DCIT, CHENNAI V. Dun & Bradstreet Technologies & Data Services (P) Ltd., CHENNAI

ITA 1258/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8008 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 24-10-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 06-05-2016
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : CHENNAI . . . , . . ' # $ , % &' ( [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D. S. SUNDER SINGH, ACCOUNTANT MEMBER ] ./ I.T.A.NOS.1257 & 1258/MDS/2016 / ASSESSMENT YEARS : 2007-08 & 2010-11 THE DY. COMMISSIONER OF INCOME-TAX CORPORATE CIRCLE 1(1) CHENNAI VS. M/S DUN & BRADSTREET TECHNOLOGIES & DATA SERVICES (P) LTD [FORMERLY KNOWN AS D&B TRANSUNION ANALYTIC AND DECISION SERVICES P. LTD] LEVEL 9, PRINCE INFOCITY PHASE I 286/11 KANDANCHAVADI, RAJIV GANDHI SALAI CHENNAI 600 096 [PAN AACCD 5293 M ] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT /RESPONDENT BY : SHRI S.P.CHIDAMBARAM, ADVOCATE / DATE OF HEARING : 24 - 10 - 2016 ! / DATE OF PRONOUNCEMENT : 25 - 11 - 2016 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER THESE APPEALS OF THE REVENUE IS DIRECTED AGAINST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) -1, CHENNAI, DATED 3.2.2016 FOR ASSESSMENT YEARS 2007-08 AND 201 0-11. SINCE COMMON ISSUE ARISES FOR CONSIDERATION IN BOTH THE A PPEALS, WE DISPOSE ITA NO.1257 & 1258/16 :- 2 -: THE SAME BY THIS COMMON ORDER FOR THE SAKE OF CONVE NIENCE AND BREVITY. 2. ALL THE GROUNDS OF APPEALS ARE RELATING TO THE DISA LLOWANCE MADE U/S 10A OF THE INCOME-TAX ACT, 1961. 3. M/S DUN & BRADSTREET PREDICTIVE SCIENCES & ANALYTIC PRIVATE LTD WAS INCORPORATED ON 23.1.2007 AS A PRIVATE LIMI TED COMPANY IN CHENNAI AND SUBSEQUENTLY NAME OF THE COMPANY CHANGE D TO D&B TRANSUNION ANALYTIC & DECISION SERVICES P. LTD ON 5 .9.2008. FURTHER IT HAS CHANGED ITS NAME AS D&B TECHNOLOGIES & DATA SER VICES P. LTD ON 12.12.2012. DURING TE FINANCIAL YEAR 2007-08, THE ASSESSEE-COMPANY HAS ENTERED INTO BUSINESS TRANSFER AGREEMENT TO PUR CHASE STPI UNIT OF M/S DUN & BRAD STREET INFORMATION SERVICES INDIA PV T. LTD AS A GOING CONCERN BASIS BY WAY OF SLUMP SALE AND ACCORDINGLY ACQUIRED THE ASSETS. THE ASSESSEE-COMPANY CLAIMED AN AMOUNT OF ` 64,71,046/- AS DEDUCTION U/S 10A OF THE ACT. THE ASSESSING OFFIC ER COMPARED THE TRANSFER AGREEMENT AND FOUND DIFFERENCE IN DEPRECIA TION SCHEDULE AS UNDER: CLASS OF ASSET WDV TRANSFERRED AS PER BTA DATED 14.2.2007 WDV SOLD IN DRP&B(DBISIL) INDIA 3CD WITH RESPECT TO STPI 31.3.2007(TRANSFEROR) WDV SHOWN IN 3CD WITH RESPECT TO DRP&BPBSAPL AND ADDITION AS ON 31.3.2007 (TRANSFEREE) OFFICE EQUIPMENT 91,19,751 1,32,33,453 85,99,307 ITA NO.1257 & 1258/16 :- 3 -: COMPUTERS 2,32,62,582 2,64,97,167 2,43,65,062 VEHICLES 7,84,346 13,69,620 7,84,346 LEASEHOLD IMPROVEMENTS 1,51,53,833 NIL NIL FURNITURE & FITTINGS NIL 2,17,71,742 1,57,41,866 4. THE ASSESSING OFFICER CALLED FOR THE EXPLANATION FR OM THE ASSESSEE WHY THE SAME SHOULD NOT BE CONSIDERED AS S PLIT UP OR RECONSTRUCTION OF THE EXISTING UNIT. THE ASSESSEE FILED EXPLANATION BEFORE THE ASSESSING OFFICER STATING THAT THE SALE OF ASSETS AS ONGOING CONCERN SHOULD NOT BE HELD AS SPLIT UP OR RECONSTRU CTION OF THE EXISTING UNIT. NOT BEING SATISFIED WITH THE EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFICER HELD IT AS A MERE SPLIT UP/RECONS TRUCTION OF THE EXISTING UNIT AND NOT ELIGIBLE FOR CLAIMING THE DED UCTION U/S 10A OF THE ACT. THE ASSESSING OFFICER DISALLOWED THE EXEMPTIO N CLAIMED BY THE ASSESSEE AMOUNTING TO ` 64,71,046/- FOR ASSESSMENT YEAR 2007-08 AND ` 7,30,24,799/- FOR ASSESSMENT YEAR 2010-11. 5. AGGRIEVED, THE ASSESSEE WENT ON APPEAL BEFORE THE CIT(A) AND THE CIT(A) ALLOWED THE ASSESSEES CLAIM. WHIL E DOING SO, THE CIT(A) HAS GIVEN A FINDING IN HIS ORDER THAT THE EN TIRE ASSETS OF THE UNDERTAKING IS FOUND TO HAVE BEEN TRANSFERRED TO TH E ASSESSEE ON LOCK, STOCK AND BARREL BASIS AND THERE IS NO CASE F OR SPLITTING UP OR RECONSTRUCTION AS ADVOCATED BY THE ASSESSING OFFICE R. ITA NO.1257 & 1258/16 :- 4 -: 6. IN THE GROUNDS OF APPEAL FOR BOTH THE ASSESSMENT YE ARS 2007-08 AND 2010-11, THE DEPARTMENT HAS RAISED A GR OUND THAT THE LD.CIT(A) HAS NOT CONSIDERED THE CBDT CIRCULAR NO.1 OF 2013 DATED 17.1.2013. HENCE, THE LD. DR ARGUED THAT THE CASE SHOULD BE REMITTED BACK TO THE ASSESSING OFFICER TO CONSIDER CBDT CIRC ULAR NO.1 OF 2013. HE SUBMITTED THAT ON IDENTICAL FACTS FOR THE ASSESS MENT YEAR 2009-10 IN I.T.A.NO.760/MDS/2014, ORDER DATED 15.7.2016, T HE TRIBUNAL HAS REMITTED THE MATTER BACK TO THE ASSESSING OFFICER T O CONSIDER THE ISSUE BY OBSERVING AS UNDER: 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON E ITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS RIGHTLY SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE AND T HE LD. DR, THE DRP DIRECTED THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE IN THE LIGHT OF THE CBDT CIRCULAR NO.1 OF 2013 DATED 17.1.2013. A SIMILAR DIRECTION WAS GIVEN BY THIS T RIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08. T HE CIT(A), FOR THE ASSESSMENT YEAR 2007-08, IN FACT, EXAMINED THIS ISSUE AND FOUND THAT THERE WAS NO CASE FOR SPLITTING UP OR RE CONSTRUCTION, AND ACCORDINGLY, ALLOWED THE CLAIM OF THE ASSESSEE U/ S 10A OF THE ACT. THE ORDER OF THE CIT(A) FOR THE ASSESSMENT Y EAR 2007-08 IS DATED 3.2.2016. IT IS NOT KNOWN WHETHER THE REVENU E HAS FILED ANY APPEAL BEFORE THIS TRIBUNAL AGAINST THE ORDER O F THE CIT(A) FOR ASSESSMENT YEAR 2007-08. HOWEVER, FOR THE SAKE OF CONSISTENCY, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE DRP HAS RIGHTLY DIRECTED THE ASSESSING OFFICER TO CONSIDER CBDT CIR CULAR NO.1 OF 2013 AND ADJUDICATE THE CLAIM OF THE ASSESSEE U/S 10A OF THE ACT. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFI RMITY IN THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 7. ON THE OTHER HAND, THE LD. AR RELIED ON THE CIT(A) S ORDER. ITA NO.1257 & 1258/16 :- 5 -: 8. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL PLACED BEFORE US. FOR THE ASSESSMENT YEAR 2007-08 THE CIT(A) HAS EXAMINED THE BUSINESS TRANSFER AGREEMENT AND FOUND THAT THERE WAS NO CASE OF SPLITTING UP OR RECONSTRUCTION OF THE EX ISTING UNIT AND ALLOWED THE CLAIM OF THE ASSESSEE U/S 10A OF THE ACT. HOWEVER, BOTH THE CIT(A) AND THE ASSESSING OFFICER HAVE NOT CONSI DERED THE CBDT CIRCULAR NO.1 OF 2013 WHILE DECIDING THE ISSUE. TH EREFORE, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES FOR BOTH THE A SSESSMENT YEARS UNDER CONSIDERATION AND REMIT THE MATTER BACK TO TH E ASSESSING OFFICER TO EXAMINE THE CASE IN THE LIGHT OF CBDT CIRCULAR N O.1 OF 2013 AND DECIDE ON MERITS AFTER GIVING DUE OPPORTUNITY TO TH E ASSESSEE. 9. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH NOVEMBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( . . ' # $ ) (D.S. SUNDER SINGH) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 25 TH NOVEMBER, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF