ACIT, CHENNAI V. VTIGER Systems India Private Limited, CHENNAI

ITA 1635/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7114 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 10-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C V PAVANA KUMAR IRS
• Assessee Lawyers: R VENKATARAMANI
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . , . . ! , '# BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER& SHRI S.S. GODARA, JUDICIAL MEMBER ./ I.T.A. NO.1635/MDS/2014 ( / ASSESSMENT YEAR : 2008-2009) THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE III(4) CHENNAI. ( $% /APPELLANT) VS M/S. VTIGER SYSTEMS INDIA PVT. LIMITED, NO.40-41-42, FLAT NO. D-II, SIVASUNDAR APARTMENTS, SHASTRI NAGAR, VELACHERY, CHENNAI 600 042. [PAN :AACCV0297K] ( &'$% /RESPONDENT) / APPELLANT BY : SHRI. C.V. PAVANA KUMAR, IRS, JCIT. / RESPONDENT BY : SHRI. R. VENKATARAMANI, C.A. /DATE OF HEARING : 26.08.2014. /DATE OF PRONOUNCEMENT : 27.08.2014. ( / O R D E R PER S.S.GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL FOR ASSESSMENT YEAR 2008-09; EMANATES FROM ORDER DATED 28.02.2014 PASSED BY THE COMMISSIO NER OF INCOME I.T.A.NO.1635/MDS/2014. . :- 2 -: TAX (APPEALS)-III, CHENNAI IN ITA NO.1117/2013-14 I N PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961 [IN SHORT THE ACT]. 2. THE REVENUES SOLE SUBSTANTIVE GROUND IN THE PRESEN T CASE CHALLENGES THE CIT(A) ORDER ALLOWING SECTION 10A DE DUCTION ON ENHANCED PROFITS CONSEQUENT TO SECTION 40(A)(IA) DI SALLOWANCE OF G26,57,636/-. FACTS OF THE CASE ARE IN A VERY NARR OW COMPASS. THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND EXPORT. IT HAD FILED ITS RETURN ON 30.09.2008 DECLARING LOSS OF RS.17,56,759/-. THE SAME WAS SU MMARILY PROCESSED. THEREAFTER, THE ASSESSING OFFICER FRAME D A REGULAR ASSESSMENT ON 30.11.2010 DISALLOWING EXPORT COMMISS ION PAYMENTS OF G.26,57,603/- FOR NON DEDUCTION OF TDS. 3. IN ASSESSEES APPEAL, THE CIT(A) HAS AFFIRMED THE IMPUGNED DISALLOWANCE. HOWEVER, HE HAS AGREED TO ALTERNATIV E PLEA THAT THIS DISALLOWANCE WOULD ONLY ENHANCE PROFITS OTHERWISE E NTITLED FOR SECTION 10A DEDUCTION AS PER CASE LAW CIT VS. M/S. GEM PLU S JEWELLERY INDIA LTD (2010- TIOL-456-HC-MUM-IT). THEREFORE, THE REVENUE IS IN APPEAL. 4. WE HAVE HEARD BOTH PARTIES AND PERUSED THE CAS E FILE. THE I.T.A.NO.1635/MDS/2014. . :- 3 -: REVENUE DOES NOT POINT OUT ANY DISTINCTION ON FACTS IN THE PRESENT CASE VIS-A-VIS CLAUSE INVOLVED BEFORE THE HONBLE HIGH C OURT (SUPRA). IT ONLY PLEADS THAT ITS SPECIAL LEAVE PETITION IS PENDING B EFORE THE HONBLE SUPREME COURT OF INDIA. IN OUR VIEW, THIS CONTENTIO N ONLY DOES NOT FORM A VALID GROUND TO ADOPT A DIFFERENT APPROACH I N THE INSTANT CASE. THE HONBLE HIGH COURT HAS SETTLED THE LAW THAT IN CASE OF A SECTION 10A UNDERTAKING, A DISALLOWANCE ONLY GIVES RISE TO ENHA NCED PROFITS/ INCOME OTHERWISE ENTITLED FOR DEDUCTION . THE CIT(A )S ORDER IS UPHELD. 5. THE REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 27TH OF AUGUST, 2014, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( . . ! ) (S.S. GODARA) ' / JUDICIAL MEMBER !' /DATED:27.08.2014. K.V '# $% &% /COPY TO: 1. ' APPELLANT 2. / RESPONDENT 3. ( ( )/CIT(A) 4. ( /CIT 5. %)* + /DR 6. *, - /GF. I.T.A.NO.1635/MDS/2014. . :- 4 -: