M/s Centum Electronics Limited , Bangalore V. Deputy Commissioner of Income Tax Circle-2(1)(1), Bangalore

ITA 2194/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0290 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-12-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 13-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Revised return; TDS
• Section: 40(a)(ia); 10B

Judgement Text

ITA NO.2194 /BANG/2018 M/S. CENTUM ELECTRONICS LTD., BENGALURU IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2194/BANG/2018 ASSESSMENT YEAR: 2008-09 M/S. CENTUM ELECTRONICS LTD. #44, GROUND FLOOR KHB INDUSTRIAL AREA YELAHANKA NEW TOWN BENGALURU-560 106. PAN NO : AAKCS7429L VS. ACIT CIRCLE-12(3), BENGALURU CURRENTLY ASSESSED BY DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2(1)(1) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMSUBRAMANIAN, A.R. RESPONDENT BY : SHRI KANNAN NARAYAN, D.R. DATE OF HEARING : 28.12.2020 DATE OF PRONOUNCEMENT : 28.12.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 21-03-2018 PASSED BY LD CIT(A)-6, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2008-09. 2. THE GROUNDS OF APPEAL URGED BY THE ASSESSEE READS AS UNDER:- 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCO ME TAX (APPEALS) IN SO FAR IT IS PREJUDICIAL TO THE INTERESTS OF THE APPEL LANT, IS BAD AND ERRONEOUS IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. ITA NO.2194 /BANG/2018 M/S. CENTUM ELECTRONICS LTD., BENGALURU PAGE 2 OF 5 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) OUGHT TO HAVE HELD THAT THE FREIGHT, TRAVELLING, SUB-CONTRACTING CHARG ES AND BANK CHARGES CANNOT BE EXCLUDED FROM THE EXPORT TURNOVER FOR ARR IVING AT EXEMPTION U/S. 10B OF THE ACT SINCE THEY ARE NEITHER INCURRED FOR DELIVERY OF ARTICLES, THINGS OR COMPUTER SOFTWARE NOR INCURRED IN FOREIGN CURREN CY. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE ADDITIONAL CLAIM OF TH E APPELLANT IS NOT ALLOWABLE JUST BECAUSE A REVISED RETURN WAS NOT FILED OR THE ASSESSMENT ORDER DOES NOT MENTION THE FACTS OF ADDITIONAL CLAIM. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) OUGHT TO HAVE ALLOWED THE ADDITIONAL CLAIM MADE BY THE APPELLANT IN RESPECT OF DEPRECIATION. 4.1.THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) OUGHT TO HAVE ALLOWED THE ADDITIONAL CLAIM MADE BY THE APPELLANT IN RESPECT OF WRONG DISALLOWANCE U/S. 40(A)(IA). 4.2.THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) OUGHT TO HAVE ALLOWED THE ADDITIONAL CLAIM MADE BY THE APPELLANT IN RESPECT OF EXTENSION OF DEDUCTION U/S. 10B. 4.3.THAT THE LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) OUGHT TO HAVE ALLOWED THE ADDITIONAL CLAIM MADE BY THE APPELLANT IN RESPECT OF EXCESS CREDIT OF TDS DURING THE ASSESSMENT PROCEEDINGS 3. THE LD A.R SUBMITTED THAT THE ASSESSEE IS AN 100% EOU AND IS ELIGIBLE FOR DEDUCTION U/S 10B OF THE INCOME-TAX AC T,1961 ['THE ACT' FOR SHORT]. 4. THE LD A.R SUBMITTED THAT GROUND NO.1 IS GENE RAL IN NATURE. HE SUBMITTED THAT GROUND NO.2 RELATES TO THE DEDUCTION ALLOWED U/S 10B OF THE ACT. THE LD A.R SUBMITTED THAT ASSESSEE CLAIMED DEDUCTION U/S 10B OF THE ACT IN ITS RETURN OF INCOM E. THE AO, HOWEVER, REDUCED EXPENSES INCURRED BY THE ASSESSEE UNDER THE HEADS FREIGHT, TRAVELLING, SUB-CONTRACTING CHARGES AND B ANK CHARGES FROM THE AMOUNT OF EXPORT TURNOVER, WHILE COMPUTING DE DUCTION U/S 10B OF THE ACT. ACCORDINGLY, THE QUANTUM OF DEDUCTION CAME TO BE REDUCED BY THE AO. BEFORE LD CIT(A), THE ASSESSEE TOOK THE MAIN PLEA ITA NO.2194 /BANG/2018 M/S. CENTUM ELECTRONICS LTD., BENGALURU PAGE 3 OF 5 THAT THE ABOVE SAID EXPENSES ARE NOT REQUIRED TO BE REDUCED FROM THE AMOUNT OF EXPORT TURNOVER, WHILE COMPUTING DEDUCT ION U/S 10B OF THE ACT. ALTERNATIVELY, THE ASSESSEE ALSO TOOK A P LEA THAT THE AMOUNTS SO REDUCED FROM EXPORT TURNOVER SHOULD ALSO BE RE DUCED FROM THE TOTAL TURNOVER, WHILE COMPUTING DEDUCTION U/S 10B OF THE ACT. 5. THE LD A.R SUBMITTED THAT THE LD CIT(A) DID NOT ADJUDICATE THE MAIN CONTENTION OF THE ASSESSEE, I.E., THE IMPUGNED AMOUNTS SHOULD NOT BE REDUCED FROM EXPORT TURNOVER AT ALL. HOWEVE R, THE LD CIT(A) ALLOWED THE ALTERNATIVE PLEA OF THE ASSESSEE AND AC CORDINGLY DIRECTED THE AO TO REDUCE THE IMPUGNED AMOUNTS FROM TOTAL TU RNOVER ALSO, WHILE COMPUTING DEDUCTION U/S 10B OF THE ACT. 6. THE LD A.R SUBMITTED THAT THE ASSESSEE WOUL D GET FURTHER RELIEF, IF ITS MAIN CONTENTION IS ACCEPTED. HE SUBMITTED T HAT THE SAME REQUIRES VERIFICATION OF CERTAIN FACTUAL ASPECTS AN D ACCORDINGLY PRAYED THAT THIS ISSUE MAY BE RESTORED TO THE FILE OF THE AO, EVEN THOUGH IT WAS NOT ADJUDICATED BY LD CIT(A). HE FURTHER SUBMI TTED THAT THE CLAIM OF THE ASSESSEE IS SUPPORTED BY THE DECISIONS RENDERED BY HONBLE KARNATAKA HIGH COURT, WHICH ARE REPORTED IN 382 ITR 654; 427 ITR 338 AND 428 ITR 245. 7. WITH REGARD TO GROUNDS 3 TO 4.3, THE LD A.R SUBMITTED THAT THE ASSESSEE HAS RAISED CERTAIN ADDITION CLAIMS BEFORE THE AO BY FURNISHING A LETTER DATED 01-12-2010. HE SUBMITTED THAT A COPY OF THE ABOVE SAID LETTER IS PLACED AT PAGES12-13 OF TH E PAPER BOOK. HE SUBMITTED THAT THE ADDITIONAL CLAIMS PUT FORTH BY T HE ASSESSEE BEFORE AO CONSISTED OF (A) REVISION OF AMOUNT OF DEPRECIATION CLAIMED (B) WRONG DISALLOWANCE MADE U/S 40(A)(IA) OF THE A CT (C) ERROR IN COMPUTATION OF DEDUCTION U/S 10B OF THE ACT (D) CLAIM FOR TDS CREDIT. ITA NO.2194 /BANG/2018 M/S. CENTUM ELECTRONICS LTD., BENGALURU PAGE 4 OF 5 THE LD A.R SUBMITTED THAT THE AO DID NOT CONSIDER A LL THESE ADDITIONAL CLAIMS MADE BY THE ASSESSEE. THE LD CIT (A) REJECTED THE GROUNDS RELATING TO THE ABOVE SAID CLAIMS BY STATIN G THAT THE ASSESSEE DID NOT MAKE THESE CLAIMS BY FILING REVISED RETURN OF INCOME. THE LD A.R SUBMITTED THAT THE ASSESSEE HAS PUT FORTH THESE CLAIMS BEFORE THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSE LF. HE FURTHER SUBMITTED THAT THE TRIBUNAL HAS POWER TO ADMIT ADDI TIONAL GROUNDS EVEN WITHOUT FILING OF REVISED RETURN OF INCOME BY THE ASSESSEE. IN SUPPORT OF THIS PROPOSITION, HE PLACED HIS RELIANCE ON THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN THE CASE OF TR C ENGINEERING INDIA (P) LTD (ITA 499/BANG/2020 DATED 11.11.2020) (84 ITR (TRIB) 40). ACCORDINGLY HE SUBMITTED THAT THE AO MAY KIND LY BE DIRECTED TO CONSIDER THE ADDITIONAL CLAIMS CITED ABOVE. 8. WE HEARD LD D.R AND PERUSED THE RECORD. W E NOTICE THAT THE LD CIT(A) DID NOT ADJUDICATE MAIN CONTENTION OF THE ASSESSEE WITH REGARD TO EXCLUSION OF CERTAIN ITEMS FROM THE AMOUN T OF EXPORT TURNOVER, WHILE COMPUTING DEDUCTION U/S 10B OF THE ACT. IT IS THE SUBMISSION OF THE ASSESSEE THAT THE SAID CONTENTION OF THE ASSESSEE REQUIRES VERIFICATION OF CERTAIN FACTS AND ACCORDIN GLY IT IS PRAYED THAT THIS ISSUE MAY BE RESTORED TO THE FILE OF THE AO. WITH REGARD TO THE ADDITIONAL CLAIMS PUT FORTH BEFORE THE AO, WE NOTIC E THAT THE LD CIT(A) REJECTED THE SAME ON THE PLEA THAT THE ASSESSEE DID NOT MAKE THESE ADDITIONAL CLAIMS BY FILING REVISED RETURN OF INCOM E. EVEN THOUGH THE HONBLE SUPREME COURT HAS HELD IN THE CASE OF G OETZ INDIA LTD (284 ITR 323) THAT THE ASSESSEE COULD MAKE ADDITION AL CLAIMS ONLY BY FILING REVISED RETURN OF INCOME, YET THE HONBLE SU PREME COURT HAS HELD THAT ITS ORDER DOES NOT IMPINGE THE POWER OF T HE ITAT TO ADMIT ADDITIONAL CLAIMS. SINCE THE ASSESSEE HAS PUT FORTH THESE ADDITIONAL CLAIMS BEFORE THE AO THROUGH ITS LETTER REFERRED AB OVE, WE ARE OF THE VIEW THAT THESE ADDITIONAL CLAIMS REQUIRE EXAMINATI ON FOR ARRIVING ITA NO.2194 /BANG/2018 M/S. CENTUM ELECTRONICS LTD., BENGALURU PAGE 5 OF 5 CORRECT AMOUNT OF TOTAL INCOME. ACCORDINGLY, WE AD MIT THESE ADDITIONAL CLAIMS. 9. WE ARE OF THE VIEW THAT ALL THE ABOVE SAID ISSUES REQUIRE EXAMINATION AT THE END OF THE AO. ACCORDINGLY, WE RESTORE ALL OF THEM TO THE FILE OF THE AO FOR EXAMINING THEM IN ACCORDA NCE WITH LAW, AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DEC, 2020 SD/- (BEENA PILLAI) JUDICIAL MEMBER SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 28 TH DEC, 2020. VG/SPS COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.