ITO, CHENNAI V. Hella Engineering P. Ltd., CHENNAI

ITA 1705/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9280 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 23-05-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 23-07-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLIJ
• Assessee Lawyers: R VIJAYARAGHAVAN

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , ! ' ! # . $% & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1705/MDS./2015 / ASSESSMENT YEAR :2010-11 THE INCOME TAX OFFICER, CORPORATE WARD-2(3), ROOM NO.514,5 TH FLOOR, CHENNAI-34. VS. M/S.HELLA ENGINEERING P. LTD., C-28 TO C-35,CENTRAL SQUARE-1, CIPET ROAD, THRU-VI-KA INDSL. ESTATE, CHENNAI 600012. [PAN AAACF 5982 B ] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : MR.A.B.KOLI,JCIT,DR /RESPONDENT BY : MR.R.VIJAYARAGHAVAN,ADVOCATE / DATE OF HEARING : 23 - 0 5 - 201 6 / DATE OF PRONOUNCEMENT : 25 - 05 - 2016 - / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-6, CHENNAI DAT ED 30.01.2015 PERTAINING TO ASSESSMENT YEAR 2010-11. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS. ITA NO.1705/MDS./2015 :- 2 -: 2.1. THE LD.CIT(A) OUGHT NOT TO HAVE ALLOWED THE A SSESSEES CLAIM OF DEDUCTION U/S.10A. 2.2 THE LD.CIT(A) ERRED IN ALLOWING THE APPEAL OF T HE ASSESSEE WHEN THE APPROVAL OBTAINED FROM STPI WAS NOT IN THE NAME OF THE ASSESSEE COMPANY VIZ. HELLA ENGINEERING P. LTD. , BUT IN THE NAME OF M/S.FTZ ENGINEERING P. LTD. 2.3 THE LD.CIT(A) OUGHT NOT TO HAVE APPRECIATED TH AT THE ASSESSEE, EVEN IF ASSUMING TO HAVE OBTAINED APPROVA L FROM STPI HAD NOT MANUFACTURED COMPUTER SOFTWARE BUT HAD RENDERED ENGINEERING SERVICES AS EVIDENT FROM FORM 3CEB. 2.4 THE LD.CIT(A) OUGHT NOT TO HAVE APPRECIATED THA T THE ASSESSEES ENTIRE RECEIPTS FROM THE ASSOCIATED ENTE RPRISES GROSSLY AMOUNTING TO RS.10,50,81,508/- ARE FOR THE ENGINEERING SERVICES PROVIDED, WHICH IS NOT A MANUFACTURING ACT IVITY ELIGIBLE FOR CLAIMING DEDUCTION U/S.10A OF THE ACT. 3. THE MAIN GROUND OF THE APPEAL IS REGARDING THE DISALLOWANCE OF DEDUCTION OF ` 2,69,17,327/- CLAIMED U/S.10A OF THE ACT. THE ASSE SSEE IS A 100% EXPORT ORIENTED UNIT (EOU), LOCATED IN ST PI AND ALSO APPROVED BY THE STPI. HENCE, THE ASSESSEE CLAIMED A DEDUCTION U/S.10A OF THE ACT. THE AO OBSERVED IN THE ASSESSM ENT ORDER THAT THE ASSESSEES UNIT WAS REGISTERED WITH THE STPI ON 30. 08.2002. THAT IS, THE ASSESSEES UNIT HAS STARTED MANUFACTURING/PRODU CTION AFTER ITA NO.1705/MDS./2015 :- 3 -: 01.04.2001. THEREFORE,, THE AO OPINED THAT IN THE C ASES OF UNITS STARTED MANUFACTURING/PRODUCTION AFTER 01.04.2001, THE DEDUCTION U/S.10A IS AVAILABLE ONLY IF SUCH UNITS ARE IN SPEC IAL ECONOMIC ZONES (SEZ) AND ALSO APPROVED BY THE INTER-MINISTERIAL S TANDING COMMITTEE. SINCE THE ASSESSEES UNIT IS NEITHER LOCATED IN ANY SEZ NOR APPROVED BY THE INTER-MINISTERIAL STANDING COMMITTEE, THE AO DISALLOWED THE ASSESSEES CLAIM OF DEDUCTION U/S.10A OF THE ACT. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE THE LD.CIT(A). ON A PPEAL, THE LD.CIT(A) ALLOWED THE CLAIM OF ASSESSEE. AGAINST T HIS, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. THE MAIN REASON FOR REJECTION OF EXEMPTION U/S.10A OF THE ACT IS THAT THE ASSESSEE IS NOT RECOGNIZED BY SOFTWARE TECHNOLOGY PARKS OF INDIA (STPA) RATHER IT WAS APPROVED IN THE NAME OF M/S.FTZ ENGINEERING P. LTD. BEFORE US, LD.A.R FILED A COPY OF APPROVAL AND CHANGE OF NAME TO THE PRESENT NAME OF ASSESSEE BY S TPI VIDES THEIR LETTER NO.STPIC/G1014/2002-03 /672 DATED 30.08.2002 . AS SEEN FROM THE ORDER OF THE AO, THIS WAS NOT PLACED BEFORE THE AO. FURTHER, THERE IS OBJECTION BY THE DEPARTMENTAL REPRESENTATIVE THA T ASSESSEE IS RENDERING ONLY ENGINEERING SERVICES AND IT IS NOT M ANUFACTURING COMPUTER SOFTWARE. IN OUR OPINION, THIS IS TO BE E XAMINED BY AO AFTER ITA NO.1705/MDS./2015 :- 4 -: GIVING OPPORTUNITY TO THE ASSESSEE. ACCORDINGLY, T HE ISSUE IN DISPUTE IS REMITTED TO THE FILE OF AO FOR FRESH CONSIDERATION AND HE WOULD EXAMINE THE ISSUE WHETHER THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.10A OF THE ACT OR NOT. ACCORDINGLY, THIS ISSUE IS REMITTED TO THE FILE OF AO FOR FRESH CONSIDERATION. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MAY, 2016, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) & / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 25 TH MAY, 2016 K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 4. - 1 / CIT 2. / RESPONDENT 5. /23- 4 / DR 3. - 1-!' / CIT(A) 6. 3&-5 / GF