Income-tax Officer, Pune V. M/s. Netscout Systems India Pvt. Ltd., Pune

ITA 1634/PUN/2011

• Counselvise Citation: 163424514 RSA 2011
• Duration Of Justice: 1 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS M S VERMA
• Assessee Lawyers: NITESH MEHTA
• Section: 143(3); 10B; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.1634/PN/2011 (ASSESSMENT YEAR : 2008-09) INCOME TAX OFFICER, WARD 2(3), PUNE. . APPELLANT VS. M/S NETSCOUT SYSTEM INDIA PVT. LTD., CTS NO. 911, 1 ST , 2 ND , 3 RD FLOOR, AMAR CALIBER, BMCC ROAD, BHAMBURDA, SHIVAJI NAGAR, PUNE 411 004. PAN : AABCN2736Q . RESPONDENT DEPARTMENT BY : MRS. M. S. VERMA ASSESSEE BY : MR. NITESH MEHTA DATE OF HEARING : 20-11-2013 DATE OF PRONOUNCEMENT : 21-11-2013 ORDER PER G. S. PANNU, AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 05-09-2011 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30-12-2010 PAS SED BY THE ASSESSING OFFICER, U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESSMENT YEAR 2008-09. 2. IN THIS APPEAL, ALTHOUGH THE REVENUE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT THE SOLITARY ISSUE IS WITH REGARD TO THE ASSESSEES CLAIM FROM DEDUCTION U/S 10B OF THE ACT AMOUNTING TO RS.1,23,3 0,780/- WITH RESPECT TO THE PROFITS DERIVED AN EXPORT ORIENTED UNIT (EOU). THE ASSESSING OFFICER DENIED THE CLAIM OF DEDUCTION FOR IDENTICAL REASONS ADOPTE D BY HIM IN DENYING THE SIMILAR CLAIM FOR DEDUCTION U/S 10B OF THE ACT FOR THE PRECEDING ASSESSMENT YEAR OF 2006-07. THE PRIMARY REASON ADVANCED BY TH E ASSESSING OFFICER WAS THAT THE ASSESSEE COMPANY WAS INCORPORATED IN 2000 AND IT CLAIMED DEDUCTION ITA NO.1634/PN/2011 A.Y. 2008-09 U/S 80HHE OF THE ACT UPTO ASSESSMENT YEAR 2003-04 W ITH RESPECT TO THE PROFITS DERIVED FROM EXPORT OF SOFTWARE. SUBSEQUENTLY, ON 1 6-07-2002, IT RECEIVED APPROVALS FROM THE SOFTWARE TECHNOLOGY PARK INDIA ( STPI) FOR THE SAID UNDERTAKING TO OPERATE AS 100% EXPORT ORIENTED UNIT W.E.F. 23-08-2002. THEREAFTER, ASSESSEE STARTED CLAIMING DEDUCTION U/S 10A/10B OF THE ACT AND FOR THE YEAR UNDER CONSIDERATION IT CLAIMED DEDUCTI ON U/S 10B OF THE ACT. THE CLAIM HAS BEEN DENIED ON THE GROUND THAT THE UNIT O F THE ASSESSEE WAS NOT A NEWLY ESTABLISHED UNDERTAKING AND THUS, IT WAS NO T ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 10B OF THE ACT. THE ASSESSING OFFICE R HAS REFERRED TO THE PROVISIONS OF SECTION 80HHE(5) OF THE ACT TO SAY TH AT ONCE DEDUCTION U/S 80HHE OF THE ACT HAS BEEN CLAIMED, THE SAME UNI T WOULD NOT BE ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 10A/10B OF THE ACT. THE AFORESAID REASON IS COMMON TO THE EARLIER ASSESSMENT YEARS WHEREIN THE CLAIM OF THE ASSESSEE U/S 10A/10B OF THE ACT HAS BEEN DENIED BY THE ASSES SING OFFICER. 3. THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE NOTICING THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSE SSMENT YEARS 2004-05 AND 2005-06 DATED 30-09-2010 VIDE ITA NOS. 535 & 536/PN /2009, WHEREIN THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 10A/10B OF THE ACT HAS BEEN UPHELD. 4. AT THE TIME OF HEARING BEFORE US, APART FROM THE PRECEDENTS BY WAY OF THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004-05 AND 2005-06 DATED 30-09-2010 (SUPRA), ASSES SEE ALSO FURNISHED COPY OF THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YE AR 2006-07 VIDE ITA NO.209/PN/2011 DATED 31-07-2012, WHEREBY THE SI MILAR CLAIM HAS BEEN ALLOWED. 5. IN THE PRESENT YEAR, THE CLAIM OF THE ASSESSEE I S IN TERMS OF SECTION 10B OF THE ACT. INITIALLY THE ELIGIBLE UNIT OF THE ASSE SSEE WAS NOT REGISTERED WITH STPI AS 100% EOU AND THEREFORE UPTO ASSESSMENT YEAR 2003-04 IT CLAIMED ITA NO.1634/PN/2011 A.Y. 2008-09 DEDUCTION U/S 80HHE OF THE ACT WITH RESPECT TO THE PROFITS DERIVED FROM EXPORT OF SOFTWARE. IT RECEIVED APPROVAL FROM STPI ON 16-0 7-2002 TO OPERATE AS 100% EOU W.E.F. 23-08-2002 AND THEREAFTER, ASSESSEE STARTED CLAIMING DEDUCTION U/S 10A OR 10B OF THE ACT, AS THE CASE MA Y BE. HOWEVER, FOR THE YEAR UNDER CONSIDERATION, ASSESSEE HAS CLAIMED DEDU CTION U/S 10B OF THE ACT, AS WAS THE POSITION IN ASSESSMENT YEAR 2006-07 ALSO . NOTABLY, THE CIT(A) IN THE PRESENT CASE, HAS REFERRED TO THE CBDT CIRCULAR NO. 1/2005 DATED 06-01-2005 IN TERMS OF WHICH IT IS CLEAR THAT ON OB TAINING OF APPROVAL UNDER STPI AS 100% EOU BY AN UNDERTAKING SET-UP IN THE DO MESTIC TARIFF AREA AND BEING ENGAGED IN EXPORT OF SOFTWARE, SUCH UNIT SHAL L BE ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT FOR THE UNEXPIRED PERIOD OF THE 10 CONSECUTIVE ASSESSMENT YEARS. AS THE ASSESSEE HAD RECEIVED THE STPI APPRO VAL TO OPERATE AS 100% EOU IN FINANCIAL YEAR ENDING ON 31-03-2003, IT WAS ELIGIBLE FOR THE DEDUCTION U/S 10B OF THE ACT WITH EFFECT FROM THE RELEVANT AS SESSMENT YEAR FOR THE BALANCE PERIOD REMAINING OUT OF THE 10 YEARS PERIO D I.E. AFTER EXCLUDING THE ASSESSMENT YEAR IN WHICH ASSESSEE HAD BEEN ALLOWED DEDUCTION U/S 80HHE/10A OF THE ACT. 6. AFTER HAVING HEARD THE LEARNED DEPARTMENTAL REPR ESENTATIVE WITH RESPECT TO THE CAPTIONED APPEAL, WE FIND NO REASONS TO DEPART FROM THE CONCLUSION DRAWN BY THE CIT(A) WHICH IS NOT ONLY IN TUNE WITH THE PRECEDENTS IN THE ASSESSEES OWN CASE BUT IS ALSO IN CONFIRMIT Y WITH THE CBDT CIRCULAR NO. 1/2005 (SUPRA). IT WAS ALSO A COMMON POINT BETW EEN THE PARTIES THAT SO FAR AS THE PRECEDENTS BY WAY OF THE ORDERS OF THE TRIBU NAL IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS ARE CONCERNED, THE Y CONTINUE TO HOLD THE FIELD AND HAVE NOT BEEN ALTERED BY ANY HIGHER AUTHORITY. 7. FOR ALL THE ABOVE REASONS, WE AFFIRM THE ORDER O F THE CIT(A) AND THE APPEAL OF THE REVENUE IS ACCORDINGLY DISMISSED. ITA NO.1634/PN/2011 A.Y. 2008-09 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST NOVEMBER, 2013. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 21 ST NOVEMBER, 2013 SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR, A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE