M/s Ramsoft Technologies Pvt. Ltd., Bangalore V. DCIT, Bangalore

ITA 1460/BANG/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0253 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL KUMAR AGARWALA JCITA
• Assessee Lawyers: RAMASUBRAMANIAN
• Keywords: Business income; Depreciation; Carry forward of business losses; Retrospective amendment; Reason to believe; Unabsorbed depreciation
• Section: 143(3); 72(1); 14A; 10B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, BANGALORE BEFORE S MT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ITA NO. 1460/ BANG/20 15 (ASSESSMENT YEAR: 2008 - 09 ) M/S.RAMSOFT TECHNOLOGIES PVT. LTD. NO.104A, 4 TH CROSS, ELECTRONIC CITY, HOSUR ROAD, BANGALORE - 561229. PA NO.AAACR 6948 R VS. APPELLANT DEPUTY COMMISIONER OF INCOME - TAX, CIRCLE 12(4), BANGALORE. RESPONDENT APPELLANT BY : SHRI RAMASUBRAMANIAN, CA. R ESPONDENT BY : SHRI SUNIL KUMAR AGARWALA, JCIT(A) DATE OF HEARING : 21/06/2016 DATE OF PRONOUNCEMENT : 30 /06/2016 O R D E R PER I NTURI RAMA RAO, AM : T HIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE CIT(A) - V, BANGA LORE, DATED 13/10/2015 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT IS BAD AND E RRONEOUS ITA NO . 1460 /BANG/201 5 PAGE 2 OF 9 IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN PASSING THE ORDER U/S 147 OF THE ACT AND SUCH AN ORDER IS WITHOUT JURISDICTION. 3. THAT THE REASONS RECO RDED BY THE COMMISSIONER OF INCOME TAX (APPEALS) HAVE NO NEXUS WITH THE FORMATION OF BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT AND THEREFORE, REASSESSMENT IS BAD IN LAW. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) COULD NOT HAVE RECORDED THE REASON THAT THE INCOME HAS ESCAPED ASSESSMENT BECAUSE OF THE LOSS OF THE EARLIER YEAR HAVE TO BE SET - OFF BEFORE ALLOWING THE DEDUCTION U/S 10A OF THE ACT, AS THE HON'BLE ITAT BANGALORE BENCH HAD HELD THAT SUCH A SET - OFF IS NOT PERMISSIBLE AND THE DECISION WAS IN FORCE ON THE DATE ON WHICH THE REASONS WERE RECORDED. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN SETTING - OFF THE CARRY FORWARD LOSSES AND DEPRECIATION BEFORE THE ALLOWING THE DEDUCTION U/S 10A OF THE ACT. 6. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN DISALLOWING A SUM OF RS.45,988 U/S 14A OF THE ACT WITHOUT BRINGING ON RECORD ANY MATERIAL TO SHOW THAT THE APPELLANT HAD INCURRED ANY EXPENSE TO RECEIVE THE DIVIDENDS FROM M UTUAL FUNDS. 7. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN MECHANICALLY APPLYING RULE 8D WITHOUT BRINING ON RECORD ANY PROXIMATE EXPENSE INCURRED TO EARN SUCH INCOME. 8. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) ERRED IN LAW AND ON FACTS IN INCLUDING A SUM OF RS.64,90,000 WHILE BEING THE INVESTMENT IN FUSION SOFTWARE ENGINEERING PVT. LTD., IN THE VALUE OF AVERAGE INVESTMENTS AS PER RULE 8D. EACH OF THE ABOVE GROUNDS IS WITHOUT PREJUDICE TO ONE ANOTHER AND THE APPELLANT CRAVES LEAVE OF THE H ON BLE INCOME TAX APPELLATE TRIBUNAL, BANGALORE ITA NO . 1460 /BANG/201 5 PAGE 3 OF 9 TO ADD, DELETE, AMEND OR OTHERWISE MODIFY ONE OR MORE OF THE ABOVE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3. BRIEFLY, FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COMPANY DULY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF EXPORT OF SOFTWARE. RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED ON 29/09/2008 DISCLOSING NIL INCOME AFTER CLAIMING EXEMPTION OF RS.3,20,107/ - UNDER THE PROVISIONS OF SEC.10A OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT' FOR SHORT] AND SET OFF OF BROUGHT FORWARD LOSS OF RS.1,87,312/ - . THE RETURN OF INCOME WAS PROCESSED U/S 143(1) ON 06/07/ 2009. APPARENTLY THERE WERE NO SCRUTINY PROCEEDINGS. SUBSEQUENTLY, NOTICE DATED 26/5/2011 WAS ISSUED REQUIRING THE ASSESSEE - COMPANY TO FILE RETURN OF INCOME. IN RESPONSE TO THE SAME, ASSESSEE - COMPANY SUBMITTED THAT THE ORIGINAL RETURN OF INCOME FILED MAY BE TREATED AS RETURN IN RESPONSE TO NOTICE U/S 148 AND ALSO REQUESTED FOR REASONS RECORDED FOR ISSUE OF NOTICE U/S 148. THE ASSESSING OFFICER [AO] SUBSEQUENTLY COMPLETED THE ASSESSMENT U/S 143(3) R.W.S.147 VIDE ORDER DATED 18/03/2013 AT NIL INCOME. 4. BEING AGGRIEVED, AN APPEAL WAS FILED BEFORE THE CIT(A) WHO VIDE IMPUGNED ORDER, PARTLY ALLOWED THE APPEAL. 5. BEING AGGRIEVED, ASSESSEE - COMPANY IS IN APPEAL BEFORE US. LEARNED AR OF THE ASSESSEE SUBMITTED THAT THERE WAS NO REASON ITA NO . 1460 /BANG/201 5 PAGE 4 OF 9 TO BELIEVE THAT I NCOME GOT ESCAPED ASSESSMENT FROM TAX. HE, ACCORDINGLY PRAYED THAT THE ORDER OF RE - ASSESSMENT MAY BE QUASHED. ON THE OTHER HAND, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDERS OF THE CIT(A). 6. WE HEARD RIVAL SUBMISSIONS AND PERUSED MAT ERIAL ON RECORD. THE ASSESSEE - COMPANY RAISED A PRELIMINARY GROUND CHALLENGING THE VERY REOPENING OF THE ASSESSMENT. IT IS THE CONTENTION OF THE ASSESSEE - COMPANY THAT THERE WAS NO REASON TO BELIEVE THAT INCOME GOT ESCAPED FROM TAX. IT IS TRITE LAW THAT I T IS A CONDITION PRECEDENT FOR ASSUMPTION OF JURISDICTION U/S 147 TO ESTABLISH THAT THERE WAS REASONABLE BELIEF ON THE PART OF THE AO THAT INCOME ESCAPED ASSESSMENT TO TAX. THIS HAS TO BE JUDGED ON THE TOUCHSTONE OF THE REASONS RECORDED BY THE AO. THE RE ASONS RECORDED FOR REOPENING ARE AS UNDER: THE ASSESSEE COMPANY HAD CLAIMED DEDUCTION U/S 10A OF THE IT ACT, 1961. ACCORDINGLY, THE ASSESSEE - COMPANY HAD NOT SET OFF OF THE BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION BEFORE CLAIMING DEDUCTION U/S 1 0A OF THE IT ACT 1961. THEREFORE, THE ASSESSEE - COMPANY HAD CLAIMED EXCESS DEDUCTION U/S 10A OF THE IT ACT,1961. FROM THE ABOVE, IT IS CLEAR THAT THE AO FORMED A BELIEF THAT INCOME ESCAPED ASSESSMENT FROM TAX ON THE GROUND THAT THE ASSESSEE - COMPANY HAD NO T SET OFF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION BEFORE CLAIMING DEDUCTION U/S 10A OF THE ACT. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE - COMPANY BY ITA NO . 