ACIT, Bangalore V. M/s L & T Vadel Engineering Limited, Bangalore

ITA 1186/BANG/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63687 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 01-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ETWA MUNDA CITIII
• Assessee Lawyers: V CHANDRASHEKAR
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI N. BARAT H VAJA SANKAR, VICE - PRESIDENT A ND SHRI N.V.VASUDEVAN , JUDICIAL MEMBER ITA NO.1186/BANG/2011 (ASSESSMENT YEAR: 2007-08) ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 11(5), BANGALORE. APPELLANT VS. M/S. L & T VADEL ENGINEERING LTD., NO.19, SHRUTHA COMPLEX, PRIMROSE ROAD, BANGALORE-25. RESPONDENT PAN: AABCL 0552G A PPELLANT BY: SHR I ETWA MUNDA, CIT - III. RESPONDENT BY : SHRI V.CHANDRASHEKAR, ADVOCA TE. DATE OF HEARING: 13 - 09 - 2011. DATE OF PRONOUNCEMENT: 13 - 09 - 2011 . O R D E R PER N. BARATHVAJA SANKAR, VP: THIS IS AN APPEAL PREFERRED BY THE REVENUE IN THE CASE OF M/S. L & T VADEL ENGINEERING LTD., BANGALORE, FOR T HE ASSESSMENT YEAR 2007-08 AGAINST THE APPELLATE ORDER DATED 16-9 -2011 OF THE CIT(A)-I, BANGALORE. 2. THE REVENUE IS ON APPEAL WITH THE GROUND THAT T HE CIT(A) WAS NOT JUSTIFIED IN HOLDING THAT THE ASSESSEE IS E LIGIBLE FOR ITA NO.1186/BANG/2011 PAGE 2 OF 3 DEDUCTION U/S 10A OF THE ACT AND ALLOWING RELIEF TO THE ASSESSEE. ONE OF THE GROUNDS VIZ., GROUND NO.4 TAKEN BY THE R EVENUE READS AS UNDER: THE LEARNED CIT(A) ERRED IN ALLOWING THE RELIEF, R ELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF DEME RGED COMPANY FOR EARLIER YEARS, WHICH HAS NOT BEEN ACCEP TED BY THE DEPARTMENT AND APPEALS HAVE BEEN FILED BEFOR E THE HIGH COURT U/S 260A OF THE IT ACT, 1961 AGAINST SUCH ORDERS. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND CONSIDERED THE FACTS AND MATERIAL ON RECORD. IN THIS CASE, THE CIT(A) H AS FOLLOWED EARLIER ORDER IN THE CASE OF DEMERGED COMPANY AND A LLOWED THE CLAIM OF THE ASSESSEE. THE CIT(A) HAS OBSERVED THA T IN THE SAID ORDER, THE TRIBUNAL HAS OBSERVED AS UNDER: AFTER HEARING BOTH SIDES AND GOING THROUGH THE DET AILS ORDERS PASSED BY THE LOWER AUTHORITIES, WE ARE OF T HE CONSIDERED VIEW THAT THE FINDINGS ARRIVED AT BY THE CIT(A) ARE RIGHTFUL, JUST AND PROPER. THE CIRCULAR NO.694 DATED 22-11-1994 ISSUED BY THE CBDT IN THE CONTEXT OF SEC TION 10A HAS CLARIFIED THAT DEVELOPMENT OF PROGRAMME ON SITE IS COVERED BY THE EXEMPTION SCHEME PROPOUNDED BY TH E CENTRAL GOVERNMENT. THE ASSESSEE WAS ENGAGED ON-SI TE DEVELOPMENT OF SOFTWARE PROGRAMME. THE PROGRAMMES A RE DELIVERED AT THE CLIENTS PREMISES AT WORK SITE IN S OUTH KOREA. THERE IS NO DOUBT THAT THE ACTIVITIES CARRIE D OUT BY THE ASSESSEE ARE FALLING UNDER THE PURVIEW OF SECTI ON 10A AS SPECIFIED BY THE EXPLANATION PROVIDED UNDER THE SAID SECTION 10A AND FURTHER CLARIFIED BY THE CIRCULAR N O.694 DATED 22-11-1994. THE CIT(A) HAS EXAMINED THE QUES TION OF SPLITTING UP OF AN EXISTING BUSINESS AS ALLEGED BY THE REVENUE. AS RIGHTLY POINTED OUT BY HIM, AS THE ACTI VITIES WERE FINALLY CULMINATED AT THE WORK SITE OF THE CLI ENTS IN SOUTH KOREA, THERE WAS NO NEED FOR FULL FLEDGED INFRASTRUCTURAL FACILITIES IN INDIA. SUCH FACILITY IS NOT CALLED FOR IN THE LINE OF BUSINESS CARRIED ON BY THE ASSES SEE. THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CA SE, WE FIND THE ASSESSEE IS ENTITLED FOR CLAIMING DEDUCTIO N U/S 10A. THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSE E. THE GROUND RAISED BY THE REVENUE ON THIS POINT IS DISMI SSED. ITA NO.1186/BANG/2011 PAGE 3 OF 3 THE REVENUE, THOUGH HAS TAKEN THE GROUND THAT AN AP PEAL HAS BEEN FILED AGAINST THE ORDER OF THE TRIBUNAL TO THE HONBLE HIGH COURT U/S 260A OF THE ACT, NOTHING HAS BEEN BROUGHT ON RECORD BEFORE US TO SHOW THAT THE HONBLE HIGH COURT HAS R EVERSED THE ORDER OF THE TRIBUNAL. IN SUCH FACTS AND CIRCUMSTA NCES, THE EARLIER DECISION OF THE TRIBUNAL IN THE CASE OF DEMERGED CO MPANY IS HOLDING THE FIELD. HENCE, FOLLOWING THE EARLIER OR DER OF THIS TRIBUNAL, WE DISMISS THE REVENUES APPEAL. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH SEPTEMBER, 2012 . SD/- SD/- (N.V.VASUDEVAN ) JUDICIAL MEMBER (N.BARATHVAJA SANKAR) VICE-PRESIDENT EKS COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBU NAL, BANGALORE