PROTHIOUS ENGINEERING SERVICES P.LTD, MUMBAI V. ITO 8(2)(4), MUMBAI

ITA 3147/MUM/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3262 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Assessee Lawyers: PARAS SAVLA SHRI VIRAJ MEHTA
• Keywords: Reopening of assessment; Depreciation; Transfer pricing; Audit objection; Tangible material; Difference of opinion; Change of opinion
• Section: 143(3); 10B; 147; 148; 139

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO. 3147 /MUM/2014 ( / ASSESSMENT YEAR : 2006-07 PROTHIOUS ENGINEERING SERVICES PRIVATE LIMITED, C-7, EEC HOUSE, 3 RD FLOOR, DALIA INDUSTRIAL ESTATE, OFF NEW LINK ROAD, ANDHERI (WEST), MUMBAI-400 053. / V. INCOME TAX OFFICER, 8(2)(4), 213, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN :AADCP5194J ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY : SHRI PARAS SAVLA, SHRI VIRAJ MEHTA & SHRI PRATIK PODDAR R E VENUE BY : SHRI C.W. ANGOLKAR, DR / DATE OF HEARING : 28.10.2015 / DATE OF PRONOUNCEMENT : 18-01-2016 !' / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER : THIS APPEAL, FILED BY THE ASSESSEE COMPANY, BEING I TA NO. 3147/MUM/2014, IS DIRECTED AGAINST THE ORDER DATED 14-02-2014 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-17, MUMBAI, FOR THE ASSESSMENT YEAR 2006-07. ITA 3147/M/2014 2 2. THE ASSESSEE COMPANY HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL IN THE MEMO OF APPEAL FILED WITH THE TRIBUNAL:- BEING AGGRIEVED BY THE ORDER PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS)-17 [CIT(A)], MUMBAI , YOUR APPELLANT SUBM ITS THE FOLLOWING GROUNDS OF APPEAL FOR SYMPATHETIC CONSIDERATION: 1. THE LEARNED CIT(A) HAS ERRED IN OVERRULING THE OBJE CTIONS AGAINST THE VALIDITY OF INITIATION OF THE PROCEEDINGS UNDER SEC TION 147 OF THE ACT FOR ASSESSMENT OF ALLEGED ESCAPEMENT OF INCOME. WITHOUT PREJUDICE TO THE GENERALITY, THE OBJECTIO NS, SO OVERRULED, ARE AS UNDER: A) THE REASONS RECORDED FOR THE RE-OPENING OF THE ASSE SSMENT, INITIALLY FRAMED UNDER SECTION 143(3), BEYOND FOUR YEARS AFTER THE E ND OF THE RELEVANT ASSESSMENT YEAR, DO NOT ALLEGE THAT THE ASSESSEE HA D FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSE SSMENT. B) NO SPECIFIC FINDING HAS BEEN GIVEN BY THE ASSESSING OFFICER (AO) THAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. C) EVEN OTHERWISE, THE ASSESSEE HAD DISCLOSED FULLY AN D TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. D) THE RE-ASSESSMENT, SO MADE, IS THE RESULT OF MERE C HANGE OF OPINION. E) THE ASSESSEE HAS NOT BEEN PROVIDED WITH THE COPY OF WRITTEN SANCTION, SAID TO HAVE BEEN ACCORDED, UNDER SECTION 151. 2. WITHOUT PREJUDICE TO THE GRIEVANCE AGAINST THE V ALIDITY OF INITIATION OF THE PROCEEDINGS UNDER SECTION 147, THE LEARNED CIT(A) H AS ERRED IN CONFIRMING THE DENIAL OF DEDUCTION UNDER SECTION 10A OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING CIVIL STRUCTURAL DESIGNIN G AND DETAILING SERVICES TO ITS OVERSEAS AFFILIATED US COMPANY. THE RETURN OF INCOME WAS FILED BY THE ASSESSEE COMPANY ON 29-11-2006 WITH THE REVENUE WHI CH WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT,1961 (HEREINAFTER CALLED THE ACT) . THEREAFTER, THE ASSESSMENT U/S. 143(3) OF THE ACT W AS COMPLETED BY THE LEARNED ASSESSING OFFICER (HEREINAFTER CALLED THE AO) ON 28-11-2008. NOTICE ITA 3147/M/2014 3 U/S. 148 OF THE ACT WAS ISSUED TO THE ASSESSEE COMP ANY BY THE AO ON 30-03- 2012 AND SERVED ON THE ASSESSEE COMPANY. IN RESPON SE TO THIS, THE ASSESSEE COMPANY REQUESTED THE AO VIDE LETTER DATED 10-04-20 12 THAT RETURN OF INCOME FILED ON 29-11-2006 BE TREATED AS RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S. 148 OF THE ACT. THE ASSESSEE COMPANY REQUESTE D THE AO TO PROVIDE THE REASONS FOR RE-OPENING VIDE LETTER DATED 10-04-2012 WHICH WERE FURNISHED TO THE ASSESSEE COMPANY BY THE AO VIDE LETTER DATED 14 -12-2012 ALONG WITH NOTICE U/S 143(2) OF THE ACT. THE ASSESSEE COMPANY VIDE LETTER DATED 10-01- 2013 HAS OBJECTED TO THE REOPENING OF ASSESSMENT U/ S. 147 OF THE ACT, WHICH HAS BEEN DISPOSED OFF BY THE AO VIDE ORDERS DATED 2 4-01-2013 PASSED U/S 147 OF THE ACT DISPOSING OF THE OBJECTIONS RAISED B Y THE ASSESSEE COMPANY AND UPHOLDING THE VALIDITY OF INVOKING THE PROVISIONS O F SECTION 147/148 OF THE ACT. THE ASSESSEE COMPANY HAS SET UP THE UNDERTAKI NG AT MUMBAI AND NASHIK. FOR THE YEAR UNDER CONSIDERATION, THE ASSE SSEE COMPANY GOT THE LETTER OF PERMISSION FROM STPI, NAVI MUMBAI ON 19-0 9-2005 FOR 100% EXPORT ORIENTED UNIT (EOU) AT MUMBAI. IT WAS OBSERVED BY THE AO THAT ASSESSEE COMPANY WAS INCORPORATED ON 10 TH MARCH, 2005 AND STARTED RENDERING SERVICES TO ITS A.E. M/S. PROTHIOUS INC, USA FROM APRIL 2005 . THUS, THE AO OBSERVED THAT MANUFACTURING AND EXPORT ACTIVITY FRO M THE MUMBAI UNIT IS ALREADY IN EXISTENCE SINCE APRIL, 2005 AND THE ASSE SSEE COMPANY HAS ALSO CLAIMED DEPRECIATION ON THE FIXED ASSETS FROM 1 ST APRIL 2005 ONWARDS. THE ASSESSEE COMPANY WAS ASKED TO EXPLAIN WHY DEDUCTION U/S.10A OF THE ACT SHOULD NOT BE DISALLOWED AS THE UNDERTAKING AT MUMB AI AND NASIK WAS SET UP FOR MANUFACTURE AND EXPORT OF