Jay Chemical Industries Ltd., Ahmedabad V. The Income Tax Officer, Intl. Taxn.-II, Ahmedabad

ITA 255/AHD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9211 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 07-02-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 02-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Double taxation relief; Permanent establishment
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 201(1); 195; 201; 9(1); 9(1); 9(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD I BENCH BEFORE: SHR I R. P. TOLANI , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER JAY CHEMICAL INDUSTRIES LTD, AHMEDABAD JAY HOUSE PANCHVATI, AHMEDABAD - 380006 PAN: AAACJ7628J (APPELLANT) VS THE ITO (INTL. TAX N - II), NAVJIVAN TRUST BUILDING, ASHRAM ROAD, AHMEDABAD - 380009 (RESPONDENT) REVENUE BY : S H RI RAKESH JHA , SR. D . R. ASSESSEE BY: S H RI NIMESH WAY AWALA , A.R. DATE OF HEARING : 07 - 02 - 2 017 DATE OF PRONOUNCEMENT : 17 - 02 - 2 017 / ORDER P ER : AMARJIT SI NGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2013 - 14 , AR IS ES FROM ORDER OF THE CIT(A) - 13, AHMEDABAD DATED 05 - 01 - 2016 IN APPEAL NO. CIT(A) - 13/AHD/114/2014 - 05 , IN PROCEEDINGS UNDER SECT ION 201(1 ) & 201(1A) OF THE INCOME TAX ACT, 1961; IN SHO RT THE ACT . I T A NO . 255 / A HD/20 16 A SSE SSMENT YEAR 2013 - 14 I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 2 2. THE ASSES SEE HAS RAISED FOLLOWING GROUND OF APPEAL: - THE IRD CIT APPEAL HAS ERRED IN HOLDING THE PAYMENT FOR PURCHASE OF SOFTWARE SIMPLICITER IS ROYALTY AND HENCE LIABLE TO TAX VIDE SECTION 195 OF THE INCOME TAX ACT. LT OUGHT TO BE HEL D THAT THE PAYMENT IS NOT IN THE NATURE OF ROYALTY BUT IN THE NATURE OF BUSINESS INCOME ANS HENCE NIT LIABLE TO TAX AS THE PAYEE HAS NO PERMANENT ESTABLISHMENT IN INDIA. 3 . THE BRIEF FACTS OF THE CASE IS THAT THAT ASSESSEE COMPANY HAD MADE REMITTANCES OF RS. 2 , 39 , 109/ - TO THE COMPANY NAMED M/S. DR. WIRT H SOFTWARE GM BH, GERMANY FOR PURCHASES OF SOFTWARE NAMED RIP MASTER AT BUSINESS PLACE OF THE ASSESSEE IN AHMEDABAD. THE ASSESSING OFFICER PRIMA FACIE OBSERVED THAT THE KIND OF REMITTANCES MADE BY THE ASS ESSEE TO THE NON - RESIDENT COMPANY WAS OF THE NATURE OF ROYALTY PAYMENT . T HEREFORE , HE WAS OF THE OPINION THAT ASSESSEE WAS REQUIRED TO DEDUCT TAX ON THE AFORESAID REMITTANCE S ACCORDING TO THE PROVISION OF SECTION 195 OF THE ACT. IN VIEW OF THIS, THE AS SESSING OFFICER ISSUED SHOW CAUSE NOTICE DATED 14 TH FEBRUARY, 2014 TO THE ASSESSEE STATING TO SHOW CAUSE AS TO WHY REMITTANCES MADE TO NON - RESIDENT MAY NOT BE CONSIDERED TO BE A PAYMENT IN THE NATURE OF ROYALTY U/S. 9(I)(VI) OF THE ACT . IT WAS ALSO MENTIO NED TO SHOW CAUSE WHY THE ASSESSEE MAY NOT BE TREATED TO BE ASSESSEE IN DEFAULT TO DETERMINE TAX U/S. 201(1) AND INTEREST U/S. 201(1)( IA ) OF THE ACT. IN RESPONSE TO THE SHOW CAUSE , THE ASSESSEE SUBMITTED ITS SUBMISSION REGARDING DETAIL AND NATURE OF SOFTWARE SUPPLIED BY THE NON - RESIDENT TO THE ASSESSEE COMPANY. IT WAS DESCRIBED THAT THE RIT MASTE R SOFTWARE WAS RIP (RASTER IMAGER PROCESSORS) ALLOWING I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 3 USER TO DIGITAL LY PRINT THEIR DESIGN S ON THE INKJET PRINTER AND WAS A WINDOW BASED SOLUTION. THE AS SESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE THAT THEY HAVE RECEIVED A COPYRIGHTED ARTICLE AND HAVE NOT RECEIVED ANY RIGHTS IN THE COPYRIGHT. ASSESSING OFFICER FURTHER STATED THAT SUCH DESCRIPTION OF THE SOFTWARE WAS SUFFICIENT TO PROVE THE TECHNICAL AND COMPLEX NATURE OF SUCH SOFTWARE WHICH IMPLIES THAT THE SOFTWARE WAS INDEED MADE FOR CUSTOMERS OF SPEC IFIC NEEDS AND CANNOT BE EQUATED WITH OVER COUNTER SOFTWARE SALE. THE ASSESSING OFFICER FURTHER STATED THAT FOR T HIS SOFTWARE SUPPLIERS LICEN S E WAS REQUIRED WHICH RECOGNIZED AS SOFTWARE , LICENCE FILE AND PHYSICAL D ONGAL , WHICH WAS EXCLUSIVELY PROVIDED FOR SINGLE USER. HE AGAIN STATED THAT SUCH LICEN S E FILE AND PHYSICAL DONGLE PROTECT THE SOFTWARE FROM BEING USED WITHOU T AUTHORIZATION OR COPIED ILLEG ALLY. THE ASSESSING OFFICER STATED THAT THE ARGUMENT OF THE ASSESSEE THAT PAYMENT MADE FOR PURCHASE OF SOFTWARE CANNOT BE REGARDED AS ROYALTY WAS NOT ACCEPTABLE BECAUSE UNDER ARTICLE 12(3) DTAA BETWEEN INDIA AND GERMANY AS WELL AS PER THE PROV ISION OF SECTION 9(1)(VI) OF THE ACT, I T WAS HEL D THAT LICEN S ING WAS MERELY FOR USE OF SOFTWARE WHICH AMOUNT TO ROYALTY. HE ALSO REF ER ABOUT THE PROVISION S OF THE COPY RIGHT ACT IN HIS ORDER. HE FURTHER STATED THAT IT IS THE TRANSFER OF THE RIGHT IN A WORK WHICH LEAD S TO A PAYMENT OF ROYALTY . . HE CONCLUDED THAT AS THE A SSESSEE HAD FAILED TO WITHHOLD TAX TO SUCH REMITTANCE AND IT WAS TREATED TO BE AN ASSESSEE IN DEFAULT U/S. 201(1) FOR ITS FAILURE TO DEDUCT WITHHOLDING TAX FROM THE PAYMENT MADE TO THE NON - RESIDENT AS REQUIRED U/S. 195 OF THE I.T. ACT, 1961. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE LD. CIT(A) I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 4 HAS SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: - 5. I HAVE PERUSED THE ORDER OF THE A.O. AND SUB MISSIONS MADE IN THIS REGARD. IN THE FACTS OF THE PRESENT CASE, I AM OF THE VIEW THAT THE CONTENTION OF THE A.O. IS CORRECT IN TREATING A PAYMENT OF RS. 2,39,109/ - TO THE NON - RESIDENT COMPANY AS ROYALTY PAYMENT. THE A.O. IS CORRECT IN HOLDING THAT THIS SOF TWAR E IS A HIGHLY SPECIALIZED SOFTW ARE, WHICH DELIVERS UNIQUE OUTPUT. IT IS FURTHER NOTICE WORTHY THAT THE ARTICLE 12 (3) OF DTAA BETWEEN INDIA AND GERMANY, DEFINES SUCH PAYMENTS AS ROYALTY PAYMENT. I AM ALSO INCLINED TO AGREE WITH THE DEFINITION OF THE PR OVISIONS OF SECTION 9(1) (VI) MAKING SUCH PAYMENTS AS ROYALTY PAYMENT. CONSIDERING THE ABOVE, I AM INCLINED TO CONCLUDE THAT THE A.O. HAS RIGHTLY TREATED SUCH PAYMENTS AS ROYALTY PAYMENTS AND WITHHOLDING TAX WAS TO BE MADE AS PER THE RELEVANT REVISIONS OF THE I.T. ACT. THE GROUND RAISED BY THE AP PELLANT IS THEREFORE, DISMISSED. 4. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LEARNED COUNSEL CONTENDED THAT LD. CIT(A) HAS ERRED IN HOLDING THE PAYMENT FOR PURCHASE OF SOFTWARE AS ROYALTY LIABLE T O DEDUCT TAX U/S. 195 OF THE ACT. HE FURTHER STATED THAT THE ASSESSEE CANNOT MAKE THE COPY OF THE SOFTWARE AND HAS NO RIGHT TO MAKE ANY MODIFICATION TO THE SAME AND THESE FACTS WERE NOT CONSIDERED BY THE LD. CIT(A). HE ALSO PLACED RELIANCE IN THE CASE S O F [2017] 77 TAXMANN.COM 309 (AHMEDABAD - TRIB) ITO(INTL. TAXN . ) VS. CADILA HEALTHCARE LTD, [2017] 56 TAXMANN.COM 179 (DELHI TRIB.) QUALCOMM INCORPORATED VS. ADIT (INTL. TAXN.). ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF LOW ER AUTHORITIES. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. WE HAVE ALSO PERUSED THE JUDICIAL PRONOUNCEMENTS RELIED I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 5 UPON BY THE ASSESSEE. IN THE CASE OF L & T VS. ITO 46 TAXMANN.COM 52 (AHMEDABAD - TRIB), DIRECTOR OF INCOME TAX VS. INFRASOFT LTD 39 TAXMANN.COM 88 (DELHI), DDIT VS. SOLID WORKS CORPN. 18 TAXMANN.COM 189 (MUM.), THE DELHI HIGH COURT CLEARLY HELD THAT IF THE LICEN SE IS NOT INCLUSIVE, NON - TRAN S FERABLE, NO RIGHT GIVEN TO MAKE COPIES OF THE SAME, IT CANNOT BE CONSIDERE D TO USE COPYRIGHT, THE PAYMENT HAS TO BE USED FOR COPYRIGHT AND NOT FOR COPYRIGHTED ARTICLE. T HE PART OF THE OEC D COMMENTARY ON ARTICLE 12 RELATING TO TAXATION OF ROYALTY IS REPRODUCED AS UNDER: - 14. IN OTHER TYPES OF TRANSACTIONS, THE RIGHTS ACQUIRED I N RELATION TO THE COPYRIGHT ARE LIMITED TO THOSE NECESSARY TO ENABLE THE USER TO OPERATE THE PROGRAM, FOR EXAMPLE, WHERE THE TRANSFEREE IS GRANTED LIMITED RIGHTS TO REPRODUCE THE PROGRAM. THIS WOULD BE THE COMMON SITUATION IN TRANSACTIONS FOR THE ACQUISITI ON OF A PROGRAM COPY. THE RIGHTS TRANSFERRED IN THESE CASES ARE SPECIFIC TO THE NATURE OF COMPUTER PROGRAMS. THEY ALLOW THE USER TO COPY THE PROGRAM, FOR EXAMPLE ONTO THE USER'S COMPUTER HARD DRIVE OR FOR ARCHIVAL PURPOSES. IN THIS CONTEXT, IT IS IMPORTANT TO NOTE THAT THE PROTECTION AFFORDED IN RELATION TO COMPUTER PROGRAMS UNDER COPYRIGHT LAW MAY DIFFER FROM COUNTRY TO COUNTRY. IN SOME COUNTRIES THE ACT OF COPYING THE PROGRAM ONTO THE HARD DRIVE OR RANDOM ACCESS MEMORY OF A COMPUTER WOULD, WITHOUT A LICEN SE, CONSTITUTE A BREACH OF COPYRIGHT. HOWEVER, THE - COPYRIGHT LAWS OF MANY COUNTRIES AUTOMATICALLY GRANT THIS RIGHT TO THE OWNER OF SOFTWARE WHICH INCORPORATES A COMPUTER PROGRAM. REGARDLESS OF WHETHER THIS RIGHT IS GRANTED UNDER LAW OR UNDER A LICENSE AGRE EMENT WITH THE COPYRIGHT HOLDER, COPYING THE PROGRAM ONTO THE COMPUTER'S HARD DRIVE OR RANDOM ACCESS MEMORY OR MAKING AN ARCHIVAL COPY IS AN ESSENTIAL STEP IN UTILISING THE PROGRAM. THEREFORE, RIGHTS IN RELATION TO THESE ACTS OF COPYING, WHERE THEY DO NO M ORE THAN ENABLE THE EFFECTIVE OPERATION OF THE PROGRAM BY THE USER, SHOULD BE DISREGARDED IN ANALYSING THE CHARACTER OF THE TRANSACTION FOR TAX PURPOSES. PAYMENTS IN THESE TYPES OF TRANSACTIONS WOULD BE DEALT WITH AS COMMERCIAL INCOME IN ACCORDANCE WITH AR TICLE 7. I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 6 14.1 THE METHOD OF TRANSFERRING THE COMPUTER PROGRAM TO THE TRANSFEREE IS NOT RELEVANT. FOR EXAMPLE, IT DOES NOT MATTER WHETHER THE TRANSFEREE ACQUIRES A COMPUTER DISK CONTAINING A COPY OF THE PROGRAM OR DIRECTLY RECEIVES A COPY ON THE HARD DISK OF HER COMPUTER VIA A MODEM CONNECTION. IT IS ALSO OF NO RELEVANCE THAT THERE MAY BE RESTRICTIONS ON THE USE TO WHICH THE TRANSFEREE CAN PUT THE SOFTWARE. 14.2 THE EASE OF REPRODUCING COMPUTER PROGRAMS HAS RESULTED IN DISTRIBUTION ARRANGEMENTS IN WHICH TH E TRANSFEREE OBTAINS RIGHTS TO MAKE MULTIPLE COPIES OF THE PROGRAM FOR OPERATION ONLY WITHIN ITS OWN BUSINESS. SUCH ARRANGEMENTS ARE COMMONLY REFERRED TO AS 'SITE LICENCES', 'ENTERPRISE LICENSES', OR 'NETWORK LICENCES'. ALTHOUGH THESE ARRANGEMENTS PERMIT T HE MAKING OF MULTIPLE COPIES OF THE PROGRAM, SUCH RIGHTS ARE GENERALLY LIMITED TO THOSE NECESSARY FOR THE PURPOSE OF ENABLING THE OPERATION OF THE PROGRAM ON THE LICENSEE'S COMPUTERS OR NETWORK, AND REPRODUCTION FOR ANY OTHER PURPOSE IS NOT PERMITTED UNDER THE LICENSE. PAYMENTS UNDER SUCH ARRANGEMENTS WILL IN MOST CASES BE DEALT WITH AS BUSINESS PROFITS IN ACCORDANCE WITH ARTICLE 7. 14.3 ANOTHER TYPE OF TRANSACTION INVOLVING THE TRANSFER OF COMPUTER SOFTWARE IS THE MORE UNUSUAL CASE WHERE A SOFTWARE HOUSE OR COMPUTER PROGRAMMER AGREES TO SUPPLY INFORMATION ABOUT THE IDEAS AND PRINCIPLES UNDERLYING THE PROGRAM, SUCH AS LOGIC, ALGORITHMS OR PROGRAMMING LANGUAGES OR TECHNIQUES. IN THESE CASES, THE PAYMENTS MAY BE CHARACTERISED AS ROYALTIES TO THE EXTENT THAT T HEY REPRESENT CONSIDERATION FOR THE USE OF, OR THE RIGHT TO USE, SECRET FORMULAS OR FOR INFORMATION CONCERNING INDUSTRIAL, COMMERCIAL OR SCIENTIFIC EXPERIENCE WHICH CANNOT BE SEPARATELY COPYRIGHTED. THIS CONTRASTS WITH THE ORDINARY CASE IN WHICH A PROGRAM COPY IS ACQUIRED FOR OPERATION BY THE END USER. 14.4 ARRANGEMENTS BETWEEN A SOFTWARE COPYRIGHT HOLDER AND A DISTRIBUTION INTERMEDIARY FREQUENTLY WILL GRANT TO THE DISTRIBUTION INTERMEDIARY THE RIGHT TO DISTRIBUTE COPIES OF THE PROGRAM WITHOUT THE RIGHT TO REPRODUCE THAT PROGRAM. IN THESE TRANSACTIONS, THE RIGHTS ACQUIRED IN RELATION TO THE COPYRIGHT ARE LIMITED TO THOSE NECESSARY FOR THE COMMERCIAL INTERMEDIARY TO DISTRIBUTE COPIES OF THE SOFTWARE PROGRAM. IN SUCH TRANSACTIONS, DISTRIBUTORS ARE PAYING ONLY FOR THE ACQUISITION OF THE SOFTWARE COPIES AND N OT TO EXPLOIT ANY RIGHT IN THE SOFTWARE COPYRIGHTS. THUS, IN A TRANSACTION WHERE A DISTRIBUTOR MAKES PAYMENTS TO ACQUIRE AND DISTRIBUTE SOFTWARE COPIES (WITHOUT THE RIGHT I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 7 TO REPRODUCE THE SOFTWARE), THE RIGH TS IN RELATION TO THESE ACTS OF DISTRIBUTION SHOULD BE DISREGARDED IN ANALYSING THE CHARACTER OF THE TRANSACTION FOR TAX PURPOSES. PAYMENTS IN THESE TYPES OF TRANSACTIONS WOULD BE DEALT WITH AS BUSINESS PROFITS IN ACCORDANCE WITH ARTICLE 7. THIS WOULD BE T HE CASE REGARDLESS 7. THIS WOULD BE THE CASE REGARDLESS OF WHETHER THE COPIES BEING DISTRIBUTED ARE DELIVERED ON TANGIBLE MEDIA OR ARE DISTRIBUTED ELECTRONICALLY (WITHOUT THE DISTRIBUTOR HAVING THE RIGHT TO REPRODUCE THE SOFTWARE), OR WHETHER THE SOFTWARE IS SUBJECT TO MINOR CUSTOMISATION FOR THE PURPOSES OF ITS INSTALLATION. THUS THIS PAYMENT IS CONSIDERED AS BUSINESS INCOME THE RECENT DECISION IN THE CASE OF OR CUT VS. M TECH INDIA PVT. LTD. (2016)67 TAXMANN.COM 245(DELHI) THE HON'BLE HIGH COURT OF DELH I HELD IN PARA 12 AS UNDER ' . IN THE CASES WHERE AN ASSESSEE ACQUIRES THE RIGHT TO USE SOFTWARE, THE PAYMENT SO MADE WOULD AMOUNT TO ROYALTY. HOWEVER IN CASES WHERE THE PAYMENTS ARE MADE FOR PURCHASE OF SOFTWARE AS A PRODUCT, THE CONSIDERATION PAID CANNO T BE CONSIDERED TO BE FOR USE OR THE RIGHT TO USE THE SOFTWARE. IT IS WELL SETTLED THAT WHERE SOFTWARE IS SOLD AS A PRODUCT IT WOULD AMOUNT TO SALE OF GOODS. IN THE CASE OF TATA CONSULTANCY SERVICES V. STATE OF ANDHRA PRADESH [2004] 271 ITR 401/141 TAXMAN 132 TAXMAN 132 (SC), THE SUPREME COURT EXAMINED THE TRANSACTIONS RELATING TO THE PURCHASE AND SALE OF SOFTWARE RECORDED ON A CD IN THE CONTEXT OF THE ANDHRA PRADESH GENERAL SALES TAX ACT. THE COURT HELD THE SAME TO BE GOODS WITHIN THE MEANING OF SECTION 2( B) OF THE SAID ACT AND CONSEQUENTLY EXIGIBLE TO SALES TAX UNDER THE SAID ACT. CLEARLY, THE CONSIDERATION PAID FOR PURCHASE OF GOODS CANNOT BE CONSIDERED AS 'ROYALTY'. THUS, IT IS NECESSARY TO MAKE A DISTINCTION BETWEEN THE CASES WHERE CONSIDERATION IS PAID TO ACQUIRE THE RIGHT TO USE A PATENT OR COPYRIGHT AND CASES WHERE PAYMENT IS MADE TO ACQUIRE PATENTED OR A COPYRIGHTED PRODUCT/MATERIAL. IN CASES WHERE PAYMENTS ARE MADE TO ACQUIRE PRODUCTS WHICH ARE PATENTED OR COPYRIGHTED, THE CONSIDERATION PAID WOULD H AVE TO BE TREATED AS A PAYMENT FOR PURCHASE OF THE PRODUCT RATHER THAN CONSIDERATION FOR USE OF THE PATENT OR COPYRIGHT. ' I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 8 5.1 WE OBSERVED THAT UNLESS THE RIGHT IS GIVEN TO REPRODUCE AND PUBLICLY DISTRIBUTE SOFTWARE, THE PAYMENT CANNOT BE CONSIDERED AS RO YALTY . I N THE CASE OF THE ASSESSEE A SIMPLE RIGHT WAS GIVEN TO ENABLE TO ACTIVATE THE PROGRAMME AND TO ENABLE HIM TO COPY IT TO HARDWARE ON ITS COMPUTER AND IT WAS JUST A KIND OF TRANSFER OF COPYRIGHT ARTICLE. KEEPING IN VIEW THE ABOVE MENTIONED FACTS AND LEGAL FINDINGS, WE CONSIDERED THAT PRIMARILY THE ASSESSEE HAS RECEIVED COPYRIGHTED ARTICLE AND HAVE NOT RECEIVED ANY RIGHT IN THE COPYRIGHT , THEREFORE , ASSESSEE IS NOT LIABL E TO DEDUCT TAX U/S 195 OF THE INCOME TAX A CT, 1961. IN VIEW OF THIS, WE FIND TH AT DECISION OF THE LD. CIT(A) IS NOT JUSTIFIED AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 17 - 02 - 201 7 SD/ - SD/ - ( R. P. TOLANI ) ( AMARJ IT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 1 7 /02 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , I.T.A NO. 255 /AHD/20 16 A.Y. 2013 - 14 PAGE NO JAY CHEMICAL INDUSTRIAL LTD. VS. ITO (INT. TAXN. II) 9 / ,