The Dy. CIT., Circle-6, Ahmedabad V. Shri Himanshu V.Shah, Ahmedabad

ITA 1222/AHD/2014

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8930 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 15-03-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 24-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO. 1222/AHD/2014 (ASSESSMENT YEAR:2010-11) DCIT, CIRCLE-6, AHMEDABAD APPELL ANT VS. SHRI HIMANSHU V. SHAH PROP. M/S. ARVIND TELE SYSTEM AND M/S. ARVIND TRAVLES C-1, 1 ST FLOOR, SURYA COMPLEX, OPP. NAVNEET HOUSE, GURUKUL ROAD, AHMEDABAD RESP ONDENT PAN: ACZPS3768E /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /BY ASSESSEE : SHRI S. N. SOPARKAR, A.R. /DATE OF HEARING : 15.03.2017 /DATE OF PRONOUNCEMENT : 17.03.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2010-11 A RISES AGAINST THE CIT(A)-XVI, AHMEDABADS ORDER DATED 28.02.2014 PASS ED IN APPEAL NO. CIT(A)-XVI/ADDL.CIT/R-6/215/12-13, DELETING SECTION 80IB DEDUCTION ITA NO. 1222/AHD/2014 (DCIT VS. SHRI HIMANSHU V. SH AH) A.Y. 2010-11 - 2 - DISALLOWANCE OF RS. 41,52,202/- AS MADE BY THE ASSE SSING OFFICER IN ASSESSMENT ORDER DATED 31.12.2012, IN PROCEEDINGS U /S.143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH PARTIES. CASE FILE PERUSED. 2. RELEVANT FACTS ARE IN A VERY NARROW COMPASS. TH E ASSESSEE CLAIMED SECTION 80IB DEDUCTION AMOUNTING TO RS.41,52,202/- ON INCOME EARNED FROM BUSINESS OF M/S. ARVIND TELESYSTEMS. HE CLAIMED TO HAVE CARRIED OUT THE BUSINESS OF PROVIDING BASIC TELECOMMUNICATION SERVI CES. THE ASSESSING OFFICER INTER ALIA QUOTED ASSESSEES FAILURE IN FUR NISHING LICENSE AGREEMENT OF EACH OF ITS UNIT FOR INSTALLING, MAINTAINING AND OP ERATING EPABX SYSTEM IN QUESTION. THE ASSESSING OFFICER WAS OF THE VIEW TH AT THE ASSESSEES ROLE IN PROVIDING THE SAID SERVICES WAS ONLY OF A FRANCHISE OF THE TELECOM OPERATOR IN QUESTION INSTEAD OF HIMSELF BE A PROVIDER OF BAS IC OR CELLULAR TELECOM SERVICES. HE FURTHER DECLINED THE ASSESSEES EXPLA NATION TO HAVE SUCCEEDED ON THE VERY ISSUE BEFORE THE CIT(A) UPTO THE PRECED ING ASSESSMENT YEAR AND BEFORE THIS TRIBUNAL UPTO ASSESSMENT YEAR 2001-02 B Y CONCLUDING THAT THE SAME HAD NOT REACHED FINALITY. ALL THIS RESULTED I N THE IMPUGNED DISALLOWANCE BEING MADE. 3. THE CIT(A) REVERSES ASSESSING OFFICERS FINDINGS AS FOLLOWS: 4.2 I HAVE CAREFULLY CONSIDERED THE' FACTS OF THE CASE IN THE LIGHT OF SUBMISSIONS MADE BY THE APPELLANT, THE ARGUMENTS TAKEN BY THE A SSESSING OFFICER & MATERIAL AVAILABLE ON RECORDS. IT IS THE CASE OF THE APPELLA NT THAT IT HAD PROVIDED TO THE A O ALL THE DOCUMENTS ETC INCLUDING LICENCE AGREEMENT E TC DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT HAS BEEN ARGUED THAT THE LD A O WAS INFORMED VIDE LETTER DT 8-10-2012, THAT ON SIMILAR FACTS THE ADDI TIONS MADE IN APPELLANTS CASE FOR AY 97-98 TO 2001-02 AND 2002-03 TO 2009-10 STAND AL LOWED BY APPELLATE AUTHORITIES BEING HON'BLE JURISDICTIONAL TRIBUNAL A ND CIT(A) FOR DIFFERENT YEARS. THE APPELLANT HAS ARGUED THAT AS THE FACTS OF THE C ASE FOR THE PRESENT YEAR ARE IDENTICAL TO THOSE EXISTING IN EARLIER YEARS AND TH AT IT HAD BEEN ALLOWED DEDUCTION U/S. 80IA BY HON'BLE JURISDICTIONAL TRIBUNAL AND CIT(A) THEREFORE THERE WAS NO CASE FOR ANY ADDITION / DISALLOWANCE. ON CAREFUL CONSIDERATION, IT IS NOTED THAT THE FACTS OF THE CASE OF THE CURRENT YEAR ARE IDENTICAL TO THOSE EXISTING IN EARLIER YEARS. ITA NO. 1222/AHD/2014 (DCIT VS. SHRI HIMANSHU V. SH AH) A.Y. 2010-11 - 3 - WHILE DENYING THE CLAIM U/S. 80IA / 80IB FOR A Y 97 -98 TO 2001-02 AND 2002-03 TO 2009-10, THE ERSTWHILE AOS HAD CONCLUDED THAT THE A PPELLANT BEING MERELY A FRANCHISE OF BSNL WAS NOT ELIGIBLE FOR ALLOWANCE OF DEDUCTION U/S. 8-IA / 80IB. IN APPEAL, HON'BLE JURISDICTIONAL TRIBUNAL AND CIT(A) FOR RESPECTIVE YEARS CONCLUDED THAT THE APPELLANT WAS ELIGIBLE FOR ALLOWANCE OF DE DUCTION U/S. 8-IA / 80IB AND HENCE WAS ALLOWED THE DEDUCTION. ACCEPTED JUDICIAL DISCIPLINE IS THAT THE APPELLATE ORDER OF A SUPERIOR APPELLATE AUTHORITY IS TO BE FO LLOWED EVEN IF THE SAID ORDER IS CHALLENGED BEFORE NEXT SUPERIOR AUTHORITY. THUS SEE N, THE A O IS BOUND TO FOLLOW ORDER OF JURISDICTIONAL TRIBUNAL IN A CASE, ON IDEN TICAL FACTS UNTIL AND UNLESS THE DECISION OF THE HON'BLE TRIBUNAL IS REVERSED BY JUR ISDICTIONAL HIGH COURT. MERELY BECAUSE THE ORDER OF THE TRIBUNAL IS CONTESTED BY D EPARTMENT BEFORE THE JURISDICTIONAL HIGH COURT WOULD NOT EXEMPT THE A O FROM COMPLYING WITH THE SAME. IN THE INSTANT CASE, THE A O HAS NOT BEEN A BLE TO EFFECTIVELY ESTABLISH IN THE ASSESSMENT ORDER WITH ANY COGENT EVIDENCE AS TO HOW THE FACTS OF THE CASE ARE DIFFERENT. AS PER NARRATION MADE IN THE ASSESSMENT ORDER, THE APPELLANT WAS DENIED CLAIM OF DEDUCTION U/S. 80IA / 80IB ON THE PREMISE THAT HE WAS MERELY A FRANCHISE HOLDER OF BSNL / TELECOM DEPARTMENT AND IS NOT A PR OVIDER OF A BASIC OR CELLULAR TELECOM SERVICES AND THAT THEREFORE NOT ELIGIBLE FO R CLAIM OF DEDUCTION. NOW ONCE THE FACTS OF THE CASE OF THE PRESENT APPEAL ARE IDE NTICAL TO THOSE OF EARLIER YEARS, THEN THE DECISION OF HON'BLE TRIBUNAL WAS TO BE FOL LOWED. RECORDS INDICATE THAT MY LD PREDECESSORS BEING CSIT(APPEALS) HAVE ALLOWED RE LIEF TO THE APPELLANT FOR A Y 2002-03 TO 2009-10, DIRECTING THE A O TO ALLOW DEDU CTION U/S. 80IA , BY FOLLOWING THE ORDER OF THE HON'BLE JURISDICTIONAL TRIBUNAL FO R A Y 97-98 TO 2001-02. THERE IS ALSO NO FORCE IN ARGUMENT OF A O REGARDING NON SUBM ISSION OF ALL THE LICENCE AGREEMENTS, FOR EACH OF THE STATIONS, BY THE APPELL ANT. FOR ONE, THE APPELLANT IS ARGUED THAT A COPY THEREOF WAS PROVIDED TO THE A O. WITHOUT PREJUDICE IT IS SEEN THAT THE LD A O IN PARA 2.2 OF THE ASSESSMENT ORDER HIMSELF RECORDS THAT THOUGH THE APPELLANT WAS OPERATING FROM DIFFERENT STATIONS, YE T THE FORMAT OF LICENCE AGREEMENTS EXECUTED BY TELECOM AUTHORITY WAS STANDA RD AND COMMON TO ALL. THIS GOES ON TO INDICATE THAT THERE WAS ACTUALLY NO VALI D REQUIREMENT FOR INSISTENCE BY THE LD A O UPON THE APPELLANT FOR PROVIDING LICENCE AGREEMENT FOR ALL THE STATIONS, SINCE ONE AGREEMENT SERVED FOR ALL. CONSEQUENTLY, I N RESPECTFULLY COMPLIANCE TO THE ORDER OF HON'BLE TRIBUNAL IN APPELLANTS OWN CASE FO R A Y 97-98 TO 2001-02 AND OF MY ID PREDECESSORS IN APPELLANTS OWN CASE FOR A Y 2 002-03 TO 2009-10,, THE A O IS DIRECTED TO ALLOW THE DEDUCTION CLAIMED BY THE APPE LLANT U/S. 80IA / 80IB OF THE ACT. CONSEQUENTLY, THE GROUND OF APPEAL NO. 2. COMPRISIN G SUB GROUNDS 2.1 ,2.2, & 2.3 ARE ALLOWED. 4. WE HAVE HEARD RIVAL SUBMISSIONS. THE SOLE DIS PUTE BETWEEN THE PARTIES IS ABOUT DISALLOWANCE OF SECTION 80IB DEDUC TION CLAIMED ON EPABX TELECOMMUNICATION SERVICES. IT HAS ALREADY COME ON RECORD THAT THE ASSESSEE HAS SUCCEEDED ON THE VERY ISSUE IN EARLIER ASSESSME NT YEAR. THE ASSESSING OFFICER HIMSELF IS FAIR ENOUGH IN NOT DRAWING ANY D ISTINCTION ON FACTS. HE RATHER HOLDS THAT THE REVENUE HAS NOT ACCEPTED THIS TRIBUNALS EARLIER DECISIONS (SUPRA). SHRI SOPARKAR FILES BEFORE US HONBLE JUR ISDICTIONAL HIGH COURTS ITA NO. 1222/AHD/2014 (DCIT VS. SHRI HIMANSHU V. SH AH) A.Y. 2010-11 - 4 - JUDGMENT WRITE UPTO ASSESSMENT YEAR 2007-08 DECIDED ON 16.12.2014 HOLDING THE ASSESSEE HIMSELF ELIGIBLE FOR THE IMPUGNED DEDU CTION IN CASE OF EPABX COMMUNICATION SERVICES. LEARNED DEPARTMENTAL REPRE SENTATIVE FAILS TO DISPUTE ALL THESE LEGAL DEVELOPMENTS. WE THUS CONF IRM CIT(A)S ORDER UNDER CHALLENGE DELETING THE IMPUGNED DISALLOWANCE. 5. THIS REVENUES APPEAL IS ACCORDINGLY DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 17 TH DAY OF MARCH, 2017.] SD/- SD/- ( MANISH BORAD ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 17/03/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0