M/s Maxim India Integrated Circuit Design Pvt. Ltd., Bangalore V. ITO, Bangalore

ITA 1305/BANG/2011

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2971 (ITAT-BANGALORE)
• Duration Of Justice: 8 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 19-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRADEEP KUMAR CIT BENGALURU
• Assessee Lawyers: PADAMCHAND KHINCHA
• Keywords: Depreciation
• Section: 143(3); 144C; 40a(ia); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE , JUDICIAL MEMBER IT (TP) A N O. 1 3 05 /BANG/201 1 ASSESSMENT YEAR : 20 07 - 08 M/S. MAXIM INDIA INTEGRATED CIRCUIT DESIGN PVT. LTD. , #132/133, WEST WING, 2 ND FLOOR, DOMLUR POST, OFF OLD AIRPORT ROAD, BENGALURU 560 0 3 7 . PAN : A A ACM 9437 E VS. INCOME TAX OFFICER , WARD 12 ( 1 ) , BENGALURU . APPELLANT RESPONDENT ASSESSEE BY : SHRI. PADAM CHAND KHINCHA , CA REVENUE BY : S HRI. PRADEEP KUMAR , CIT (DR)(ITAT), BENGALURU DATE OF HEARING : 24 . 0 2 .20 20 DATE OF PRONOUNCEMENT : 13 . 0 3 .20 20 O R D E R PER A. K. GARODIA, ACCOUNTANT MEMBER T H I S APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ASSESSMENT O RDER FOR THE A SSESSMENT Y EAR 20 07 - 08, UNDER SECTION 143(3) R.W.S. 144C OF THE INCOME TAX ACT, 1961 . 2. TH IS APPEAL WAS ALREADY DECIDED BY THE TRIBUNAL AS PER ITS ORDER DATED 29.09.2020 AND THEREAFTER , THE ASSESSEE MOVED A MISCELLANEOUS PETITION (MP) AND AS PER THE MP NO.63/BANG/2019 DATED 01.11.2019, THIS TRIBUNAL ORDER WAS RECALLED BY THE TRIBUNAL FOR A LIMITED PURPOSE FOR ADJUDICATING ADDI TIONAL GROUNDS OF APPEAL. HENCE, NOW WE HAVE TO DECIDE ONLY THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WHICH READS AS UNDER: - 1.1 THE LOWER AUTHORITIES HAVE ERRED IN NOT GRANTING DEDUCTION U/S 10A ON DISALLOWANCE OF RS.53,77,052/ - BEING IT (TP) A NO. 1 3 05 /BANG/201 1 PAGE 2 OF 3 INTEREST PAID ON ECB LOAN AND DEPRECIATION OF RS. 43,500/ - ON COMPUTERS DUE EXCHANGE GAIN ADJUSTMENT. 3. IN THE COURSE OF HEARING, IT WAS SUBMITTED BY LEARNED AR OF THE ASSESSEE THAT BEFORE THE DRP, THE ASSESSEE HAS RAISED AN ISSUE REGARDING DISALLOWANCE OF INTEREST ON ECB LOAN AMOUNTING TO RS.53,77,052/ - FROM HOLDING COMPANY AND THIS DISALLOWANCE WAS CONFIRM ED BY DRP BUT THIS ISSUE WAS NOT RAISED BEFORE THE AUTHORITIES BELOW THAT EVEN IF THIS DISALLOWANCE IS CONFIRMED REGARDING INTEREST ON ECB LOAN AND DEPRECIATION OF RS.53,500/ - ON COMPUTERS DUE TO FOREIGN EXCHANGE GAIN ADJUSTMENT, THEN DEDUCTION UNDER SECTI ON 10A OF THE IT ACT, 1961 SHOULD BE ALLOWED ON THE BASIS OF ASSESSED INCOME AFTER MAKING THESE TWO DISALLOWANCES. HE SUBMITTED THAT THIS ISSUE IS BEING RAISED BEFORE THE TRIBUNAL BY WAY OF THIS ADDITIONAL GROUND AND SINCE THIS IS A LEGAL GROUND, THIS SH OULD BE ADMITTED AND DECIDED. HE ALSO SUBMITTED THAT AS PER CIRCULAR 37/2016 DATED 02.11.2016, IT WAS PRESCRIBED THAT DEDUCTION UNDER CHAPTER VI A IS ADMISSIBLE ON THE PROFITS SO ENHANCED BY THE DISALLOWANCES UNDER SECTION 32, SECTIONS 40A(IA) AND 40 A ( 3 ) AND 4 3B ETC. HE SUBMITTED THAT DEDUCTION UNDER SECTION 10A SHOULD ALSO BE ALLOWED ON THE BASIS OF ENHANCED INCOME AFTER THESE TWO DISALLOWANCES. RELIANCE WAS PLACED ON THE JUDICIAL PRONOUNCEMENT REPORTED IN THE CASE OF CIT VS. GEM PLUS JEWELLERY 330 ITR 175 . HE SUBMITTED THAT AS PER QUESTION NO.B RAISED BEFORE HONBLE BOMBAY HIGH COURT, THIS WAS THE QUESTION AS TO WHETHER THE TRIBUNAL WAS JUSTIFIED IN DIRECTING THE AO TO GRANT EXEMPTION UNDER SECTION 10A ON THE ASSESSED INCOME WHICH WAS ENHANCED DUE TO D ISALLOWANCE OF EMPLOYERS AS WELL AS EMPLOYEES CONTRIBUTION TOWARDS PF/ESI AND THIS QUESTION WAS DECIDED IN FAVOUR OF THE ASSESSEE AS PER PARA NOS.11 AND 12 OF THIS JUDGMENT AND IT WAS HELD THAT WHEN ANY DISALLOWANCE IS MADE BY THE AO, THIS IS AN INCREASE IN THE BUSINESS PROFITS OF THE ASSESSEE AND THE SAME CANNOT BE EXCLUDED FOR THE IT (TP) A NO. 1 3 05 /BANG/201 1 PAGE 3 OF 3 PURPOSE OF COMPUTING DEDUCTION ALLOWABLE TO THE ASSESSEE UNDER SECTION 10A. LEARNED DR OF THE REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 4. WE HAVE CONSIDERED THE RIV AL SUBMISSIONS AND WE ADMIT THIS ADDITION GROUND AND RESTORE THIS MATTER BACK TO THE FILE OF THE DRP TO DECIDE THIS ISSUE AS PER LAW BECAUSE THIS ISSUE IS RAISED BEFORE US FOR THE FIRST TIME AND NO SUCH ISSUE WAS RAISED BY THE ASSESSEE BEFORE DRP. WE THER EFORE , FEEL IT PROPER THAT TH IS ISSUE SHOULD BE DECIDED BY THE DRP FIRST BEFORE WE DECIDE THE ISSUE. THIS ADDITIONAL GROUND OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ULTIMATE RESULT REMAINS THE SAME THAT ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES ALLOWED . PRONOUNCED IN THE OPEN COURT ON TH E DATE MENTIONED ON THE CAPTION PAGE . S SD/ - SD/ - ( PAVAN KUMAR GADALE ) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED : MARCH , 20 20 . /NS/ * COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.