 OF THE PAPER BOOK-II, DISALLOWED A SUM OF RS.5,20,318 BEING 1/5TH OF THE MISCELLANEOUS EXPEND ITURE PERTAINING TO EARLIER FINANCIAL YEARS. HE TOOK THE VIEW THAT THE FINAL ACCOUNTS I.E., PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AUDITED BY THE S TATUTORY AUDITOR CANNOT BE CHANGED, THOUGH HE ADOPTED THE PROFIT AS PER UNA UDITED ACCOUNTS. THE ASSESSEE'S PLEA FOR ALLOWANCE OF THE EXPENDITURE RE LATING TO THE ENTIRE 12 MONTH PERIOD COMPRISED IN THE FINANCIAL YEAR WAS RE JECTED BY THE ASSESSING OFFICER EVEN WHILE CONSIDERING PROFIT FOR PURPOSES OF SECTION 115JB AS CAN BE SEEN FROM THE SPECIFIC MENTION MADE BY THE ASSESSIN G OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE ASSESSEE FILED ADDITIONAL EVIDENCE IN THE FORM OF VOUCHERS, BILLS RECEIPTS, COPIES OF MINUTES AND RESOLUTIONS OF THE BOARD OF DIRECTORS ETC., TO SHOW THAT THE BUSINESS OF THE ASSESSEE COMMENCED EVEN BEFORE 1-4-2000. THE CIT (A) ADMIT TED THE ADDITIONAL EVIDENCE AND FORWARDED THE SAME TO THE ASSESSING OF FICER FOR HIS EXAMINATION AND REPORT AS REQUIRED UNDER RULE 46A. THE ASSESSI NG OFFICER FURNISHED A REPORT WHICH IS SUBMITTED AT PAGE 16 OF THE PAPER B OOK-I. THE ASSESSING OFFICER HAS CATEGORICALLY STATED IN HIS REPORT THAT THE EXPENDITURE INCURRED BY THE ASSESSEE DURING THE ENTIRE YEAR WAS IN RELATION TO THE BUSINESS OF THE ASSESSEE THAT IT APPEARED TO BE GENUINE. THE REPOR T OF THE ASSESSING OFFICER WAS FORWARDED TO THE ASSESSEE FOR ITS COMMENTS. AT THIS STAGE, THE CIT(A) REFERRING TO THE DECISION OF THE SUPREME COURT IN T HE CASE OF GOETZE (INDIA) LTD (284 ITR 323) RELYING CALLED UPON THE ASSESSEE AS TO WHY THE CLAIM FOR DEDUCTION OF EXPENDITURE SHOULD NOT BE DISALLOWED B ECAUSE THE CLAIM WAS MADE DURING ASSESSMENT PROCEEDINGS AND IT WAS NOT S UPPORTED BY A REVISED RETURN. IN THIS CONNECTION HE STATED THAT THE RETU RN FILED BY THE ASSESSEE ON 10-10-2006 WAS A REVISED RETURN AND THAT THE ASSESS EE HAD NO RIGHT TO REVISE ITS RETURN UNDER SECTION 148 OF THE I T ACT. THE CI T (A) HAVING ADMITTED ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 6 ADDITIONAL EVIDENCE AND GOT THE SAME VETTED BY THE ASSESSING OFFICER AND HAVING FOUND THE IMPUGNED EXPENDITURE TO BE GENUINE , IT NOT CORRECT IN REFUSING TO ALLOW THE EXPENDITURE ON A TECHNICAL PL EA. IT WAS FURTHER CONTENDED THAT THE ASSESSEE IS A DEEMED GOVERNMENT COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001-02 DE CLARING NIL INCOME ON THE GROUND THAT ITS INCOME IS EXEMPT UNDER SECTION 10(23FB) OF THE ACT. THE LEARNED CIT (A) MISTOOK THAT THE RETURN FILED BY TH E ASSESSEE ON 10-10-2006 WAS A REVISED RETURN. IN THIS CONNECTION, HE INVIT ED THE ATTENTION OF THE BENCH TO THE LETTER DATED 27-9-2006 ISSUED BY THE A SSESSING OFFICER WHICH SHOWS THAT TILL THAT DATE THE ASSESSEE DID NOT FILE ANY RETURN IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. HE RELIED ON SE VERAL CASE LAWS IN SUPPORT OF HIS CONTENTIONS AND COPIES OF THE SAME ARE PLACE D ALONG WITH THE WRITTEN SUBMISSIONS FILED BY HIM. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE WHILE SUPPORTING THE ORDER OF THE CIT (A) SUBMITTED THAT REVISED RETURN FILED BY THE ASSESSEE HAS NO VALIDITY IN THE EYES OF LAW, SINCE THERE IS NO PROVISION FOR FILING A REVISED RETURN IN THE PROCEEDINGS UNDER S. 148 OF THE ACT BY THE ASSESSEE. THE ASSESSING OFFICER HAS NO POWER TO ENT ERTAIN A CLAIM OF DEDUCTION MADE DURING ASSESSMENT PROCEEDINGS WITHOU T REVISING THE RETURN. ASSESSEE CAN NOT MAKE A NEW CLAIM DURING THE RE-ASS ESSMENT PROCEEDINGS AS RE-ASSESSMENT PROCEEDINGS ARE ONLY FOR THE BENEFIT OF THE DEPARTMENT AND NOT FOR THE ASSESSEE. THE ASSESSEE CANNOT BE PERMIT TED TO CONVERT THE RE- ASSESSMENT PROCEEDINGS INTO AN APPEAL OR REVISION I N DISGUISE AND SEEK RELIEF IN RESPECT OF ITEMS NOT CLAIMED IN THE ORIGINAL ASS ESSMENT PROCEEDINGS. THE CLAIM OF EXPENDITURE MADE BY THE ASSESSEE IN THE RE -ASSESSMENT PROCEEDINGS CANNOT BE ENTERTAINED. HENCE, THE LOWER AUTHORITIE S ARE RIGHT IN DISALLOWING THE CLAIM OF THE EXPENDITURE OF RS.11,45,682/- TO S UPPORT HIS CONTENTIONS, HE RELIED ON THE FOLLOWING DECISIONS: I] K. SUDHAKAR S. SHANBHAG VS. ITO (241 ITR 864) II] CIT VS. KESHORAM INDUSTRIES LTD. (271 ITR 352) ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 7 III] VIDEOCON LEASING AND IND. FIN. LTD. VS. JCIT ( 290 ITR (AT) 323 (AHMEDABAD) IV] CIT VS. SUN ENGINEERING (198 ITR 297) (SC) 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS UNDISPUTED FACT THAT THE EXPENDITURE INCURRED BY THE ASSESSEE COMPANY DURING THE ENTIRE YEAR WAS IN RELATION TO THE BUSINESS OF THE ASSESSEE COMPANY AND IT WAS HEL D AS GENUINE AS PER THE REMAND REPORT OF THE ASSESSING OFFICER. WE FIND THA T THE ASSESSEE FILED ADDITIONAL EVIDENCE BEFORE THE CIT [A] AND THE CIT [A] ADMITTED THE ADDITIONAL EVIDENCE AND GOT THE VETTING BY THE ASSE SSING OFFICER THAT THE IMPUGNED EXPENDITURE TO BE GENUINE. HENCE, IN OUR CO NSIDERED OPINION, IT IS NOT CORRECT ON THE PART OF THE DEPARTMENT IN REFUSI NG TO ALLOW THE EXPENDITURE ON A TECHNICAL PLEA. WE FIND THAT THE CLAIM OF DEDU CTION WAS COMPRISED IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER S.148 OF T HE ACT AND THERE WAS NO ADJUDICATION BY THE DEPARTMENT ON THE CLAIM OF THE ASSESSEE COMPANY FOR DEDUCTION OF EXPENDITURE OF RS.11,45,682/- EARLIER TO THE PROCEEDINGS UNDER S.148 OF THE ACT. THE SAID EXPENDITURE IS CLAIMED B Y THE ASSESSEE COMPANY IN THE SCRUTINY ASSESSMENT PROCEEDINGS RELATES PURE LY TO THE INCOME THAT HAS BEEN ESCAPED ASSESSMENT. THE LETTER ISSUED BY THE ASSESSING OFFICER TO THE ASSESSEE ON 27-9-2006 WHICH IS PLACED IN PAPER BOOK AT PAGE NO.25 OF THE PAPER BOOK SHOWS THAT TILL THE DATE OF THE SAID LET TER, THE ASSESSEE COMPANY DID NOT FILE ANY RETURN IN RESPONSE TO NOTICE UNDER S.148 OF THE ACT AND THE SAME IS CONFIRMED IN PARA 5.1 OF THE CIT [A]'S ORDE R. WE DO NOT SEE ANY MERIT IN THE CONTENTION OF THE DEPARTMENT THAT THE ASSESSEE COMPANY WAS SEEKING TO CONVERT THE RE-ASSESSMENT PROCEEDINGS IN ITS CASE INTO AN APPEAL OR REVISION IN DISGUISE TO CLAIM THE RELIEF IN RESP ECT OF ITEMS NOT CLAIMED IN THE ORIGINAL ASSESSMENT PROCEEDINGS AS THE ASSESSEE COMPANY DID NOT HAVE ANY OCCASION TO CLAIM ANY DEDUCTION IN THE ORIGINAL ASSESSMENT PROCEEDINGS BECAUSE IT HAD CLAIMED EXEMPTION UNDER S.10 [23 FB] OF THE ACT. HENCE, IN OUR VIEW, THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF SUN ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 8 ENGINEERING (SUPRA) AND OTHER CASES RELIED UPON BY THE DEPARTMENT IS NOT APPLICABLE TO THE CASE UNDER CONSIDERATION. WE AGR EE THAT IT IS NOT POSSIBLE FOR AN ASSESSEE TO CLAIM RELIEF WHICH THE ASSESSEE OMITTED TO CLAIM IN THE RETURN OF INCOME OR REVISED RETURN OF INCOME FILED IN TIME. THIS IS WHAT WAS DECIDED IN GOETZE INDIA (SUPRA). HOWEVER, THE AFORE SAID DECISION MAY NOT BE UNDERSTOOD AS CURTAILING THE POWERS OF THE ASSESSIN G OFFICER IN SCRUTINY ASSESSMENTS DURING WHICH THE ASSESSEE COMPANY HAD M ADE A SPECIFIC CLAIM ON THE BASIS OF THE EXPENDITURE INCURRED BY THE ASS ESSEE COMPANY, FOR WHICH GENUINENESS WAS NOT DOUBTED BY THE DEPARTMENT. IN V IEW OF OUR FINDINGS ABOVE AND AFTER CONSIDERING THE TOTALITY OF THE FAC TS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ASSESSEE IS RIGHT IN CLAIMIN G THE EXPENDITURE OF RS.11,45,682/- AND WE DIRECT ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER WAS PRONOUNCED IN THE COURT ON 30-6-2010. SD/- G.C.GUPTA SD/- AKBER BASHA VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 30TH JUNE, 2010 COPY FORWARDED TO: 1. C/O M. BHASKARA RAO & CO., CAS, 6-3-652, 5D, 5T H FLOOR, 'KAUTILYA', SOMAJIGUDA, HYDERABAD. 2 ITO, WARD-2(2), HYDERABAD. 3. 4. THE CIT, AP, HYDERABAD., CIT(A)-III, HYDERABAD. DR, ITAT, HYDERABAD. JMR * ITA 1104/HYD/08 HYDERABAD INFORMATION TECHNOLOGY, HYD. 9