ITO, V. M/s Integral India Software Development Centre,

ITA 1350/BANG/2013

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5662 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-07-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 20-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: K P SRINIVAS
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI. INTURI RAMA RAO, ACCOUNTANT MEMBER IT(TP)A NO.1350/BANG/2013 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER, WARD -11(2), BENGALURU. VS. M/S. INTEGRAL INDIA SOFTWARE DEVELOPMENT CENTRE (P) LTD., NO.16/1, GROUND FLOOR, CAMBRIDGE ROAD, ULSOOR, BENGALURU-560008. PAN : AAACO2465N APPELLANT RESPONDENT REVENUE BY : SHRI. B. R. RAMESH, JCIT ASSESSEE BY : SHRI. K. P. SRINIVAS, CA DATE OF HEARING : 10.01.2018 DATE OF PRONOUNCEMENT : 19.01.2018 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE ON FOLLOWI NG GROUNDS: 1. THE ORDER OF THE LEARNED CIT (APPEALS) IS OPPOSED T O LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) ERRED IN DIRECTING THE TPO TO RECONS IDER THE WORKING AND REWORK THE ALP WITHOUT APPRECIATING THE FACT THAT NO FRESH FACTS WERE BROU GHT BEFORE HIM APART FROM THOSE WHICH WERE ALREADY DISCUSSED IN THE ORDERS OF A.O / TPO. 3. THE LD. CIT(A) ERRED IN FOLLOWING THE ORDER OF THE ITAT FOR THE ASSESSMENT YEAR 2006-07 IN ITA NO 1246 OF 2010 WITHOUT APPRECIATING THE FACT THAT THE ITAT IN ITS ORDER HAD DIRECTED THE ASSESSING OFFIC ER TO REFER THE MATTER TO THE EP WHICH IN TURN SHOULD DISPOSE O FF THE ASSESSEES OBJECTIONS JUDICIALLY BY A SPEAKIN G ORDER TAKING INTO CONSIDERATION THE JUDICIA PRECENTS ON T HE ISSUE AND ALSO THE ORDER OF THE TRIBUNAL IN ITA NO. 1231 OF 2010 DT, 5.8.2011 IN THE CASE OF M/S GENISYS INTEGR ATING SYSTEMS INDIA PVT LTD., WHERE SIMILAR ISSUES HAVE BEEN CONSIDERED WHILE THE CIT(A) DOES NOT HAVE SUCH POWERS CONSEQUENT TO THE AMENDMENT OF SECTION 251(1)(A) BY THE FINANCE ACT, 2001 WEF 01.06.2001 IT(TP)A NO.1350/BANG/2013 PAGE 2 OF 3 4 . THE CIT(A) ERRED IN DIRECTING THE AO TO EXCLUDE TH E EXPENDITURE FOR DELIVERY OF SOFTWARE AND THE EXPE NDITURE INCURRED IN FOREIGN CURRENCY FROM THE TOTAL TURNOVE R ALSO WHILE COMPUTING THE DEDUCTION U/S10A, OF THE I.T. ACT, WITHOUT APPRECIATING THE FACT THAT THERE IS NO PROV ISION THAT SUCH EXPENSES SHOULD HE REDUCED FROM THE TOTAL TURNOVER ALSO, AS CLAUSE (IV) OF THE EXPLANATION TO SECTION 1OA PROVIDES THAT SUCH EXPENSES ARE TO BE REDUCED ONLY FROM THE EXPORT TURNOVER. 5. THE CIT(A) ERRED IN NOT APPRECIATING THE FACT TH AT THE JURISDICTIONAL HIGH COURT'S DECISION IN THE CASE OF TATA ELXSI LIMITED 349 ITR 98 NOT BEEN ACCEPTED BY THE DEPARTMENT AND AN APPEAL HAS BEFORE THE HON'BLE SUPREME COURT. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT TH E ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE ASSESSING OF FICER BE RESTORED. 2. WITH REGARD TO GROUND NOS. 1 AND 2, IT WAS CONTE NDED BY THE LEARNED DR THAT CIT(A) HAS NO JURISDICTION TO SET ASIDE THE MATTER TO THE AO FOR RECONSIDERATION OF THE ISSUE. THE CIT(A) CAN ONLY CALL FOR A REMAND REPORT FROM THE A O ON CERTAIN NEW FACTS AND ISSUES ON WHICH HE WANTS CERTAIN INFORMATION FROM THE AO. BU T HE CANNOT REMAND THE MATTER BACK TO THE AO FOR READJUDICATION OF THE ISSUE. SINCE HE REMANDED THE MATTER BACK TO THE AO, THE ORDER OF THE CIT(A) DESERVES TO BE SET ASIDE. THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTED THE ORDER OF THE CIT(A). 3. HAVING CAREFULLY EXAMINED THE ORDER OF THE CIT(A ), WE FIND THAT CIT(A) HAS REMANDED THE MATTER BACK TO THE AO WHICH HE CANNOT DO AS PER THE PROVISIONS OF THE ACT. EARLIER, HE WAS ALLOWED TO DO SO, BUT LATER ON BY V IRTUE OF AMENDMENT HE CANNOT REMAND THE MATTER BACK TO THE AO. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT HIM TO READJUDICATE THE ISSUES RAISED BEFORE US IN THE LIG HT OF ASSESSEES CONTENTIONS. IF HE WANTS COMMENTS FROM THE AO HE CAN CALL FOR A REMAND REPOR T BUT HE HAS TO ADJUDICATE THE ISSUES HIMSELF. ACCORDINGLY, THE MATTER IS RESTORED TO TH E CIT(A) FOR READJUDICATION OF THE ISSUES AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE A SSESSEE. 4. APROPOS GROUND NOS. 4 AND 5, THE ISSUE IS COVERE D BY JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF TATA ELXSI LTD., 349 ITR 98. WHILE ADJUDICATING THE ISSUE, THE CIT(A) HAS FOLLOWED THE JUDGMENTS OF THE JURISDICTI ONAL HIGH COURT. WE THEREFORE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, WE CONFIRM HI S ORDER. ACCORDINGLY, APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. IT(TP)A NO.1350/BANG/2013 PAGE 3 OF 3 5. IN THE RESULT, APPEAL OF THE REVENUE IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 29 TH JANUARY, 2018. SD/- SD/- ( INTURI RAMA RAO ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PLACE : BANGALORE DATED : 19/01/2018 /NS/* COPY TO : 1 APPELLANT 2 RESPONDENT 3 C IT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.