M/s. Endeavour Technologies, Visakhapatnam V. The ITO, Visakhapatnam

ITA 131/VIZ/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9738 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 21-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAVI SHANKAR NARAYANA
• Assessee Lawyers: C KAMESWARA RAO
• Section: 10B

Judgement Text

ITA NO.131/VIZAG/2016 M/S. ENDEAVOUR TECHNOLOGIES, VISAKHAPATNAM ` 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER ./I.T.A.NO.131/VIZAG/2016 ( / ASSESSMENT YEAR: 2008-09) M/S. ENDEAVOUR TECHNOLOGIES, VISAKHAPATNAM VS. ITO, WARD - 3(1), VISAKHAPATNAM [PAN: AACFE3480C ] ( / APPELLANT) ( ! / RESPONDENT) / APPELLANT BY : SHRI C. KAMESWARA RAO, AR / RESPONDENT BY : SHRI RAVI SHANKAR NARAYANA, DR / DATE OF HEARING : 01.11.2016 / DATE OF PRONOUNCEMENT : 07.11.2016 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THIS APPEAL FILED BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-1, VISAKHAPATNAM DATED 18.01.2016 FOR THE AS SESSMENT YEAR 2008-09. 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS IN THE B USINESS OF DEVELOPMENT AND SALE OF SOFTWARE AND MAINTENANCE OF SOFTWARE. IN THE ASSESSMENT ORDER, THE A.O. HAS OBSERVED THAT THE AS SESSEE FIRM HAS ITA NO.131/VIZAG/2016 M/S. ENDEAVOUR TECHNOLOGIES, VISAKHAPATNAM ` 2 CLAIMED AN EXEMPTION U/S 10B OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') IN RESPECT OF INTEREST OF ` 20,512/-, EARNED ON FIXED DEPOSITS HELD WITH BANKS. THE A.O. HAS CALLED THE EXPLANATION HOW THIS AMOUNT WOULD BE ELIGIBLE FOR EXEMPTION U/S 10B OF T HE ACT. THE ASSESSEE HAS SUBMITTED VIDE LETTER DATED 30.8.2010 BY STATING THAT THE FIXED DEPOSITS FROM WHICH THE INTEREST UNDER CONSID ERATION EARNED WERE MADE TO PROVIDE BANK GUARANTEE TO OVERSEAS VENDORS TOWARDS THE FIRMS COMMITMENT TO FINISH THE JOB WORK IN TIME AND AS SU CH IT IS FOR THE BUSINESS PURPOSE AND EXEMPT FROM THE TAX. HOWEVER, THE ASSESSEE FIRM HAS NOT FILED ANY PROOF IN SUPPORT OF THE SAME. IT IS ALSO NOTICED FROM THE COPIES OF THE CONTRACT AGREEMENTS ENTERED BY TH E ASSESSEE THAT NO SUCH CONDITION WAS AVAILABLE IN THE AGREEMENTS. AC CORDINGLY, THE A.O. HAS NOT ACCEPTED THE EXPLANATION GIVEN BY THE ASSES SEE AND THE INTEREST INCOME OF ` 20,512/- BROUGHT TO TAX AND ADDED TO THE TOTAL INC OME OF THE ASSESSEE. ON APPEAL, CIT(A) CONFIRMED THE ORDE R OF THE A.O. 3. ON BEING AGGRIEVED, ASSESSEE CARRIED MATTER IN A PPEAL BEFORE THE CIT(A). THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMI TTED THAT THE INTEREST INCOME EARNED BY THE ASSESSEE IN CONNECTIO N WITH ITS BUSINESS, THEREFORE, THE SAME IS ELIGIBLE FOR EXEMPTION U/S 1 0B OF THE ACT. IN THIS CONNECTION, THE LD. COUNSEL FOR THE ASSESSEE HAS RE LIED UPON THE ITA NO.131/VIZAG/2016 M/S. ENDEAVOUR TECHNOLOGIES, VISAKHAPATNAM ` 3 DECISION OF HONBLE HIGH COURT OF NEW DELHI IN THE CASE OF RIVIERA HOME FURNISHING VS. ACIT IN ITA NO.459/2015 DATED 19.11. 2015. 4. ON THE OTHER HAND, THE LD. D.R. HAS POINTED OUT THAT THE ASSESSEE HAS NOT FILED AGREEMENTS ENTERED BY IT BEFORE THE T RIBUNAL AND THE A.O. HAS CONSIDERED THE SAME AND FOUND THAT THERE IS NO SUCH STIPULATION IN THE AGREEMENT AND THEREFORE, THE ORDER PASSED BY TH E AUTHORITIES BELOW HAS TO BE CONFIRMED. 5. I HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ONLY POINT FOR CONSIDERATION IS WHETHER THE INTEREST INC OME EARNED BY THE ASSESSEE OF ` 20,512/- FROM THE FIXED DEPOSIT HELD WITH THE BANK S IS ELIGIBLE FOR EXEMPTION U/S 10B OR NOT? THE ASSESSE E IS NOT ABLE TO FURNISH ANY COGENT MATERIAL TO SUBSTANTIATE THAT TH E FIXED DEPOSIT MADE BY THE ASSESSEE IS FOR THE PURPOSE OF BUSINESS. UN DER THESE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE INTEREST INCOME EARNED BY THE ASSESSEE CANNOT BE CONSIDERED THAT IT IS EARNED IN CONNECTION WITH THE BUSINESS OF THE ASSESSEE. SO F AR AS THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF RIVIERA HOME FU RNISHING VS. ACIT (SUPRA), NO APPLICATION TO THE FACTS OF THE CASE. THUS, I FIND NO REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT(A ). ITA NO.131/VIZAG/2016 M/S. ENDEAVOUR TECHNOLOGIES, VISAKHAPATNAM ` 4 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH NOV16. SD/- ( . ) (V. DURGA RAO) /JUDICIAL MEMBER ! /VISAKHAPATNAM: % /DATED : 07.11.2016 VG/SPS '! (! /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT M/S. ENDEAVOUR TECHNOLOGIES, DR. NO.8-56-6, NEAR ASHWINI SCHOOL, CHINA WALTAIR, VISAKHAPATNAM 2. / THE RESPONDENT THE ITO WARD-3(1), VISAKHAPATNA M 3. ) / THE CIT-1, VISAKHAPATNAM 4. ) ( ) / THE CIT(A)-1, VISAKHAPATNAM 5. ! , , , , ! / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // /0 , (SR.PRIVATE SECRETARY) , , ! / ITAT, VISAKHAPATNAM