Income Tax Officer Ward-1(4), Nagpur V. M/s. Reena Arun Saxena, Nagpur

ITA 152/NAG/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3092 (ITAT-NAGPUR)
• Duration Of Justice: 7 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D P T IWARI; SHARDHA NICHAL
• Assessee Lawyers: M MANI
• Keywords: Depreciation; Set aside
• Section: 143(3); 10B; 263

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M ITA NO. 1 5 0 / N AG / 20 1 1 ( ASSESSMENT YEAR : 200 5 - 0 6 ) ACIT,CIRCLE - 1, NAGPUR - 4401 006 VS. SHRI YESHWANT KANETKAR, 44A,GOKULPETH, NAGPUR - 440 010 . PAN/GIR NO. : A COPK 7308 K ( APPELLANT ) .. ( RESPONDENT ) AND ITA NO. 1 52 / NAG /20 1 1 ( ASSESSMENT YEAR : 200 8 - 0 9 ) ITO, WARD - 1(4), NAGPUR - 440 00 6 VS. SMT. REENA ARUN SAXENA , 11/2, INFOTECH PARK, NEAR VRC TELEPHONE EXCHANGE, PARSODI, SOUTH AMBAZARI ROAD, NAGPUR - 440 022 PAN/GIR NO. : A ETPS 6959 K ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : SMT. SHARDHA NICHAL & D.P.TIWARI /ASSESSEE BY : MR. M. MANI DATE OF HEARING : 29 TH JAN ., 201 3 DATE OF PRONOUNCEMENT : 6 TH FEB. ,201 3 O R D E R P ER SHRI R.K.G UPTA, JM : TH E SE TWO APPEALS HAVE BEEN PREFERRED BY THE DEPARTMENT BEFORE THE ITAT NAGPUR BENCH, NAGPUR, AGAINST THE ORDER OF LEANED CIT (A) - I , NAGPUR (MAHARASHTRA) RELATING TO THE ASSESSMENT YEAR 2005 - 06 & 200 8 - 0 9 , WHICH HAVE BEEN HEARD THROUGH E - COURT, MUMBAI . ITA NO S . 150 & 152 /20 1 1 2 2 . IN THE AFORESAID APPEALS THE DEPARTMENT RAISED OBJECTION IN REGARD TO GRANTING RELIEF UNDER SECTION 10A OF THE ACT. 3 . SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE , BOTH THESE CASES HAVE BEEN HEARD AND DISPOSED OF BY THIS CONSOLIDATED ORDER TOGETHER. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS COMPLETED ORIGINALLY ON 21 - 11 - 2007 UNDER SECTION 143(3) . THEREAFTER PROCEEDING S UNDER SECTION 263 OF THE ACT WERE INITIATED BY THE CIT - I, WHO AFTER EXAMINING THE RECORD FOUND THAT DEDUCTION UNDER SECTION 10B/10A WAS ALLOWED WRONGLY. ACCORDINGLY, THE ORDER OF THE AO WAS SET ASIDE A ND THE AO WAS DIRECTED TO EXAMINE THE CLAIM OF THE EXPENDITURE AGAINST INCOME FROM ROYALTY AND THEN ALLOWABILITY OF DEDUCTION UNDER SECTION 10A. THEREAFTER THE ASSESSMENT UNDER SECTION 143(3) R.W.S.263 WAS COMPLETED AND CLAIM OF DEDUCTION UNDER SECTION 10A WAS DISALLOWED BY OBSERVING THAT THE ASSESSEE SHOULD HAVE FILED REVISE RETURN FOR GRANTING SUCH DEDUCTION AS NO DEDUCTION WAS CLAIMED ORIGINALLY. THE AO RELIED ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF GOETZ (INDIA) LTD., REPORTED IN 28 4 ITR 323 (SC) . THE AO HAS ALSO OBSERVED IN HIS ORDER THAT THE ASSESSEE HAS RECEIVED ROYALTY INCOME OF RS. 38,91,671/ - AND EXPENSES AGAINST THIS WHICH HAS BEEN CLAIMED ARE INADMISSIBLE UNDER SECTION 37. ACCORDING TO THE AO, THE ASSESSEE IS RECEIVING ROYALTY ON THE BASIS OF TECHNICAL QUALIFICATION AND EXPERTISE. THE R EFORE, THERE IS NO DEMONSTRATED NEED FOR MAINTAINING TECHNICAL SKILLED STAFF OR TAKING HELP OF CONSULTANTS. ACCORDING TO THE AO, ALL THE ITA NO S . 150 & 152 /20 1 1 3 DATA REQUIRED ARE AVAILABLE ONLINE WHICH CAN BE EASILY ACCE SSED FOR THE PURPOSE OF UPDATING HIS BOOKS. THEREFORE, EXPENSES ON ACCOUNT OF REPAIR AND MAINTENANCE SALARY AND WAGES, DEPRECIATION AND INTEREST ON LOAN AMOUNTING TO RS.17,72,142/ - WERE DISALLOWED . 5 . THE ASSESSEE PREFERRED APPEAL BEFORE THE L EARNED CIT( A) . DETAIL ARGUMENTS WERE ADVANCED. RELIANCE WAS PLACED ON THE DECISION OF NAGPUR BENCH OF THIS TRIBUNAL PASSED IN ITA NO. 176/NAG/2009, VIDE ORDER DATED 13 - 8 - 2009 IN THE CASE OF INFOSPECTRUM PVT. LTD ., WHERE THE SIMILAR FACTS WERE INVOLVED. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, FOUND THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A. LEARNED CIT(A) FOUND THAT SIMILAR FACTS WERE INVOLVED IN THE CASE OF INFOSPECTRUM PVT. LTD .(SUPRA) , WHERE THE TRIBU NAL HAS DIRECTED TO ALLOW DEDUCTION UNDER SECTION 10A. LEARNED CIT(A) HAS OBSERVED THAT THE MAIN CONTENTION OF THE AO WHILE REJECTING THE CLAIM OF THE ASSESSEE WAS MADE UNDER SECTION 10B AND NOT UNDER SECTION 10A. THE LEARNED CIT(A) OBSERVED THAT THIS IS A TECHNICAL MISTAKE AND ALL OTHER CONTENTIONS WERE SATISFYING FOR CLAIM OF DEDUCTION UNDER SECTION 10A. THE CIT(A) HAS NOTED THAT THE ASSESSEE HAS FILED REPORT IN FORM NO. 56G INSTEAD OF FORM NO.56F, THEREFORE, DEDUCTIONS WERE DISALLOWED. THE CIT(A) NOTED T HAT THE ASSESSEE HAS FILED RETURN ENCLOSING FORM NO.56G AND CONTENTS WERE EXACTLY THE SAME AS IN FORM NO. 56F. A CERTIFICATE CERTIFYING THIS FACT WAS ALSO FILED. ACCORDINGLY, THE CIT(A) NOTED THAT THE DEDUCTION UNDER SECTION 10A WAS WRONGLY DISALLOWED BY TH E AO. SIMILAR FACTS WERE ITA NO S . 150 & 152 /20 1 1 4 INVOLVED IN THE CASE OF INFOSPECTRUM PVT. LTD . (SUPRA) , THEREFORE, FOLLOWING THE RATIO OF THE DECISION AND CONSIDERING THE CLAIM OF THE ASSESSEE WAS CORRECT AS THE ASSESSEE HAS FILED ALL THE REQUISITE DETAILS FOR CLAIMING DEDUCTION UNDER SECTION 10A. ACCORDINGLY, HE ALLOWED THE DEDUCTION. OTHER GROUNDS OF THE ASSESSEE WERE ALSO ALLOWED BY THE CIT(A) . 6 . NOW, THE DEPARTMENT IS IN APPEAL S HERE BEFORE THE TRIBUNAL AGAINST THE DIRECTION OF THE LEARNED CIT(A) IN GRANTING RELIEF UNDER S ECTION 10A. 7 . LEARNED DR PLACED RELIANCE ON THE ORDER OF THE AO. ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE ORDER OF THE LEARNED CIT(A) . 8 . AFTER CONSIDERING THE ORDER OF THE LEARNED CIT(A) , WE FOUND NO INFIRMITY IN THE F INDING OF THE CIT(A) . WE NOTED THAT LEARNED CIT(A) HAS ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION IN THE CASE OF INFOSPECTRUM PVT. LTD . (SUPRA) , WHERE THE SIMILAR FACTS WERE INVOLVED. THE MAIN REASON FOR DENIAL OF DEDUCTION UNDER SEC TION 10A WAS THAT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10B INSTEAD OF UNDER SECTION 10A. THE PROVISIONS OF SECTIONS 10A AND 10B ARE SIMILAR. THE FORMATS OF FORM NO. 56F & 56G ARE SAME, THEREFORE, THIS WAS A TECHNICAL DEFECT, IF ANY AND ONLY ON ACCOU NT OF TECHNICALITY AND VENIAL DEFECT, THE BENEFIT ALLOWABLE TO THE ASSESSEE SHOULD NOT HAVE DISALLOWED BY THE AO. THIS VIEW OF OURS FIND FURTHER SUPPORT FROM THE ITA NO S . 150 & 152 /20 1 1 5 DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL, REPORTED IN 135 TAXMAN 4 61 . 9 . IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE FACT THAT ON SIMILAR ISSUE THE TRIBUNAL ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE WHICH HAS BEEN FOLLOWED BY THE LEARNED CIT(A) , WE CONFIRM THE ORDER OF THE LEARNED CIT(A) IN THE APPEALS OF BOTH THE ASSESSEES. 10 . IN THE RESULT , APPEAL S OF THE DEPARTMENT ARE DISMISSED . ORDER PRONOUNCED IN THE E - COURT ON THIS 6 TH DAY OF FEB , 201 3 . - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 06 / 02 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI