Blaise Information Systems, CHENNAI V. ITO, CHENNAI

ITA 2285/CHNY/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8627 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 18-12-2015
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: V S JAYAKUMAR

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL S M C-A BENCH : CHENNAI . . . , [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER ] ./ I.T.A.NO. 2285/MDS/2015 / ASSESSMENT YEAR : 2011-12 M/S BLAISE INFORMATION SYSTEMS NO.55, FLAT NO.5, EMBASSY TOWER 4 TH FLOOR, MONTIETH ROAD EGMORE, CHENNAI 600008 VS. THE INCOME TAX OFFICER BUSINESS WARD VI(1) [PRESENTLY NCW 9(1) CHENNAI [PAN AAAFB 5059 N ] ( ! / APPELLANT) ( '# ! /RESPONDENT) / APPELLANT BY : SHRI V.S JAYAKUMAR, ADVOCATE /RESPONDENT BY : SHRI P. R ADHAKRISHNAN, JCIT / DATE OF HEARING : 15 - 06 - 2016 / DATE OF PRONOUNCEMENT : 18 - 08 - 2016 / O R D E R THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-10, CHENN AI, DATED 26.11.2015 AND PERTAINS TO ASSESSMENT YEAR 2011-1 2. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS DISALLOW ANCE OF EXEMPTION CLAIMED U/S 10A OF THE ACT. 3. SHRI V.S.JAYAKUMAR, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE ASSESSEE CLAIMED DEDUCTION U/S 10A OF T HE ACT. HOWEVER, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE ITA NO. 2285/15 :- 2 -: GROUND THAT TEN YEARS PERIOD HAS ALREADY EXPIRED FR OM THE YEAR IN WHICH THE MANUFACTURING WAS STARTED, THEREFORE, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION DURING THE YEAR UNDER CONSID ERATION. REFERRING TO THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CAS E OF NAGESH CHUNDUR VS CIT, 358 ITR 521, THE LD. COUNSEL SUBMIT TED THAT MERELY BECAUSE THE ASSESSEE WAS IN EXISTENCE PRIOR TO THE DATE OF REGISTRATION AS SOFTWARE TECHNOLOGY PARK, WOULD NOT DISENTITLE T HE ASSESSEE FROM CLAIMING DEDUCTION U/S 10A(2) OF THE ACT. IN V IEW OF THIS JUDGMENT OF THE MADRAS HIGH COURT, ACCORDING TO THE LD. COUN SEL, THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE ASSESS ING OFFICER. 4. ON THE CONTRARY, SHRI P. RADHAKRISHNAN, LD. DEPARTM ENTAL REPRESENTATIVE SUBMITTED THAT SEC. 10(A)(1) OF THE ACT CLEARLY SAYS THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION IN RESPECT OF THE PROFITS AND GAINS DERIVED FROM EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BE GINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE SUCH A RTICLES OR THINGS AS THE CASE MAY BE. IN THE CASE BEFORE US, ADMITTE DLY, THE ASSESSEE BEGINS TO MANUFACTURE THE ARTICLES OR THINGS IN THE FIRST WEEK OF MARCH 2001 AND ASSESSMENT YEAR 2011-12 IS BEYOND THE PERI OD OF TEN CONSECUTIVE YEARS. REFERRING TO THE JUDGMENT OF MA DRAS HIGH COURT IN THE CASE OF NAGESH CHUNDUR(SUPRA), THE LD. DR SUBMI TTED THAT THE ITA NO. 2285/15 :- 3 -: ISSUE OF BEGINS TO MANUFACTURE SUCH ARTICLES OR T HINGS WAS NOT SUBJECT MATTER BEFORE THE MADRAS HIGH COURT. IN TH AT CASE, THE MADRAS HIGH COURT HAS CONSIDERED THE ISSUE WITH REGARD TO ELIGIBLE BUSINESS U/S 10A(2) OF THE ACT. THE PROVISIONS OF SEC. 10A( 1) OF THE ACT IS NOT SUBJECT MATTER OF DISCUSSION IN THE JUDGMENT OF THE MADRAS HIGH COURT. EVEN THOUGH A CASUAL REFERENCE WAS MADE AT PARAS 9 & 20 OF THE JUDGMENT, THE JUDGMENT PROCEEDED TO DISCUSS ABOUT T HE SECOND PROVISO TO SEC. 10A(1) OF THE ACT. HOWEVER, THE MA IN PROVISION OF SEC. 10A(1) IS NOT SUBJECT MATTER OF DISCUSSION, THEREFO RE, THE JUDGMENT OF THE MADRAS HIGH COURT IS NOT APPLICABLE. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER S IDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. ADM ITTEDLY, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S 10A FOR TE N CONSECUTIVE ASSESSMENT YEARS FROM THE ASSESSMENT YEAR IN WHICH THE ASSESSEE BEGINS TO MANUFACTURE OR PRODUCE SUCH ARTICLES OR T HINGS. IN THIS CASE, IT IS NOT IN DISPUTE THAT THE ASSESSEE BEGINS TO M ANUFACTURE ARTICLES OR THINGS IN THE FIRST WEEK OF MARCH 2001, THEREFORE, THE ASSESSMENT YEAR UNDER CONSIDERATION IS BEYOND TEN CONSECUTIVE ASSES SMENT YEARS. SINCE THE ASSESSMENT YEAR UNDER CONSIDERATION IS BE YOND THE PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS, THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S 10A OF THE ACT. ITA NO. 2285/15 :- 4 -: 6. I HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE M ADRAS HIGH COURT IN THE CASE OF NAGESH CHUNDUR (SUPRA). AS RIGHTLY SUBMITTED BY THE LD. DR, BEGINNING OF THE YEAR IN W HICH THE ASSESSEE IS ELIGIBLE FOR EXEMPTION IS NOT THE SUBJECT MATTER OF DISCUSSION. THE MADRAS HIGH COURT, AFTER REFERRING TO SEC. 10A(2) O F THE ACT, FOUND THAT EVEN THOUGH THE ASSESSEE WAS IN EXISTENCE, THE AS SESSEE IS ELIGIBLE FOR EXEMPTION. REFERRING TO THE BEGINNING OF THE Y EAR, THE MADRAS SPECIFICALLY FOUND THAT THE PERIOD OF TEN CONSECUTI VE ASSESSMENT YEARS REFERRED TO IN SEC. 10A SHALL BE RECKONED FROM THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE ASSESSE E STARTED MANUFACTURING OR PRODUCING ARTICLES OR THINGS. IN FACT, THE MADRAS HIGH COURT HAS OBSERVED AT PARA 20 OF THE JUDGMENT AS UNDER: 20. WE DO NOT THINK IT SO. THE SECOND PROVISO TO SECTIO N 10A(1) OF THE ACT STATES THAT WHERE THE UNDERTAKING LOCATED IN ANY FREE TRADE ZONE OR EXPORT PROCESSING ZONE IS SUBSEQUENTLY LOCATED IN A SPECIAL ECONOMIC ZONE BY REASON OF CONVERSION OF SUCH FREE TRADE ZONE OR EXPORT PRO CESSING ZONE INTO A SPECIAL ECONOMIC ZONE, THE PERIOD OF TE N CONSECUTIVE ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION SHALL BE RECKONED FROM THE ASSESSMENT Y EAR RELEVANT TO THE PREVIOUS YEAR IN WHICH IT HAD START ED MANUFACTURE OR PRODUCE SUCH ARTICLES OR THINGS OR COMPUTER SOFTWARE IN THE FREE TRADE ZONE OR THE EXP ORT PROCESSING ZONE OR OTHERWISE, AND CLARIFIES THAT TH E BENEFIT WOULD CONTINUED TO BE AVAILABLE TO THE BALA NCE OF PERIOD AVAILABLE TO THE FREE TRADE ZONE WHICH HAS B EEN SUBSEQUENTLY GOT CONVERTED INTO SPECIAL ECONOMIC ZO NE. ITA NO. 2285/15 :- 5 -: 7. IN VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONS IDERED OPINION THAT THE PERIOD OF TEN CONSECUTIVE YEARS SH ALL BE RECKONED FROM THE YEAR IN WHICH THE ASSESSEE STARTED MANUFACTURI NG ARTICLE OR THING. SINCE THE ASSESSEE STARTED MANUFACTURING THINGS IN THE FIRST WEEK OF MARCH 2001, THE ASSESSMENT YEAR UNDER CONSIDERATION IS BEYOND THE PERIOD OF TEN YEARS. THEREFORE, THE ASSESSEE IS N OT ELIGIBLE FOR EXEMPTION U/S 10A OF THE ACT. THIS TRIBUNAL DO NO T FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A) AND ACCORDI NGLY, HE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH AUGUST, 2016, AT CHENNAI. SD/- ( . . . ! ) (N.R.S. GANESAN) / JUDICIAL MEMBER '# / CHENNAI $% / DATED: 18 TH AUGUST, 2016 RD %&'' ()'*) / COPY TO: ' 1 . / APPELLANT 4. ' + / CIT 2. / RESPONDENT 5. ),-' . / DR 3. ' +'/! / CIT(A) 6. -0'1 / GF