Essel Shyam Communication Ltd., New Delhi V. ACIT, New Delhi

ITA 254/DEL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2711 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 15-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST D ATED
• Keywords: Opportunity of being heard
• Section: 14A

Judgement Text

1 ITA NO. 254/DEL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 254/DEL/2013 (ASSESSMENT YEA R-2007-08) ESSEL SHYAM COMMUNICATION LTD. C-138, NARAINA INDUSTRIAL AREA, PHASE-1 NEW DELHI AAACE2299Q (APPELLANT) VS ACIT CENTRAL CIRCLE-2 NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 30/11/2012 BY LD. CIT (A), III, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX [(CITA )] IS BAD BOTH IN THE EYE OF LAW AND ON FACTS. APPELLANT BY SH. VED JAIN, CA, SH. PRANJAL RESPONDENT BY SH. AMRIT LAL, SR. DR, SRIVASTAVA, ADV DATE OF HEARING 10.12.2015 DATE OF PRONOUNCEMENT 04.01.2016 2 ITA NO. 254/DEL/2013 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A) IS BAD BOTH IN THE EYE OF LAW AND ON FACTS AS THE SAME HAS BEEN PASSED WITHOUT GIVING ASSESSE AN OPPORTUNITY OF BEING HEARD. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LD. CIT(A) IS LIABLE TO THE SET ASIDE AS THE NON-APPEARANCE WAS BY REASON BEYOND THE CONTROL OF THE ASSESSEE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING TH E ACTION OF THE A.O IN RESTRICTING DEDUCTION U/S 80IA TO RS.7,82,58,603/- AS AGAINST RS.11,56,22,645/- CLAIM ED BY THE ASSESSEE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING TH E ACTION OF THE A.O IN EXCLUDING AN AMOUNT OF RS.3,62,19,389 /- ON ACCOUNT OF PROFIT FROM TRADING ACTIVITIES WHILE COM PUTING DEDUCTION U/S 80IA OF THE ACT. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE A.O IN EXC LUDING THE GROSS AMOUNT OF INTEREST WITHOUT EXCLUDING THE PROPORTIONATE EXPENSES INCURRED TOWARDS EARNING SUC H INTEREST INCOME WHILE COMPUTING INCOME ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT. 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING A DISALLOWANCE OF RS.9,79,917/- MADE BY THE A.O INVOK ING THE PROVISION OF RULE 8D U/S 14A OF THE ACT. 2. THE ASSESSEE COMPANY AS IN THE PAST IS ENGAGED I N THE BUSINESS OF PROVIDING SATELLITE BASED TELECOMMUNICA TION SOLUTIONS INCLUDING VSAT SERVICES, UNLINKING SERVICES, PLAY O UT SERVICES AND BROADBAND SERVICES THROUGH THE SATELLITE. THE ASSE SSEE HAS SHOWN 3 ITA NO. 254/DEL/2013 INCOME FROM SALES, SERVICE INCOME BESIDES FROM OTHE R SOURCES. GROSS TOTAL INCOME AFTER ADJUSTMENT IN COMPUTATION OF INCOME HAS BEEN SHOWN AT RS.11,56,22,645/-. AGAINST THIS, ASS ESSEE HAS CLAIMED DEDUCTION U/S 80IA (4) (II) OF I. T. ACT AM OUNTING TO RS. 11,56,22,645/-. THE ASSESSING OFFICER DISALLOWED TH E SAID DEDUCTION ON THE GROUND THAT THE SAME FOR THE ASSES SMENT YEAR 2006-07 THE ASSESSING OFFICER HAS HELD THAT ASSESSE E IS NOT ENTITLED TO DEDUCTION ON TRADING ACTIVITIES AND INTEREST INC OME ETC. AND CIT(A) CONFIRMED THE SAID VIEW. 3. THE CIT(A) HAS PASSED EX-PARTE ORDER WITHOUT HEA RING TO THE ASSESSEE OR ITS REPRESENTATIVE. 4. THE LD. AR SUBMITTED THAT AS PER ASSESSEES PAPE R BOOK AT PAGE 147, 148, THE CIT(A) FOR ASSESSMENT YEAR 2006- 07 DIRECTED THE ASSESSING OFFICER TO INCLUDE THE RECEIPT REPRESENTI NG INCOME FROM SALE OF EQUIPMENT IN THE ELIGIBLE RECEIPT FOR GRANT OF DEDUCTION U/S. 80IA OF THE ACT AND ALLOWED THE DEDUCTION ON THE GR OUND THAT ITAT IN THE AY 2005-06 HAS ALLOWED THE SAME. 5. THE LD. DR RELIED UPON THE ORDERS OF THE ASSESSI NG OFFICER AND CIT(A). 4 ITA NO. 254/DEL/2013 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE ORDERS OF CIT (A) AS WELL AS THE ASSESSMENT ORDER AND COME TO THE CONCLUSION THAT THE FACTUAL POSITION WAS NOT CORRECTLY SET OUT BY THE CIT(A) AND ASSESSING OFFICER. THE MATTER IS REMANDED BACK TO THE CIT (A) FOR TAKING THE CORRECT POSITION OF THE FACTUAL ASPECT A ND DECIDING THE SAME AFTER GIVING PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 7. IN RESULT, THE APPEAL IS PARTLY ALLOWED FOR STAT ISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 4TH OF JANUARY 2016. SD/- SD/- ( S. V. MEHROTRA) (SUCH ITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 04/01/2016 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO. 254/DEL/2013 DATE 1. DRAFT DICTATED ON 10.12.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 11.12.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .12.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. .12.2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 04.01.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON .01.2016 PS 7. FILE SENT TO THE BENCH CLERK 05.01.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER. 6 ITA NO. 254/DEL/2013