DCIT, CHENNAI V. M/s. Summit Technologies Pvt. Ltd., CHENNAI

ITA 2118/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8242 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 13-07-2016
• Court: TRIBUNAL
• Department Lawyers: SHIVA SRINIVAS
• Section: 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : CHENNAI . . . , . . ' #$ , % &' ( [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D. S. SUNDER SINGH, ACCOUNTANT MEMBER ] ./ I.T.A.NO.2118/MDS/2016 / ASSESSMENT YEAR : 2011-12 THE DY. COMMISSIONER OF INCOME TAX CORPORATE CIRCLE 6(2) CHENNAI VS. M/S SUMMIT TECHNOLOGIES PVT. LTD. NO.98/A, DR. R.K. SALAI, 3 RD FLOOR AURAS CORPORATE CENTRE CHENNAI 600 004 [PAN AAECS 9249 J ] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : SHRI SHIVA SRINIVAS, JCIT /RESPONDENT BY : SHRI SAROJ KUMAR PARIDA , ADVOCATE / DATE OF HEARING : 28 - 09 - 2016 ! / DATE OF PRONOUNCEMENT : 26 - 10 - 2016 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-15, CHENN AI, DATED 28.3.2016 FOR ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET, IT WAS NOTICED THAT THERE WAS A DELA Y OF 11 DAYS IN FILING THE APPEAL BY THE REVENUE. THE ACIT FILED A PETITION FOR CONDONATION DELAY. WE HAVE HEARD THE LD. DR AND TH E LD. AR AND FIND ITA NO. 2118/16 :- 2 -: THAT THERE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL WITHIN THE STIPULATED TIME. THEREFORE, WE CONDONE THE DELAY A ND ADMIT THE APPEAL. 3. ALL THE GROUNDS OF APPEAL ARE RELATED TO ALTERNATE CLAIM MADE BY THE ASSESSEE U/S 10A OF THE INCOME-TAX ACT, 19 61(IN SHORT THE ACT). 4. THE ASSESSEE FILED THE RETURN OF INCOME ADMITTING TOTAL INCOME `50,67,394/- AND CLAIMED DEDUCTION U/S 10B OF THE ACT AMOUNTING TO ` 77,20,735/-. THE ASSESSING OFFICER DISALLOWED THE DEDUCTION U/S 10B SINCE THE ASSESSEE HAS NOT SUBM ITTED THE RATIFICATION OF THE APPROVAL OF DEVELOPMENT COMMIS SIONER BY THE BOARD OF APPROVAL AS REQUIRED U/S 10B EXPLANATION 2(IV) OF INCOME TAX ACT. THEREFORE THE ASSESSING OFFICER HELD THAT THE ASSESSEE-COMPANY IS NOT ELIGIBLE FOR DEDUCTION U/S 10B OF THE ACT, UNLESS THE ASSESSEE- COMPANY SUBMITS THE RATIFICATION OF THE APPROVAL O F DEVELOPMENT COMMISSIONER BY THE BOARD OF APPROVAL. THE ASSESSI NG OFFICER ALSO RELIED ON THE CBDT INSTRUCTION NO.2 OF 2009 DATED 9.3.2009 AND DISALLOWED THE CLAIM MADE U/S 10B OF THE ACT. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) THE ASSESSEE MADE AN ALTERNATE CLAIM FOR DEDUCTION U/S 10A OF THE ACT. ITA NO. 2118/16 :- 3 -: THE CIT(A) ALLOWED THE ALTERNATE CLAIM OF THE ASSE SSEE. WHILE ALLOWING THE ALTERNATE CLAIM, THE CIT(A) HAS RELIED ON THE FOLLOWING DECISIONS: 1. CIT VS HEARTLAND KG INFORMATION LTD, 359 ITR 1 2. CIT VS TECHNOVATE E SOLUTIONS PVT. LTD, 354 ITR 110 3. CIT(A) ORDER IN THE CASE OF CONGRUENT SOLUTIONS P. LTD IN I.T.A.NO. 613/13-14 4. CIT VS GEM PLUS JEWELLERY LTD, 330 ITR 175(BOM) 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENUE I S IN APPEAL BEFORE THE TRIBUNAL. 7. THE LD. DR ARGUED THAT THE CIT(A) SHOULD NOT HAVE CONSIDERED THE ALTERNATE CLAIM OF THE ASSESSEE U/ S 10A OF THE ACT AND FACTS IN THE CASE OF M/S HEARTLAND KG INFORMATION LTD (SUPRA) IS DISTINGUISHABLE FROM THAT OF THE ASSESSEES CASE. FURTHER THE D.R SUBMITTED THAT DEDUCTIONS U/S 10B AND 10A ARE ALLOW ED IN DIFFERENT SITUATIONS SUBJECT TO SATISFACTORY COMPLIANCE THE T ERMS AND CONDITIONS IN THE RESPECTIVE SECTIONS OF THE ACT. IT IS NOT ME RE SUBMISSION OF THE AUDIT REPORT AND THE QUANTUM OF DEDUCTION. THEREF ORE, THE LD. DR ARGUED THAT CIT(A) SHOULD HAVE GIVEN AN OPPORTUNITY TO THE A.O BEFORE ALLOWING THE DEDUCTION. ON THE OTHER HAND, THE LD. AR RELIED ON THE ORDERS OF THE CIT(A) AND THE DECISIONS RELIED UPON BY THE CIT(A). ITA NO. 2118/16 :- 4 -: 8. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL PLACED BEFORE US. THE ASSESSEE CLAIMED DEDUCTION U/S 10B BUT COULD NOT FURNISH THE RATIFICATION OF THE APPROVAL OF DEV ELOPMENT COMMISSIONER BY THE BOARD OF APPROVAL. THEREFORE, THE ASSESSING OFFICER HAS REJECTED THE CLAIM OF THE ASSESSEE U/ S 10B OF THE ACT. THE ASSESSEE IS A STPI UNIT WHICH IS ELIGIBLE FOR DEDUCTION U/S 10A ALTERNATIVELY. HOWEVER, FOR CLAIMING DEDUCTION U/ S 10A, THE ASSESSEE IS REQUIRED TO SATISFY THE CONDITIONS LAID DOWN IN SEC. 10A IN RESPECT OF AUDIT REPORT, QUANTUM OF DEDUCTION AND OTHER CONDIT IONS AS SPECIFIED IN SEC. 10A. IF THE ASSESSEE IS ELIGIBLE FOR DEDUCTI ON U/S 10A AND MADE ALTERNATE CLAIM DURING THE APPELLATE PROCEEDINGS, T HE APPELLATE AUTHORITY HAS TO CONSIDER THE CLAIM OF THE ASSESSE E, AS RELIED UPON BY THE CIT(A) IN THE CASE OF PRITHVI BROKERS & SHAREHO LDERS P. LTD, 349 ITR 336(BOM). THEREFORE, WE ARE IN AGREEMENT WITH T HE ORDER OF THE CIT(A) FOR ENTERTAINING THE ALTERNATE CLAIM. HOWEV ER, WE AGREE WITH THE LD. DR THAT THE DEDUCTIONS IN RESPECT OF 10A A ND 10B ARE ALLOWABLE IN DIFFERENT SITUATIONS ON THE DIFFERENT FACTS AND CIRCUMSTANCES. THE CIT(A) HAS NOT GIVEN ANY FINDING WHETHER THE ASSES SEE HAS SATISFIED THE CONDITIONS LAID DOWN IN SECTION 10A OF THE ACT FOR THE RELEVANT ASSESSMENT YEAR. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO CONSIDER THE ALTERNATE CLAIM OF THE ASSESSEE U/S 10A OF TH E ACT, ON MERITS. ITA NO. 2118/16 :- 5 -: 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER, 2016, AT CHENNAI. SD/- SD/- ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( . . ' #$ ) (D.S. SUNDER SINGH) % / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 26 TH OCTOBER, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 3. +,' / CIT(A) 5. )-. / / DR 2. / RESPONDENT 4. + / CIT 6. .01 / GF