1460 /BANG/201 5 PAGE 5 OF 9 THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. YOKOGAWA INDIA LTD. ( 341 ITR 385) WHEREIN IT WAS HELD AS FOLLOWS: 21. PRIOR TO THE INTRODUCTION OF SUB - SECTION (6) OF SECTIONS 10A AND 10B OF THE FINANCE ACT, 2000, WHICH CAME INTO EFFECT FROM APRIL 1, 2001, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE OF THE PREVIOUS YEAR RE LEVANT TO THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE LAST OF THE RELEVANT ASSESSMENT YEARS, OR OF ANY PREVIOUS YEAR, RELEVANT TO ANY SUBSEQUENT ASSESSMENT YEAR. SUB - SECTION (2) OF SECTION 32, CLAUSE (II) OF SUB - SECTION (3) OF SECTION 32A. CLAUSE (II) O F SUB - SECTION (2) OF SECTION 33 AND SUB - SECTION (4) OF SECTION 35 OF THE ACT OR THE SECOND PROVISO TO CLAUSE (IX) OF SUB - SECTION (1) OF SECTION 36 SHALL NOT BE APPLICABLE IN RELATION TO ANY SUCH ALLOWANCE OR DEDUCTION. SIMILARLY, NO LOSS AS REFERRED TO IN SUB - SECTION (1) OR IN SECTION 72 OR SUB - SECTION (1) OR SUB - SECTION (3) OF SECTION 74 IN SO FAR AS SUCH LOSS RELATES TO THE BUSINESS OF THE UNDERTAKING WAS PERMITTED TO BE CARRIED FORWARD OR SET OFF WHERE SUCH LOSS RELATES TO ANY OF THE RELEVANT ASSESSMENT YEARS. 22. IT IS IN THIS BACKGROUND THE FINANCE ACT, 2003, WAS INTRODUCED BY INSERTING THE WORDS 'THE YEAR ENDING UP TO THE FIRST DAY OF APRIL, 2001, FOR THAT IN CLAUSES (I) AND (II) OF SUBA - SECTION (6) RESTRICTING THE DISALLOWANCE ONLY UP TO THE FIRST DAY OF APRIL, 2001, AND GRANTING THE BENEFIT, OF THOSE PROVISIONS EVEN IN RESPECT OF UNITS TO WHICH SECTIONS 10A AND 10B IS APPLICABLE. THE FINANCE ACT, 2003, AMENDED THIS SUB - SECTION WITH RETROSPECTIVE EFFECT FROM APRIL 1, 2001, BY LIFTING THE EMBARGO IN THE AFORESAID CLAUSES IN RESPECT OF DEPRECIATION AND BUSINESS LOSS RELATING TO THE ASSESSMENT YEAR 2001 - 02 ONWARDS. THE AMENDMENT INDICATES THE LEGISLATIVE INTENTION OF PROVIDING THE BENEFIT OF CARRY FORWARD OF DEPRECIATION AND BUSINESS LOSS RELATING TO ANY Y EAR OF THE TAX HOLIDAY PERIOD TO BE SET OFF AGAINST INCOME OF ANY YEAR POST - TAX HOLIDAY. THIS IS SUPPORTED BY CIRCULAR NO. 7 OF 2003 WHEREIN THE BOARD HAS STATED THAT THE PURPOSE OF AMENDMENT IS TO ENTITLE AN ASSESSEE TO THE BENEFIT OF CARRY FORWARD OF DEP RECIATION AND LOSS SUFFERED DURING THE TAX HOLIDAY PERIOD. THE CIRCULAR DATED SEPTEMBER 5, 2003, READS AS UNDER ([2003] 263 ITR (ST.) 62, 77) : '20. PROVIDING FOR CARRY FORWARD OF BUSINESS LOSSES AND UNABSORBED DEPRECIATION TO UNITS IN SPECIAL ECONOMIC ZON ES AND 100 PER CENT. EXPORT ORIENTED UNITS : 20.1 UNDER THE EXISTING PROVISIONS OF SECTIONS 10A AND 10B, THE UNDERTAKINGS OPERATING IN A SPECIAL ECONOMIC ZONE (UNDER SECTION 10A) AND 100 PER CENT. EXPORT ITA NO . 1460 /BANG/201 5 PAGE 6 OF 9 ORIENTED UNITS (EOU'S) (UNDER SECTION 10B) ARE NOT P ERMITTED TO CARRY FORWARD THEIR BUSINESS LOSSES AND UNABSORBED DEPRECIATION. 20.2 WITH A VIEW TO RATIONALIZE THE EXISTING TAX INCENTIVES IN RESPECT OF SUCH UNITS SUB - SECTION (6) IN SECTIONS 10A AND 10B HAS BEEN AMENDED TO DO AWAY WITH THE RESTRICTIONS ON T HE CARRY FORWARD, OF BUSINESS LOSSES AND UNABSORBED DEPRECIATION. 20.3 THE AMENDMENTS HAVE BEEN BROUGHT INTO EFFECT RETROSPECTIVELY FROM APRIL 1, 2001, AND HAVE BEEN MADE APPLICABLE TO BUSINESS LOSSES OR UNABSORBED DEPRECIATION ARISING IN THE ASSESSMENT YE AR 2001 - 02 AND SUBSEQUENT YEARS.' 