Income Tax Officer, Ward-1 (1), Panaji,Goa., Panaji V. M/s Goa India Energy Pvt. Ltd., Panaji

ITA 311/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93484 (ITAT-PANAJI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 08-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEHBOOB ALI KHAN
• Assessee Lawyers: RAGHU PIKALE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , HONBLE ACCOUNTANT MEMBER ITA NO. 311 /PNJ/2014 (ASST. YEAR : 20 1 0 - 1 1 ) ITO, WARD - 1(1), PANAJI. VS. M/S. GOA INDIA ENERGY PVT. LTD., 810, 4 TH FLOOR, NAVELKAR TRADE CENTRE, OPP. AZAD MAIDAN, PANAJI GOA. PAN NO. AACCG 3322 J (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAGHU PIKALE - CA DEPARTMENT BY : SHRI MEHBOOB ALI KHAN - DR DATE OF HEARING : 1 6 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 16 / 0 6 /201 5 . O R D E R PER N.K. BILLAIYA THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF L D.CIT (A), PANAJI, DATED 2 7 /0 6 /201 4 PERTAINING TO A.Y. 20 1 0 - 1 1 . 2. THE SOLE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S. 10A OF THE ACT. 2 ITA NO. 311 /PNJ/2014 3. ASSESSEE IS IN THE BUSINESS OF EXPORT OF COMPUTER SOFTWARE. RETURN FOR THE YEAR WAS FILED DECLARING INCOME AS NIL . THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER CASS . THE ASSESSEE WAS ASKED TO JUSTIFY ITS CLAIM OF DEDUCTION U/S. 10A OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, THE ASSESSING OFFICER F O RMED BELIEF THAT - (I ) THERE IS NO BUYER - SELLER RELATIONSHIP BETWEEN THE ASSESSEE AND ITS PRINCIPALS . (II) THE RELATIONSHIP IS THAT OF A PRINCIPAL AND CONTRACTOR . (III) THE ASSESSEE DOES NOT HAVE INTELLECTUAL RIGHT OVER THE SOFTWARE DEVELOPED BY IT. (IV) THE EXEMPTION U/S. 10A IS AVAILABLE ON EXPORT OF SOFTWARE AND IN THIS CASE , SINCE BUYER - SELLER RELATIONSHIP IS ABSENT, IT CANNOT BE SAID THAT ANY EXPORT OF SOFTWARE HAS BEEN MADE, EXPORT MEANS EXPORT SALES. THE ASSESSING OFFICER CONCLUDED THE ASSESSMENT BY DISALLOWING THE CLAIM OF EXEMPTION U/S.10A OF THE ACT. 4 . AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A) AND EXPLAINED THE NATURE OF ITS BUSINESS. BEFORE THE LD.CIT(A) , THE ASSESSEE EXPLAINED THE MEANING OF COMPUTER SOFTWARE IN THE LIGHT OF NOTIFICATION NO. 890 (E) DATED 26/09/2000 ISSUED BY THE CBDT F URTHER SUPPORTED BY NOTIFICATION NO. 11521 /F. NO. 142/49/2000 . IT WAS EXPLAINED TO THE LD. CIT(A) THAT THIS NOTIFICATION HAS FURTHER EXPANDED THE SCOPE OF MEANING OF SOFTWARE TO INCLUDE WITHIN ITS AMBIT 3 ITA NO. 311 /PNJ/2014 SERVICES OF THE NATURE MENTIONED IN THE NOTIFICATION. BEFORE THE LD.CIT(A) RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF ACIT VS. MERIDIAN ENTERPRISES COMPUTING SOLUTION P. LTD. [ 5 TAXCORP (A.T.) 24096 ] AND ISBC CONSULTANCY SERVICES LTD. VS. DCIT [ 88 ITD 134 ] (MUMBAI ) . AFTER CONSIDERING THE FACTS AND DETAIL ED SUBMISSIONS MADE BY THE ASSESSEE, THE LD. CIT(A) OBSERVED THAT FOR CLAIM OF EXEMPTION U/S. 10A OF THE ACT WHAT IS MATERIAL IS THERE HAS TO BE MANUFACTURE OF SOFTWARE AND IT SHOULD BE EXPORTED ABROAD . DRAWING SUPPORT FROM THE NOTIFICATION OF THE CBDT NO. 890(E) DATED 26/09/2000 , LD. CIT(A) OBSERVED THAT SOFTWARE HAS BEEN GIVEN A VERY WIDE MEANING WHICH INCLUDES EVEN BACK - OFFICE OPERATIONS . DRAWING SUPPORT FROM THE DECISIONS OF THE TRIBUNAL (SUPRA) , LD. CIT(A) HELD THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DENYING THE CLAIM OF EXEMPTION U/S. 10A OF THE ACT. 5. AGGRIEVED BY THIS, REVENUE IS BEFORE US. 6. LEARNED DR STRONGLY SUPPORTED THE ASSESSMENT ORDER. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN STATED BEFORE THE LOWER AUTHORITIES . 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS TH A T THE ASSESSEE IS EXPORTING THE SO FTWARE. THE 4 ITA NO. 311 /PNJ/2014 PROVISIONS OF SEC.10A CLEARLY PROVIDES FOR DEDUCTION OF SUCH PROFITS AND GAINS AS ARE DERIVED BY AN UNDERTAKING FROM THE EXPORT OF COMPUTER SOFTWARE FOR A PERIOD OF 10 CONSECUTIVE ASSESSMENT YEARS. THUS, THE PRE - CONDITIONS FOR AVAILING THE BENEFIT OF SEC. 10A ARE COMPUTER SOFTWARE AND EXPORT. BOTH THESE CONDITIONS HAVE BEEN FULFILL ED BY THE ASSESSEE. THE OBSERVATION MADE BY THE ASSESSING OFFICER IN DENYING THE CLAIM OF DEDUCTION (SUPRA) DOES NOT HOLD ANY WATER. WE, THEREFORE , DECLINE TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN T HE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 1 6 TH JUNE , 201 5 ). S D / - S D / - ( GEORGE MATHAN ) ( N.K. BILLA I YA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 7 T H JUNE , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 5 ITA NO. 311 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 6 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 6 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 7 /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 7 /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 7 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 1 6 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 17 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER