Income Tax Officer, Ward-3(1), Hyderabad V. Sealion Sparkle Port and Terminal Services (Dahej) Limited., Hyderabad

ITA 1386/Hyd/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2623 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 04-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMAN MALIK
• Assessee Lawyers: VARSHA CHAWDA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 1386/HYD/2017 ASSESSMENT YEAR: 2013-14 THE INCOME TAX OFFICER, WARD 3(1), HYDERABAD VS. M/S SEALION SPARKLE PORT & TERMINAL SERVICES (DAHEJ) LTD., HYDERABAD. PAN AAHCS 0841D (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SUMAN MALIK ASSESSEE BY : SHRI VARSHA CHAWDA DATE OF HEARING 18-01-2018 DATE OF PRONOUNCEMENT 24-01-2018 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) - 3, HYDERABAD, DATED 09/06/2017 FOR THE AY 2013-14. 2. BRIEF FACTS ARE, THE ASSESSEE A COMPANY ENGAGED IN THE BUSINESS OF OPERATING SHIPS AND PORT SERVICES HAD F ILED ITS RETURN OF INCOME FOR THE AY 2013-14, DECLARED TOTAL INCOME OF RS. 2,67,560/- AFTER CLAIMING DEDUCTION U/S 80IA FOR RS. 1,19,496/ -. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND TOTAL INCOME WAS DETERMINED AT RS. 36,43,967/- BY THE AO, DISALLOWING THE FOLL OWING DEDUCTIONS: I) DEDUCTION U/S 80IA OF THE INCOME-TAX ACT, 1961 (IN SHORT ACT) WAS DISALLOWED. ACCORDING TO AO DEDUCTION IS ALLOW ABLE UNDER SECTION 80IA(4) TO AN INDIAN COMPANY, IF THE CONTR ACT FOR OPERATING AND MANAGEMENT IS AWARDED BY CENTRAL GOV T./STATE 2 ITA NO. 1386/HYD/2017 SEALION SPARKLE PORT & TERMINAL SERVICES (DAHEJ) LT D., HD. GOVT./LOCAL AUTHORITY/ANY OTHER STATUTORY BODY. IN THE ASSESSEES CASE, THE CONTRACT WAS AWARDED BY M/S PETRONET LNG LTD. (PLL) WHICH WAS A PRIVATE PARTY. HENCE, DEDUCTION U/S 80 IA WAS DENIED. II) AO HAD DISALLOWED THE CONSULTANCY CHARGES PAID TO PSA MARINE PTE LTD. (PSAM) OF RS. 32,57,220/-. THE PAY MENT MADE BY THE ASSESSEE TOWARDS CONSULTANCY AND SERVICE CH ARGES INCLUDING LEGAL AND PROFESSIONAL CHARGES TO PSAM A S PER AGREEMENT DATED 29/10/2014. AO CONSIDERED THE SERV ICES PROVIDED BY PSAM WERE ENUMERATED IN ANNEXURE A O F THE AGREEMENT AND SUCH SERVICES ARE ADVISORY IN NATURE AND DID NOT INVOLVE ACTUAL CARRYING OUT OF ANY OPERATION AND T HERE WAS NO NECESSITY TO MAKE SUCH PAYMENTS TO PSAM. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED APPEAL BEFORE CIT(A). THE CIT(A) ALLOWED THE DEDUCTION U/ S 80IA AND THE CONSULTANCY CHARGES, RELYING ON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASES FOR AY 2008-09 IN ITA NOS. 142/H/2013, ORDER DATED 21/06/2013, AND FOR AY S 2007-08 TO 2010-11 IN ITA NO. 1399, 1400/H/13 AND 1401/H/13, C ONSOLIDATED ORDER DATED 20/02/14. 4. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US RA ISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED CIT(A) ERRED ON BOTH LAW AND FACTS O F THE CASE. 2. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF DEDUCTION VI] S.80IA MADE BY THE ASSESSING OFFICER TO THE TUNE OF RS.1,19,496. 3. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSEE DID NOT FULFILL THE CONDITIONS PRESCRIBED FOR CLAIMING THE DEDUCTION U/S.80IA OF THE ACT. 4. THE LEARNED CIT(A) ERRED IN DELETING THE DISALLO WANCE OF EXPENDITURE, CLAIMED BY ASSESSEE TOWARDS CONSULTANC Y CHARGES, MADE BY THE ASSESSING OFFICER TO THE TUNE OF RS.32, 57,220/-. 3 ITA NO. 1386/HYD/2017 SEALION SPARKLE PORT & TERMINAL SERVICES (DAHEJ) LT D., HD. 5. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE OBSERVATIONS OF THE AO THAT THE EXPENDITURE INCURRED BY THE ASSE SSEE IS NOT FOR THE PURPOSE OF THE BUSINESS. 6. ANY OTHER GROUND(S) THAT MAY BE URGED AT THE TIM E OF HEARING. 5. THE LD. DR RELIED ON THE ORDER OF AO. 6. THE LD. AR SUBMITTED THAT THE DISALLOWANCES MADE BY THE AO WERE ALREADY COVERED BY THE ASSESSEES OWN CASE FOR AYS 2007-08, 2008-09 , 2009-10 AND 2010-11 OF THIS COORDINATE BE NCHES IN ORDER DATED 21/06/13 FOR AY 2008-09 AND CONSOLIDATED ORDE R DATED 20/02/2014 FOR AYS 2007-08, 2009-10 AND 2010-11. 7. WE HAVE HEARD THE SUBMISSIONS OF THE BOTH THE PA RTIES AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL A S OTHER MATERIAL ON RECORD. WE FIND THAT SIMILAR ISSUES CAME UP FOR CO NSIDERATION BEFORE THE COORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR AY 2007-08 TO 2010-11 (SUPRA) WHEREIN THE COORDINATE B ENCH ALLOWED THE ASSESSEES CLAIMS, AS RAISED IN THIS APPEAL. COPIES OF THE ORDERS OF THE TRIBUNAL ARE AVAILABLE ON RECORD. THEREFORE, W E DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) IN ALLOWING TH E GROUNDS RAISED BY THE ASSESSEE FOLLOWING THE DECISION OF THE COORDINA TE BENCHES OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2007-08 TO 2 010-11 (SUPRA) AND ACCORDINGLY, WE UPHOLD THE ORDER OF CIT(A) DISM ISSING THE APPEAL FILED BY REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON 24 TH JANUARY, 2018. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHM AN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 24 TH JANUARY, 2018 KV 4 ITA NO. 1386/HYD/2017 SEALION SPARKLE PORT & TERMINAL SERVICES (DAHEJ) LT D., HD. COPY TO:- 1) ITO, WARD 3(1), 7 TH FLOOR, SIGNATURE TOWERS, KONDAPUR, HYDERABAD 2) M/S SEALION SPARKLE PORT & TERMINAL SERVICES (DA HEJ) LTD., 128, 1 ST FLOOR, SRINIGAR COLONY, HYDERABAD 500 073. 3) CIT (A)- 3 , HYDERABAD. 4) PR. CIT 3, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.