23. IT IS INTERESTING TO NOTE THAT SUCH RELAXATION HAS NOT BEEN MADE IN SECTION 10C WHICH PROVIDES FOR EXEMPTION IN RESPECT OF PROFITS OF CERTAIN UNDERTAKINGS IN NORTH EASTERN REGION. THIS MAKES CLEAR THE LEGISLATIVE INTEN TION OF PROVIDING RELAXATION WHEREVER IT DEEMS FIT AND IN THE PRESENT CASE, SUCH RELAXATION HAS BEEN MADE IN SECTION 10A BUT NOT IN SECTION 10C. 24. IT IS TO BE NOTED THAT THE AFORESAID AMENDMENT READ WITH THE BOARD CIRCULAR DOES NOT MILITATE AGAINST THE P ROPOSITION THAT THE BENEFIT OF RELIEF UNDER THIS SECTION IS IN THE NATURE OF EXEMPTION WITH REFERENCE TO THE COMMERCIAL PROFITS. HOWEVER, IN ORDER TO GIVE EFFECT TO THE LEGISLATIVE INTENTION OF ALLOWING THE CARRY FORWARD OF DEPRECIATION AND LOSS SUFFERED I N RESPECT OF ANY YEAR DURING THE TAX HOLIDAY FOR BEING SET OFF AGAINST INCOME POST - TAX HOLIDAY, IT IS NECESSARY THAT THE NOTIONAL COMPUTATION OF BUSINESS INCOME AND THE DEPRECIATION AS PER THE PROVISIONS OF THE ACT SHOULD BE MADE FOR EACH YEAR OF THE TAX H OLIDAY PERIOD. WHILE SO COMPUTING, ATTENTION WILL HAVE TO BE GIVEN TO THE PROVISIONS OF SECTIONS 70, 71, 72 AND SECTION 32(2). THE AMOUNT OF DEPRECIATION AND BUSINESS LOSS REMAINING UNABSORBED AT THE END OF THE TAX HOLIDAY PERIOD SHOULD BE DETERMINED SO TH AT THE SAME MAY BE SET OFF AGAINST THE INCOME POST - TAX HOLIDAY PERIOD. 25. CHAPTER VI DEALS WITH THE AGGREGATION OF INCOME AND SET OFF OR CARRY FORWARD OF LOSS. SECTION 72(1) DEALS WITH THE CARRY FORWARD AND SET OFF OF BUSINESS LOSS WHICH READS AS UNDER : '72.(1) WHERE FOR ANY ASSESSMENT YEAR, THE NET RESULT OF THE COMPUTATION UNDER THE HEAD 'PROFITS AND GAINS OF BUSINESS OR PROFESSION' IS A LOSS TO THE ASSESSEE, NOT BEING A LOSS SUSTAINED IN A SPECULATION BUSINESS, AND SUCH LOSS CANNOT BE OR IS NOT WHOLLY SET OFF AGAINST INCOME UNDER ANY HEAD OF INCOME IN ACCORDANCE WITH THE PROVISIONS OF SECTION 71, SO MUCH OF THE LOSS AS HAS NOT BEEN SO SET OFF ITA NO . 1460 /BANG/201 5 PAGE 7 OF 9 OR, WHERE HE HAS NO INCOME UNDER ANY OTHER HEAD, THE WHOLE LOSS SHALL, SUBJECT TO THE OTHER PROVISIONS OF THIS C HAPTER, BE CARRIED FORWARD, TO THE FOLLOWING ASSESSMENT YEAR, AND - ( I ) IT SHALL BE SET OFF AGAINST THE PROFITS AND GAINS, IF ANY, OF BUSINESS OR PROFESSION CARRIED ON BY HIM AND ASSESSABLE FOR THAT ASSESSMENT YEAR ; ( II ) IF THE LOSS CANNOT BE WHOLLY S O SET OFF, THE AMOUNT OF LOSS NOT SO SET OFF SHALL BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR AND SO ON : PROVIDED THAT WHERE THE WHOLE OR ANY PART OF SUCH LOSS IS SUSTAINED IN ANY SUCH BUSINESS AS IS REFERRED TO IN SECTION 33B WHICH IS DISCONTIN UED IN THE CIRCUMSTANCES SPECIFIED IN THAT SECTION, AND, THEREAFTER, AT ANY TIME BEFORE THE EXPIRY OF THE PERIOD OF THREE YEARS REFERRED TO IN THAT SECTION, SUCH BUSINESS IS RE - ESTABLISHED, RECONSTRUCTED OR REVIVED BY THE ASSESSEE, SO MUCH OF THE LOSS AS I S ATTRIBUTABLE TO SUCH BUSINESS SHALL BE CARRIED FORWARD TO THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE BUSINESS IS SO RE - ESTABLISHED, RECONSTRUCTED OR REVIVED, AND - ( A ) IT SHALL BE SET OFF AGAINST THE PROFITS AND GAINS, IF ANY, OF THAT BUSINESS OR ANY OTHER BUSINESS CARRIED ON BY HIM AND ASSESSABLE FOR THAT ASSESSMENT YEAR ; AND ( B ) IF THE LOSS CANNOT BE WHOLLY SO SET OFF, THE AMOUNT OF LOSS NOT SO SET OFF SHALL, IN CASE THE BUSINESS SO RE - ESTABLISHED, RECONSTRUCTED OR REVIVED CONTINUES TO BE CARRIED ON BY THE ASSESSEE, BE CARRIED FORWARD TO THE FOLLOWING ASSESSMENT YEAR AND SO ON FOR SEVEN ASSESSMENT YEARS IMMEDIATELY SUCCEEDING.' 26. IN FACT, THE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN UNILEVER LTD. V. DY. CIT [2010] 325 ITR 102/191 TAXMAN 119 (BOM) INTERPRETING SECTION 10B AS AM ENDED HELD AS UNDER (PAGE 117) : ' . . . SECTION 10B AS IT STANDS IS NOT A PROVISION IN THE NATURE OF AN EXEMPTION BUT PR OVIDES FOR A DEDUCTION. SECTION 10B WAS SUBSTITUTED BY THE FINANCE ACT OF 2000 WITH EFFECT FROM APRIL 1, 2001. PRIOR TO THE SUBSTITUTION OF THE PROVISION, THE EARLIER PROVISION STIPULATED THAT ANY PROFITS AND GAINS DERIVED BY AN ASSESSEE FROM A 100 PER CEN T. EXPORT ORIENTED UNDERTAKING, TO WHICH THE SECTION APPLIES 'SHALL NOT BE INCLUDED IN THE TOTAL INCOME OF THE ITA NO . 1460 /BANG/201 5 PAGE 8 OF 9 ASSESSEE'. THE PROVISION, THEREFORE, AS IT EARLIER STOOD WAS IN THE NATURE OF AN EXEMPTION. AFTER THE SUBSTITUTION OF SECTION 10B BY THE FINANCE ACT OF 2000, THE PROVISION AS IT NOW STANDS PROVIDES FOR A DEDUCTION OF SUCH PROFITS AND GAINS AS ARE DERIVED BY A 100 PER CENT. EXPORT ORIENTED UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE FOR TEN CONSECUTIVE ASSESSMENT YEARS BEG INNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE. CONSEQUENTLY, IT IS EVIDENT THAT THE BASIS ON WHICH THE ASSESSMENT HAS SOUGHT TO BE REOPENED IS BELIED BY A PLAIN READING OF THE PROVIS ION. THE ASSESSING OFFICER WAS PLAINLY IN ERROR IN PROCEEDING ON THE BASIS THAT BECAUSE THE INCOME IS EXEMPTED, THE LOSS WAS NOT ALLOWABLE. ALL THE FOUR UNITS OF THE ASSESSEE WERE ELIGIBLE UNDER SECTION 10B. THREE UNITS HAD RETURNED A PROFIT DURING THE COU RSE OF THE ASSESSMENT YEAR, WHILE THE CRAB STICK UNIT HAD RETURNED A LOSS. THE ASSESSEE WAS ENTITLED TO A DEDUCTION IN RESPECT OF THE PROFITS OF THE THREE ELIGIBLE UNITS WHILE THE LOSS SUSTAINED BY THE FOURTH UNIT COULD BE SET OFF AGAINST THE NORMAL BUSINE SS INCOME. IN THESE CIRCUMSTANCES, THE BASIS ON WHICH THE ASSESSMENT IS SOUGHT TO BE REOPENED IS CONTRARY TO THE PLAIN LANGUAGE OF SECTION 10B.' 27. THE AFORESAID PRINCIPLE EQUALLY APPLIES TO A CASE FALLING UNDER SECTION 10A OF THE ACT. THEREFORE, IN THE LIGHT OF THE JURISDICTIONAL HIGH COURT JUDGMENT, THE ASSESSEE - COMPANY S CLAIM IS JUSTIFIED. THEREFORE, THE AO HAS NO REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT ON THIS GROUND. HENCE, WE HAVE NO HESITATION TO QUASH THE RE - ASSESSMENT PROCEEDINGS INIT IATED BY THE AO. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2016 SD/ - SD/ - (ASHA VIJAYARAGHAVAN) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE : B ANGALORE D A T E D : 30 /0 6 /2016 SRINIVASULU, SPS ITA NO . 1460 /BANG/201 5 PAGE 9 OF 9 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A) - II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE