The DCIT, Circle-4, Ahmedabad V. Gateway Techno Labs Pvt. Ltd., Ahmedabad

ITA 2487/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6039 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 04-05-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 08-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIBHA BHALLA
• Assessee Lawyers: J P SHAH
• Section: 142(1); 10B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD , ACCOUNTANT MEMBER ./ ITA.NO. 2487 / AHD /201 4 / ASSTT. YEAR: 2011 - 20 12 D.C.I.T CIRCLE - 4 , AHMEDABAD VS . M/S. GATEWAY TECHNOLABS PVT. LTD. B - 81, CORPORATE HOUSE, JUDGES BUNGLOW ROAD, S.G. HIGHWAY, BODAKDEV, AHMEDABAD - 38007 . PAN : AABCG4206C (APPLICANT) (RESPONENT) REVENUE BY : MS. VIBHA BHALLA, CIT, DR ASSESSEE BY : MR. J. P. SHAH , A.R / DATE OF HEARING : 04 / 05 / 201 7 / DATE OF PRONOUNCEMENT: 08 / 05 /201 7 / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE FOR ASST. YEAR 2011 - 12 IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) - VIII, AHMEDABAD (IN SHORT LD.CIT A) DATED 19 / 0 6 / 201 4 VIDE APPEAL NO.CIT(A) - VIII/DCIT/CIR.4/429/13 - 14 . ASSESSMENT WAS FRAMED U/S 143( 3) OF INCOME TAX ACT, 1961 (HEREIN AFTER REFERRED AS ACT ) ON 28 /02/2014 BY D CIT , CIRCLE - 4 , AHMEDABAD. ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.90,22,677/ - MADE ON ACCOUNT OF DISALLOWANCE U/S.10A OF THE ACT, WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND THE MATERIAL BROUGHT ON RECORD. 2. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF ASSESSING OFFICER. 3. IT IS THEREFORE, PR AYED THAT THE ORDER OF THE LD.CIT(A) MAY BE SET - A - ASIDE AND THAT OF THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM RECORDS ARE THAT , ASSESSE IS A PRIVATE LIMITED C OMPANY ENGAGED IN THE BUSINESS OF COMPUTER SOFTWARE DEVELOPMENT . INCOME TAX RETURN , DECLARING INCOME OF RS.1,59,20,642/ - WAS FILED ON 25/09/2010 , AFTER CLAIMING DEDUCTION U/S.10A OF THE ACT AT RS.90,22,677/ - TOWARDS PROFIT FROM NEWLY ESTABLISH ED UNDERTAKING S IN FREE TRADE ZONE. THE CASE WAS SEL ECTED FOR SCRUTINY ASSESSMENT AND N ECESSARY INFORMATION WERE CALLED FOR VIDE NOTICE UNDER SECTION 143(2) OF THE ACT, FOLLOWED BY 142(1) OF THE ACT ISSUED AND DULY SERVED UPON THE ASSESSEE . DURING THE COURSE OF ASSESSMENT P ROCEEDINGS LEARNED ASSESSING OFFICER (IN SHORT LD.AO) EXAMINED THE DEDUCTION OF CLAIM U/S.10A OF THE ACT, AND WITHOUT POINTING OUT ANY MISTAKE IN THE CALCULATION OF CLAIM BY JUST FOLLOWING THE CONSISTENT VIEW OF HIS PREDECESSOR DISALLOWED THE CLAIM OF ASSESSEE OF RS.90,22,677/ - U/S.10A OF THE ACT. LD.AO ALSO MADE DISALLOWANCE U/S.14A OF THE ACT AT RS.2334647 AND INCOME ASSESSED AT RS.2,72,77,966/ - 4. AGGRIEVED ASSESSEE WENT IN APPEAL BEFORE LD.CIT(A) AND PARTLY SUCCEEDED AS LD.CIT(A) DELETED THE DISALLOWA NCE MADE U/S.10A OF THE ACT AND ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 3 AS REGARD TO DISALLOWANCE U/S.14A OF THE ACT , GAVE DIRECTION TO RE - C ALCULATE THE SAME. 5. A GGRIEVED REVENUE IS NOW IN APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF LD.CIT(A) ALLOWING ASSESSEES CLAIM OF DEDUCTION U/S.10A OF THE ACT OF RS.90,22,677/ - 6. AT THE OUTSET LD.COUNSEL FOR TH E ASSESSEE SUBMITTED THAT ISSUE RAISED IN THIS APPEAL IS SQUARELY COVERED IN THE FAVOUR OF ASSESSEE BY THE DECISION OF COORDINATE BENCH IN ITA NO S .711 &712/AHD/201 4 FOR ASST.YEARS 2008 - 09 AND 2009 - 10 IN ASSESSEES OWN CASE PRONOUNCED ON 14/03/2017. HE FURTHER MENTIONED THAT THE FACTS ARE SIMILAR EXCEPT CHANGE IN ASSESSMENT YEAR AND IN VIEW THEREOF NO INTERFERE NCE IS CALLED FOR IN THE ORDER OF LD.CIT(A) . 7 . ON THE O THER HAND LEARNED DEPARTMENTAL REPRESENTATIVE (IN SHORT LD.AO) COULD NOT CONTROVERT THE SUBMISSION MADE BY THE LD.COUNSEL AND CONCEDED THAT ISSUE RAISED IN THIS APPEAL ARE SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF COORDINATE BENCH IN TH E ASSESSEES OWN CASE FOR A.YS 2008 - 09 AND 2009 - 10 AS REFERRED ABOVE. 8 . WE HAVE HEARD THE RIVAL CONTENTIONS ARE PERUSED THE RECORD PLACED BEFORE US. S OLITARY GRIEVANCE OF THE REVENUE IS AGAINST LD. CIT(A) S O RDER, DELETING DISALLOWANCE U/S.10 A OF THE ACT MADE BY THE LD . AO. WE NOTICE THAT ASSESSEE IS 100% EXPORT ORIENTED UNIT REGISTERED WITH SOFTWARE DEVELOPMENT PARK OF INDIA ESTABLISHED SINCE ASSESSMENT YEAR 2002 - 03. FROM THE ASSESSMENT YEARS 2002 - 03 TO 2007 - 08 ASSESSEE WAS CLAIMING THE BENEFIT OF DEDU CTION U/S.10B OF THE ACT AVAILABLE TO NEWLY ESTABLISH ED 100% EXPORT UNDERTAKING ENGAGED IN THE EXPORT OF COMPUTER SOFTWARE. F OR ASSESSMENT YEAR 2002 - 03 CLAIM OF ASSESSEE ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 4 WAS ALLOWED BY THE ASSESSING OFFICER IN THE ORDER U/S.143(1) OF THE ACT . I N ALL THE R EMAINING YEARS I.E A.YS 2003 - 04 TO 2007 - 08 ASSESSEE WAS DENIED THE BENEFIT OF SECTION 10B OF THE ACT BY LD.AO BUT ALLOWED BY LD.CIT(A). CLAIM OF ASSESSEE U/S.10B OF THE ACT WAS HELD TO BE JUSTIFIED BY THE COORDINATE BENCH IN THEIR DECISION DATED 04/09/2009 FOR A.Y. 2003 - 04 DATED 30/10/2009 FOR A.YS 2004 - 05 TO 2006 - 2007 AND DATED 09/07/2010 FOR A.Y 2007 - 08. HOWEVER FROM ASSESSMENT YEAR 2008 - 09 ONWARDS ASSESSEE STARTED CLAIMING THE DEDUCTION U/S.10A OF THE ACT BY LD.AO BUT ALLOWED BY LD.CIT(A) WHICH IS SPECI FICALLY MEANT FOR NEWLY ESTABLISHED UNDERTAKINGS IN FREE TRADE ZONE. FOR A.YS 2008 - 09 AND 2009 - 10 IN THE PROCEEDINGS BEFORE LD.AO ASSESSEES CLAIM WAS DENIED, BUT LD.CIT(A) DELETED THE DISALLOWANCE AND THEREAFTER REVENUES APPEAL WAS DISMISSED BY THE COORD INATE BENCH VIDE ITA NO S .711& 712/AHD/2014 DATED 14/03/2017 CONFIRMING THE ORDER OF LD.CIT(A). 9 . FURTHER, IN THIS APPEAL WE OBSERVE THAT ASSESSEE HAS CLAIM ED DEDUCTION U/S.10A OF THE ACT AND HAS FILED FORM NO.56F IN SUPPORT OF THE CLAIM. THERE IS NO DISP UTE WITH REGARD TO FULFILLMENT OF BASIC CONDITIONS EMBEDDED IN THE PROVISIONS OF SECTION 10A OF THE ACT. IT SEEMS THAT LD.AO HAS TREATED ASSESSMENT YEAR 2008 - 09 AS THE FIRST YEAR OF THE CLAIM MADE U/S.10A OF THE ACT. BUT FROM PERUSAL OF THE RECORD S WE NOT ICE THAT ASSESSEE HAS BEEN CLAIMING BENEFIT U/S.10B FROM A.YS 2002 - 03 TO 2007 - 2008 AND FROM A.Y 2008 - 09 ONWARDS IT STARTED CLAIMING BENEFIT U/S.10A AND THE PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS WILL FURNISH IN A.Y.2011 - 12. 10 . WE FURTHER OBSERVE TH AT ISSUE RAISED IN THIS APPEAL ARE SQUARELY COVERED BY THE DECISION OF COORDINATE BENCH IN ASSESSEES OWN CASE IN A.YS 2008 - 09 AND 2009 - 10 IN ITA NO.713 & 712/AHD/2014 DATED 14/03/2017 ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 5 11 . LD.DR HAS NOT CONTROVERTED TO THE SUBMISSIONS OF LD.COUNSEL AND - ALSO NOT BROUGHT ON RECORDS ANY MISTAKE OR DEFECTS IN THE FULFILLMENT OF ANY CONDITIONS REQUIRED AS PER THE PROVISIONS OF SECTION 10A OF THE ACT BY THE ASSESSEE. WE OBSERVE THAT COORDINATE BENCH CONFIRMED THE ORDER OF LD.CIT(A) FOR A.YS 2008 - 09 AND 2009 - 10 IN THEIR ORDER DATED 14/03/2017 BY OBSERVING AS FOLLOWS: 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD PLACED BEFORE US. IN REVENUE'S APPEAL FOR ASST. YEAR 2008 - 09 & 2009 - 10 THE SOLE GRIEVANCE IS AGAINST THE ID. COMMISSIONER OF INCOME TAX (A)'S ORDER ALLOWING EXEMPTION U/S 10A OF THE ACT TO THE ASSESSEE. WE OBSERVE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS ID. ASSESSING OFFICER DENIED EXEMPTION U/S 10A OF THE ACT BY FOLLOWING HIS PREDECESSOR'S ORDER IN PREVIOUS ASST. YEAR 2004 - 05 AND IGNORING THE FACT THAT IN ASSESSEE'S OWN CASE THE CO - ORDINATE BENCH HAS CONFIRMED THE ID. COMMISSIONER OF INCOME TAX(A)'S ORDER ALLOWING ASSESSEE'S CLAIM OF DEDUCTION U/S 10B OF THE ACT FOR ASST. YEAR 2003 - 04 TO 2007 - 08. WE FURTHER OBSERVE THAT ID. COMMIS SIONER OF INCOME TAX(A) HAS ALLOWED ASSESSEE'S APPEAL ELABORATELY DISCUSSING THE FACTS AND FOLLOWING THE JUDGMENT OF HON. JURISDICTIONAL HIGH COURT IN THE CASE OF SAURASHTRA CEMENT & CHEMICALS INDUSTRIES LTD. (SUPRA) BY OBSERVING AS FOLLOWS : - 4.3 DECI SION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE APPELLANT COMPANY IS IN THE BUSINESS OF SOFTWARE DEVELOPMENT AND INFORMATION TECHNOLOGY RELATED SERVICES. IT IS A HUNDRED PERCENT EXPOR T ORIENTED UNIT REGISTERED IN SOFTWARETECHNOLOGY PARK APPROVED BY THE MINISTRY OF INDUSTRIES. THE COMPANY STARTED ITS BUSINESS DURING FINANCIAL YEAR 2002 - 03 AND STARTED CLAIMING DEDUCTION UNDER SECTION 10 B OF THE ACT. IT CLAIMED THE DEDUCTION UNDER SECT ION 10 A UP TO ASSESSMENT YEAR 2007 - 08 SINCE THEN. DURING THE FIRST ASSESSMENT YEAR I.E.2003 - 04 THE DEDUCTION WAS DISALLOWED AS IT WAS HELD BY THE AO THAT THE RATIO OF OLD PLANT AND MACHINERY UTILISED IN THE BUSINESS WAS MORE THAN 20%. THE APPELLANT WON IN APPEAL BEFORE IT AT AHMEDABAD AND IN SUBSEQUENT YEARS THE CLAIM WAS DISALLOWED BY AO BUT IT WAS ALLOWED BY IT AT UP TO A. Y2007 - 08. SUBSEQUENTLY, SINCE THE APPELLANT WAS WORKING IN STP IT MADE A CLAIM UNDER SECTION 10 A FOR A. Y 2008 - 09 AND 2009 - 10. THE AO DISALLOWED THE CLAIM BY FOLLOWING THE EARLIER YEARS PRACTICE OF DISALLOWANCE. HOWEVER, HE MADE THE DISALLOWANCE OF DEDUCTION UNDER SECTION 10 B. ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 6 THE APPELLANT IS IN APPEAL BEFORE ME AGAINST SUCH DISALLOWANCE. IT HAS RAISED ADDITIONAL GROUNDS OF APPEAL WHICH WERE DULY FORWARDED TO THE AO AND HIS COMMENTS HAVE ALSO BEEN OBTAINED. THE APPELLANT, IN THE ADDITIONAL GROUNDS HAS SUBMITTED THAT IN CASE THE CLAIM IS NOT HELD TO BE ADMISSIBLE UNDER SECTION 10 A IT MAY BE ALLOWED EITHER UNDER SECTION 10 A OR 10 B AS ALLOWED IN EARLIER YEARS UP TO A.Y 2007 - 08 BY ITAT. IT HAS ALSO SUBMITTED PRESCRIBED FOR NO. 56F FOR DEDUCTION UNDER SECTION 10 A AND 56G FOR DEDUCTION UNDER SECTION 10 B, IN THE REPORT THE AO HAS SUBMITTED THAT THE DEDUCTION UNDER SECTION 10 B CANNOT BE ALLOWED TO THE APPELLANT AS THE APPELLANT HAS NOT FURNISHED THE PRESCRIBED FORM ALONG WITH THE RETURN OF INCOME AND IT WAS THE DUTY OF THE APPELLANT TO FOLLOW THE PROVISIONS OF THE SECTION WHICH HE FAILED TO DO. HE HAS ALSO REPORTED THAT THE C LAIM UNDER SECTION 10A OF THE ACT CANNOT BE ALLOWED AS THE REPORT FURNISHED UNDER SECTION 10 A IN FORM 56F IS NOT CORRECT. IT HAS BEEN MENTIONED THAT IN POINT 8 OF THE REPORT, THE APPELLANT MENTIONED THAT IT WAS EIGHTH YEAR OF DEDUCTION WHEREAS AS PER THE APPELLANT'S OWN SUBMISSION AND EARLIER RECORD IT WAS EVIDENT THAT IT WAS THE FIRST YEAR OF DEDUCTION. EARLIER THE APPELLANT WAS CLAIMING DEDUCTION UNDER SECTION 10 B AND NOW IT HAS SWITCHED FOR DEDUCTION UNDER SECTION 10 A. THE APPELLANT HAS NOT ESTABLISHE D FIRST YEAR OF CLAIM. HE HAS PLACED RELIANCE ON THE JUDGEMENT OF HONOURABLE DELHI HIGH COURT IN THE CASE OF REGENCY CREATIONS 27 TAXMAN.COM 322. THE FIRST ISSUE TO BE DECIDED IS WHETHER THE ADDITIONAL GROUNDS RAISED BY THE APPELLANT ARE ADMISSIBLE OR NOT . IN MY CONSIDERED OPINION THE GROUNDS ADMISSIBLE AS THERE IS NO NEW FACT WHICH HAS BEEN BROUGHT ON RECORD. THE CLAIM OF THE APPELLANT UNDER SECTION 10 A OR 10 B IS LEGAL IN NATURE AND IS ALSO BONA FIDE. IT IS A KNOWN FACT THAT THERE IS SOME CONFUSION REGA RDING THE CLAIMS UNDER SECTION 10 A AND 10B AND THERE IS CONSIDERABLE LITIGATION IN ITAT AND HIGH COURT ON THE ISSUE. MANY CONDITIONS IN SECTION 10 A AND 10B ARE OVERLAPPING. HONOURABLE BOMBAY HIGH COURT IN THE CASE OF THE PRUFHVI BROKERS AND SHAREHOLDERS PRIVATE LIMITED 349 ITR 336 HAS HELD THAT THE APPELLANT AUTHORITIES HAVE POWER TO CONSIDER CLAIMS NOT MADE IN RETURN OF INCOME PROVIDED THE CLAIMS ARE OF BONA FIDE NATURE. ALL THE INFORMATION WHICH HAS NOW BEEN GIVEN BY THE APPELLANT IN THE REVISED CLAIM A ND THE NEW REPORT IN FORM 56G WAS THERE ON RECORDS EARLIER ALSO. IT IS ONLY TO CHANGE OF SECTION., WHICH HAS BEEN MADE BY THE APPELLANT. THEREFORE, THE ADDITIONAL GROUNDS OF APPEAL FILED BY THE APPELLANT ARE ADMITTED FOR CONSIDERATION. THE OBJECTIONS RAISED BY THE AO IN THE REPORT ARE FIRST TAKEN UP FOR EXAMINATION. THE AO HAS SUBMITTED THAT THE CLAIM OF THE APPELLANT U/S 10 B SHOULD NOT BE ADMITTED AS THE APPELLANT HAS NOT FURNISHED FORM 56G WITH THE RETURN OF INCOME. IN THIS CONNECTION IT IS NOTED THAT. IN THIS CONNECTION IT IS NOTED THAT ASSESSES MADE CLAIM U/S 10A. THE CLAIM WAS DISALLOWED BY THE AO ON THE GROUND THAT IN EARLIER YEARS THE CLAIM UNDER SECTION 10 B WAS DISALLOWED. THE APPELLANT, THEREFORE, ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 7 MADE AN ALTERNATIVE CLAIM UNDE R SECTION 10 B BY FILING ADDITIONAL GROUND IN THE APPEAL. AS HAS BEEN DISCUSSED BY ME IN THE PRECEDING PARAGRAPHS THAT THE CLAIM ISU ADMISSIBLE AS IT WAS BONA FIDE AND NO NEW FACTS ARE BEING BROUGHT ON RECORD. FURTHER THERE ARE SEVERAL JUDICIAL PRONOUNCEME NTS WHICH HOLD THAT THE REPORT OF THE CHARTERED ACCOUNTANT CAN BE FILED EVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE OBJECTION RAISED BY THE AO IS NOT ACCEPTABLE. THE AO HAS ALSO OBJECTED TO THE ALLOWANCE OF CLAIM UNDER SECTION 10A ON THE GROUND THAT IN FORM NUMBER 56F THE APPELLANT HAS MENTIONED THAT IT WAS THE EIGHTH YEAR OF CLAIM OF DEDUCTION WHERE AS IT WAS FOR THE FIRST YEAR, THE DEDUCTION WAS THE CLAIMED UNDER SECTION 10 A . THE CLAIM OF THE AO IS NOT ACCEPTABLE AS IT IS NOT THE F IRST YEAR OF CLAIM OF DEDUCTION BY THE APPELLANT. THE APPELLANT HAS BEEN CLAIMING DEDUCTION UNDER SECTION 10 B IN THE EARLIER YEARS WHICH WAS ALLOWED BY THE ORDERS OF ITAT . THE CONDITIONS WHICH ARE TO BE SEEN BEFORE ALLOWING THE CLAIM UNDER SECTION 10 A A RE, FIRST OF ALL, WHETHER THE ACTIVITY OF PRODUCTION HAS COMMENCED IN STP BEFORE A PARTICULAR YEAR. THE OTHER CONDITIONS WHICH ARE TO BE EXAMINED ARE REGARDING THE FORMATION OF UNDERTAKING WHETHER IT IS A NEW UNDERTAKING OR FORMED BY SPLITTING UP OF AN EXI STING UNIT. IN THE PRESENT CASE THE ISSUE, OF FORMATION OF UNDERTAKING HAS BEEN EXAMINED IN THE EARLIER YEARS AND HAS BEEN HELD TO BE VALID FORMATION. THE EARLIER OBJECTION OF HAVING MORE THAN 20% OLD PLANT AND MACHINERY HAS ALSO BEEN EXAMINED BY ITAT AND IT HAS BEEN HELD THAT THE DISALLOWANCE WAS NOT PROPER. FURTHER, THE APPELLANT HAS RIGHTLY WRITTEN IN FORM 56F THAT IT WAS THE EIGHTH YEAR OF CLAIM OF DEDUCTION. APPELLANT IS NOT MAKING THE CLAIM FOR THE NEXT 10 YEARS. EVEN THE JUDGEMENT MENTIONED BY THE AO IN ITS REPORT IN THE CASE OF SAMI LABS LTD. 334 ITR 157 (KARNATAK HIGH COURT) HOLDS THAT THE STARTING POINT FOR LIMITATION FOR CLAIMING BENEFIT U/S.LOB WOULD COMMENCE FROM THE YEAR OF MANUFACTURE OR PRODUCTION OF UNDERTAKING. THE ASSESSEE WOULD NOT BE LIA BLE TO CLAIM SUCH DEDUCTION IN SUBSEQUENT YEARS UNLESS SAID INITIAL TEST ON DATE OF STARTING POINT OF LIMITATION HAS BEEN SATISFIED. THE APPELLANT CLAIMED DEDUCTION FOR THE FIRST TIME UNDER SECTION 10 B FOR A. Y 2002 - 03. THE APPELLANT IS NOT MAKING THE CL AIM FOR THE FIRST TIME. IT IS OBSERVED THAT THERE IS NO CHANGE IN THE SETUP OF THE APPELLANT COMPANY IT IS THE SAME WHICH CLAIMED THE DEDUCTION UNDER SECTION 10 B FOR THE FIRST TIME FOR A. Y 2002 - 03. IT HAS BEEN HELD BY HONOURABLE MADRAS HIGH COURT IN THE CASE OF NAGESH CHUNDUR VS. COMMISSIONER OF INCOME - TAX, CIRCLE - XV, CHENNAIREPORTEDIN39TAXMAN.COM 190 THAT IN ORDER TO CLAIM DEDUCTION, UNDER SECTION 10A, TWIN CONDITIONS ARE THAT AN UNDERTAKING IN HARDWARE J TECHNOLOGY PARK OR SO FTWARE TECHNOLOGY PARK MUST BE IN EXISTENCE COMMENCING ITS PRODUCTION ON OR AFTER 1 - 4 - 1994 AND IT SHOULD NOT HAVE BEEN I FORMED BY SPLITTING UP OR RECONSTRUCTION OF AN EXISTING BUSINESS. IN THE PRESENT J CASE THE APPELLANT IS SATISFYING BOTH THE CONDITIONS AND THERE IS NO REASON WHY J IT SHOULD NOT BE ALLOWED THE DEDUCTION UNDER SECTION 10 A. THE AO HAS RELIED ON THE JUDGEMENT OF HONOURABLE DELHI HIGH COURT IN THE CASE OF REGENCY CREATIONS. THE JUDGEMENT IS NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE A S IN THAT CASE THE APPELLANT HAD CLAIMED .DEDUCTION UNDER SECTION 10 B. WHEREAS IT WAS ENTITLED.LOR DEDUCTION UNDER SECTION 10 A. THE HONOURABLE COURT HELD THAT IF THE ASSESSEE WAS ENTITLED FOR DEDUCTION IN A PARTICULAR SECTION IT CANNOT BE ALLOWED THE DED UCTION UNDER THE OTHER SECTION. ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 8 HOWEVER, WHILE DECIDING THE MA ARISING OUT OF THE ORDER IN THE CASE OF REGENCY CREATIONS (SUPRA ) THE HONOURABLE DELHI HIGH COURT IN IT A NO. 439 /2012 IN THE CASE OF VALIANT COMMUNICATIONS LIMITED HAS HELD THAT THAT THE ALT ERNATIVE CLAIM UNDER SECTION 10 A SHOULD BE EXAMINED ON MERITS IF ASSESSEE WAS NOT HELD ENTITLED TO THE BENEFITS OF SEC. 10B OF THE ACT BUT TO A RIGHT CLAIM UNDER SECTION 10 A THEREFORE, THERE IS NO REASON THE CLAIM SHOULD BE ALLOWED. THE ONLY OBJECTION CA N BE THAT THE APPELLANT WOULD NOT GET THE DEDUCTION FOR FURTHER 10 YEARS FROM THE YEAR OF FIRST CLAIM. THE APPELLANT HAS ITSELF SHOWN IN THE RELEVANT FORM THAT IT WAS THE EIGHTH YEAR OF CLAIM AND ACCORDINGLY THE INTENTION OF THE APPELLANT IS NOT TO CLAIM T HE DEDUCTION FOR FURTHER 10 YEARS . EVEN OTHERWISE THE APPELLANT WOULD NOT BE ENTITLED FOR DEDUCTION FOR 10 YEARS AS IT HAS ALREADY MADE THE CLAIM UNDER SECTION 10B FOR INITIAL EIGHT YEARS. THE APPELLANT ON THE OTHER HAND HAS PLACED RELIANCE ON CERTAIN DE CISIONS WHICH ARE RELATED TO GRANT OF DEDUCTION UNDER SECTION 10 A. THE APPELLANT HAS ALSO SUBMITTED THAT KEEPING IN VIEW THE DECISION OF HONOURABLE GUJARAT HIGH COURT IN CASE OF SAURASHTRA CEMENT AND CHEMICALS INDUSTRIES LTD 123ITR669 IT SHOULD BE ALLOWED THE DEDUCTION ON THE FACT THAT ONCE THE DEDUCTION HAS BEEN ALLOWED IN THE FIRST YEAR OF OPERATION IT CANNOT BE DENIED IN THE SUBSEQUENT YEAR. AS HAS BEEN DISCUSSED IN THE PRECEDING DISCUSSION THE APPELLANT SATISFIES ALL THE CONDITIONS AND IS ACCORDINGLY E NTITLED FOR DEDUCTION UNDER SECTION 10 A. IT HAS ALSO SUBMITTED THAT IT SATISFIES ALL THE CONDITIONS RELATED TO THE CLAIM OF DEDUCTION UNDER SECTION 10A AND ACCORDINGLY THE SAME SHOULD BE ALLOWED. IN VIEW OF THE ABOVE DISCUSSION I AM OF THE CONSIDERED OPI NION THAT THE APPELLANT IS ENTITLED FOR DEDUCTION UNDER SECTION 10 A, WHICH HAS BEEN RIGHTLY CLAIMED IN THE RETURN OF INCOME. THE ADDITIONAL GROUNDS RAISED BY THE APPELLANT HAVE ALSO BEEN EXAMINED AND IT IS NOTED THAT SINCE THE CLAIM OF THE APPELLANT UNDE R SECTION 10 A HAS BEEN A/LOWED, THERE IS NO NEED TO DECIDE THE ADDITIONAL GROUNDS. THE APPELLANT IS ENTITLED FOR DEDUCTION UNDER SECTION 10A AS IT IS A UNIT REGISTERED UNDER STP AND IT FULFILS ALL THE CONDITIONS PRESCRIBED IN THE SECTION. IN MY CONSIDERED OPINION THE GROUNDS NOW RAISED BY THE APPELLANT ARE OF ACADEMIC NATURE AND THEREFORE, NEED NOT BE DECIDED. EVEN OTHERWISE THE CLAIM OF THE APPELLANT UNDER SECTION 10B HAS TO BE ALLOWED BY FOLLOWING THE RULES OF CONSISTENCY AND THE FACT THAT THE ISSUE HAS BEEN SETTLED BY THE ORDERS OF THE IT AT AHMEDABAD IN EARLIER YEARS. 8. WE FURTHER OBSERVE THAT ID. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FACT THAT THE ISSUE RAISED IN THESE APPEALS IS SQUARELY COVERED BY THE JUDGMENT OF HON. JURISDICTIONAL HIGH COURT IN THE CASE OF SAURASHTRA CEMENT & CHEMICALS INDUS. LTD. (SUPRA) RELIED ON BY THE ID. COMMISSIONER OF INCOME TAX(A). IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND RESPECTFULLY FOLLO WING THE JUDGMENT OF HON. JURISDICTIONAL HIGH COURT IN THE CASE OF SAURASHTRA CEMENT & ITA NO.2487 /AHD/2014 ASSTT. YEAR 2011 - 1 2 9 CHEMICALS INDUS. LTD. (SUPRA) AND THE ASSESSEE FAVORING DECISION OF THE CO - ORDINATE BENCH IN PREVIOUS ASST. YEARS AND ALSO IN THE LIGHT OF THE FACTS THAT ASSESSEE HAS FU LFILLED ALL THE ELIGIBILITY CRITERIA FOR CLAIMING EXEMPTION U/S 10A OF THE ACT, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF ID. COMMISSIONER OF INCOME TAX(A). WE UPHOLD THE SAME. ACCORDINGLY, BOTH THE APPEALS OF REVENUE FOR ASST. YEARS 2008 - 09 AND 200 9 - 10 ARE DISMISSED. 12 . RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE BENCH AND IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND OUR DISCUSSIONS MADE ABOVE , WE ARE OF THE VIEW THAT ASSESSEE HAS RIGHTLY CLAIMED THE DEDUCTION OF RS.90,22,677/ - U/S. 10A OF THE ACT. WE THEREFORE FIND NO REASONS TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND UPHOLD THE SAME. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. 13 . OTHER GROUNDS ARE GENERAL IN NATURE WHICH NEEDS NO ADJUDICATION. ORDER PRONOUNCED IN THE COURT ON 8 TH MAY , 2017 AT AHMEDABAD. SD/ - SD/ - ( RAJPAL YADAV ) JUDICIAL MEMBER (MANISH BORA D ) ACCOUNTANT MEMBER TRUE COPY AHMEDABAD; DATED 08 / 05 /2017 MANISH / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , / DR, ITAT, 6. / GUARD FILE .