SOFTWARE SINCE APRIL, 2005, WHILE THE MUMBAI UNDERTAKING GOT LETTER OF PERMISSION FROM STPI, NAV I MUMBAI ON 19-09-2005 FOR 100% EOU AT MUMBAI U/S. 59 & 65 OF THE CUSTOMS ACT FOR MANUFACTURE IN BOND OF COMPUTER SOFTWARE WHICH WAS AN ESSENTIAL REQUIREMENT FOR 100% EOU, SINCE THE MANUFACTURING AND EXPORT ACTIVITY FR OM THE MUMBAI UNDERTAKING IS ALREADY IN EXISTENCE SINCE APRIL, 20 05 AND THE ASSESSEE COMPANY CLAIMED DEPRECIATION OF RS. 15,29,036/- FRO M 01-04-2005 TO 30-09- ITA 3147/M/2014 4 2005 IN RESPECT OF THE MUMBAI UNDERTAKING WHICH AGA IN REINFORCES THAT THE ASSESSEE COMPANY HAD ALREADY ACQUIRED ASSETS AND CO NTINUING WITH MANUFACTURING OF COMPUTER SOFTWARE AND THE DEDUCTIO N U/S 10A OF THE ACT SHOULD BE DISALLOWED. THE ASSESSEE COMPANY SUBMITT ED THAT THERE IS NO CONDITION IN SECTION 10A OF THE ACT THAT DEDUCTION IS ELIGIBLE FROM DATE OF APPROVAL FROM STPI. THE ASSESSEE COMPANY SUBMITTED THAT MUMBAI UNIT IS A NEW UNIT FOR WHICH THE APPROVAL FROM STPI WAS RECEI VED IN THIS YEAR ON 19-09- 2005 AND THEREFORE, IT IS ELIGIBLE FOR THE DEDUCTIO N FROM THIS INITIAL YEAR. THE AO REJECTED THE CONTENTIONS OF THE ASSESSEE COMPANY AND HELD THAT COMPANY RIGHT FROM ITS INCEPTION WAS RENDERING SERVICES TO ITS A.E. M/S. PROTHIOUS INC, USA AND CONTINUED ITS BUSINESS OPERATION WITH THE S AME OLD ESTABLISHMENT, SAME MANAGEMENT, SAME EMPLOYEES, SAME CLIENTS AND T HE OLD AND USED MACHINERY WHICH WAS PREVIOUSLY USED FOR THE ASSESSE E COMPANYS BUSINESS PURPOSE, IT WAS NOT ELIGIBLE FOR ANY DEDUCTION U/S. 10A OF THE ACT. HENCE, THE AO HELD THAT THERE IS NO UNDERTAKING WHICH CAME INT O EXISTENCE AND WITH THE COMPLETION OR OBTAINING OF THE REGISTRATION WITH ST PI, THE SAME OLD ESTABLISHED UNIT HAS CONTINUED WITH ITS USUAL BUSIN ESS. THUS, THE BASIC REQUIREMENT FOR CLAIMING DEDUCTION U/S.10A, THAT TH E UNDERTAKING SHOULD BE NEW, IS NOT SATISFIED ON THE FIRST YEAR OF MAKING T HE CLAIM AND CLAIMING A DEDUCTION U/S.10A OF THE ACT, THE SETTING UP OF THE NEW UNIT AND ITS REGISTRATION UNDER STPI ARE THE TWIN CONDITIONS WHI CH SHOULD BE SATISFIED TO BE ELIGIBLE FOR DEDUCTION U/S.10A OF THE ACT. HENC E, DEDUCTION OF RS.47,13,192/- CLAIMED BY THE ASSESSEE COMPANY U/S 10A WAS DISALLOWED TO THE ASSESSEE COMPANY BY THE AO VIDE ORDERS DATED 04 -03-2013 PASSED U/S 143(3) OF THE ACT READ WITH SECTION 147 OF THE ACT. 4. AGGRIEVED BY THE ORDERS DATED 04-03-2013 OF THE AO PASSED U/S 143(3) OF THE ACT READ WITH SECTION 147 OF THE ACT, THE ASSES SEE COMPANY FILED FIRST APPEAL BEFORE THE CIT(A) AND SUBMITTED THAT RE-ASSE SSMENT PROCEEDINGS ARE NOT JUSTIFIED IN LAW IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE ITA 3147/M/2014 5 CASE OF KELVINATOR OF INDIA LTD., [(2010) 320 ITR 5 61(SC)] AND ALSO RELIED ON THE DECISION OF ITAT, INDORE BENCH IN [302 ITR 42]. LD. AR OF THE ASSESSEE COMPANY ALSO CONTENDED THAT THERE IS ABSENCE OF SAN CTION U/S. 151 OF THE ACT AND ALSO ABSENCE OF ALLEGATION IN THE RECORDED REAS ONS THAT THE ASSESSEE COMPANY DID NOT DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY FOR THE ASSESSMENT. THE AO HAS NOT POINTED OUT THE PRECISE MATERIAL FACTS WHICH WERE NOT DISCLOSED BY THE ASSESSEE COMPANY AND MERE CHANGE OF OPINION OF THE AO WITHOUT ANY TANGIBLE MATERIAL, WHICH HAS SUR FACED AFTER THE CONCLUSION OF THE ASSESSMENT PROCEEDINGS. THE LD. AR ALSO PLA CED RELIANCE ON THE DECISION OF THE ITAT, DELHI BENCH IN THE CASE OF CA DTRIUM ENGINEERING SOLUTIONS (P) LTD., VS. ITO IN ITA NO. 3372/DEL/201 2. THE CIT(A) OBSERVED THAT THE AO HAS ISSUED NOTICE U/S. 148 OF THE ACT A ND CONVEYED THE REASONS FOR REOPENING VIDE LETTER DATED 14-12-2012. THE AS SESSEE COMPANY HAS RAISED OBJECTIONS AGAINST THE REOPENING VIDE LETTER DATED 10/01/2013 , WHICH HAS BEEN DISPOSED OFF BY THE AO BY PASSING A SPEAKING O RDER DATED 24/01/2013 U/S 147 OF THE ACT . THE AO HAS CLEARLY MADE A REF ERENCE IN HIS ORDER DATED 24/1/2013 STATING INTER-ALIA THAT SINCE THE RETURN OF INCOME WAS FILED U/S. 139 OF THE ACT AND THE ASSESSEE COMPANY HAS NOT DIS CLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT FOR THA T YEAR, THEREFORE, THERE IS A PRIMA FACIE EVIDENCE ON RECORD THAT THE INCOME HAS ESCAPED ASSESSMENT BY REASON OF THE OMISSION OR FAILURE ON THE PART OF TH E ASSESSEE COMPANY TO TRULY AND FULLY DISCLOSE THE MATERIAL FACTS. ACCORDINGLY , A NOTICE WAS ISSUED AND SERVED U/S. 148 OF THE ACT AFTER RECORDING SUCH REA SONS WHICH WAS VALID AND LEGAL. THE MANNER IN WHICH THE SPECIFIC REQUIREMEN TS OF LAW, REGARDING RECORDING OF THE REASONS, THE SAME WAS NOT RECORDED . HOWEVER, IT CAN BE IMPLIEDLY INFERRED THAT THE OMISSION WAS ON ACCOUNT OF ASSESSEES FAILURE. THE CIT(A) ALSO OBSERVED THAT PROPER PERMISSION HAS BEE N OBTAINED BY THE AO FROM CIT-8,MUMBAI BEFORE INITIATING PROCEEDINGS U/S 147/148 OF THE ACT. THE CIT(A) OBSERVED THAT AO HAS BROUGHT ON RECORD T HAT ASSESSEE COMPANY SINCE ITS INCEPTION WAS RENDERING SERVICES TO ITS A .E. M/S. PROTHIOUS INC, USA ITA 3147/M/2014 6 AND CONTINUED ITS BUSINESS OPERATION WITH THE SAME OLD ESTABLISHMENT, SAME MANAGEMENT, SAME EMPLOYEES, SAME CLIENTS AND THE OL D AND USED MACHINERY WHICH WAS PREVIOUSLY USED FOR THE ASSESSEE COMPANY S BUSINESS PURPOSE, IT WAS NOT ELIGIBLE FOR ANY DEDUCTION U/S.10A OF THE A CT. THUS, IT PROVES THAT PRE-REGISTERED UNIT WHICH WAS NOT ELIGIBLE FOR CLAI M OF DEDUCTION U/S.10A OF THE ACT, SPECIFICALLY CLAIMED DEDUCTION ON THE BASI S OF A CERTIFICATE. THE ASSESSEE COMPANY WAS INCORPORATED ON 10-03-2005 AND STARTED RENDERING SERVICES TO ITS AE AND THEREFORE THE MANUFACTURING AND EXPORT ACTIVITY FROM THE MUMBAI UNIT WAS ALSO IN EXISTENCE SINCE APRIL, 2005 AND ASSESSEE COMPANY ALSO CLAIMED DEPRECIATION ON THE FIXED ASSE TS. THUS, CIT(A) HELD THAT THERE IS NO NEW INDUSTRIAL UNDERTAKING WHICH CAME INTO EXISTENCE AND THE SAME OLD ESTABLISHED COMPANY CONTINUED TO DO IT S BUSINESS WITH THE SAME CLIENTS AND HENCE, THE CIT(A) HELD THAT ASSESSEE CO MPANY IS CLAIMING DEDUCTION U/S.10A OF THE ACT WHICH CLEARLY ENVISAGE S THE SETTING UP OF NEW INDUSTRIAL UNIT WHICH IN THIS CASE IS NOT THE CASE AND HENCE, THE CLAIM OF DEDUCTION U/S.10 OF THE ACT WAS DENIED TO THE ASSES SEE COMPANY BY THE CIT(A) VIDE ORDERS DATED 14-02-2014. 5. AGGRIEVED BY THE ORDERS DATED 14-02-2014 PASSED BY THE CIT(A), THE ASSESSEE COMPANY FILED APPEAL BEFORE US. 6. THE LD. COUNSEL FOR THE ASSESSEE COMPANY SUBMITT ED THAT THE PROCEEDINGS U/S. 147 AND 148 OF THE ACT HAS NOT BEE N PROPERLY INITIATED AND THE PROCEEDINGS NEED TO BE DROPPED ON THIS SHORT GR OUND ITSELF, THE LD. COUNSEL SUBMITTED THAT ASSESSEE COMPANY FILED ITS R ETURN OF INCOME U/S. 139 OF THE ACT AND THE ASSESSEE COMPANY MADE TRUE AND F ULL DISCLOSURE IN THE RETURN OF INCOME WHICH WAS FILED WITH THE REVENUE. THE CASE WAS ORIGINALLY PROCESSED U/S. 143(3) R.W.S. 143(2) OF THE ACT AND THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS FRAMED BY THE AO DATED 28-11- 2008, WHEREBY THE AO ITA 3147/M/2014 7 HAS DULY CONSIDERED THE CLAIM OF THE ASSESSEE COMPA NY U/S. 10A OF THE ACT ON MERITS AFTER APPLICATION OF MIND AS UNDER: THE ASSESSEE WHO COMMENCED THE ACTIVITIES IN THE P REVIOUS YEAR RELEVANT TO THIS ASSESSMENT YEAR ITSELF, IS ENGAGED IN THE BUSINESS OF PROVIDING CIVIL STRUCTURAL DESIGNING AND DETAILING SERVICES T O ITS OVERSEAS AFFILIATE US COMPANY WHICH IS CHARGED 85% OF THE SERVICE CHARGES CHARGED TO THE END CUSTOMERS OF THE US COMPANY AS PER THE STATUTORY DO CUMENTS FILED PURSUANT TO THE TRANSFER PRICING REGULATIONS. THE ASSESSEE HAS SET UP THE UNDERTAKINGS AT MUMBAI AND NASHIK. IN THE YEAR UNDER CONSIDERATION, ONLY THE UNDERTAKING AT MUMBAI IS REGISTERED IN THE SOFTWARE TECHNOLOGY PARK WITH EFFECT FROM OCTOB ER, 2005. ACCORDINGLY, THE CLAIM FOR EXEMPTION UNDER SECTION 10A IS RESTRI CTED BY THE ASSESSEE TO THE OPERATIONS OF THE MUMBAI UNDERTAKING FOR THE PERIOD AFTER THE COMMENCEMENT OF OPERATION IN THE STP. THE REVENUES AND EXPENSES HAVE BEEN BIFURCATED AND ALLOCATED AS PER THE BASIS ADOPTED AND STATED IN FO RM NO. 56 FILED ALONG WITH THE RETURN OF INCOME AND ACCORDINGLY, FROM THE TOTA L INCOME OF RS. 76,37,920/- THE CLAIM IS MADE FOR EXEMPTION UNDER S ECTION 10A OF RS. 47,43,192 BEING THE PROFITS AND GAINS OF PART PERIO D OF MUMBAI STP UNDERTAKING. THE LD. COUNSEL OF THE ASSESSEE COMPANY SUBMITTED T HAT THE AO HAS DULY APPLIED HIS MIND BEFORE FRAMING ORIGINAL ASSESSMENT ORDER U/S 143(3) OF THE ACT AND NO NEW TANGIBLE MATERIAL HAS COME TO THE NO TICE OF THE AO BEFORE RE- OPENING THE ASSESSMENT U/S 147/148 OF THE ACT AND I T IS A CASE OF CHANGE OF OPINION ON SAME SET OF FACTS BEFORE THE AO WHICH WA S THERE AT THE TIME OF FRAMING ORIGINAL ASSESSMENT ORDER DATED 28-11-2008 U/S 143(3) OF THE ACT . THE LD. COUNSEL FOR THE ASSESSEE COMPANY SUBMITTED THAT THIS IS THE FIRST YEAR OF OPERATION OF THE ASSESSEE COMPANY AS THE ASSESSE E COMPANY WAS INCORPORATED ON 10 TH MARCH, 2005 ONLY. THE ASSESSEE COMPANY SET UP A NE W UNDERTAKING AT MUMBAI AND NASHIK AND COMMENCED OPER ATION FROM APRIL, 2005. THE ASSESSEE COMPANY MADE AN APPLICATION IN THE MONTH OF JULY, 2005 WITH THE SOFTWARE TECHNOLOGY PARK, FOR WHICH THE PE RMISSION WAS GRANTED BY STPI VIDE APPROVAL LETTER DATED 19 TH SEPTEMBER, 2005, WHICH IS PLACED IN THE PAPER BOOK FILED WITH THE TRIBUNAL. THE ASSESSEE C OMPANY SUBMITTED THAT IT HAS CLAIMED EXEMPTION U/S. 10A OF THE ACT AMOUNTING TO RS. 47,43,192/- ITA 3147/M/2014 8 W.E.F. 1 ST OCT, 2005 TILL 31 ST MARCH, 2006. THE ASSESSEE COMPANY SUBMITTED THAT THE WHOLE UNIT WHICH HAS BEEN SET UP AT MUMBAI IS A NEW UNIT AND IS NOT AN OLD UNIT AND THE ONLY THING IS THAT, AFTER THE U NIT HAS BEEN SET UP AND STARTED OPERATING FROM APRIL, 2005, THE PERMISSION WAS APPLIED IN JULY, 2005 WHICH WAS GRANTED BY THE SOFTWARE TECHNOLOGY PARK O N19 TH SEPTEMBER, 2005 WITH RESPECT TO MUMBAI UNIT. HENCE, THE LD. COUNSE L CONTENDED THAT MUMBAI UNIT IS NOT AN OLD UNIT RATHER IT IS A NEW U NIT SET UP IN APRIL 2005 HAVING OBTAINED STPI APPROVAL ON 19-09-2005. THUS, LD. COUNSEL OF THE ASSESSEE COMPANY SUBMITTED THAT THE REOPENING HAS B EEN DONE BASED ON THE AUDIT OBJECTION AFTER FOUR YEARS FROM THE END OF TH E RELEVANT ASSESSMENT YEAR WHICH IS NOT TENABLE IN LAW AS THE ASSESSEE COMPANY HAS DISCLOSED FULLY AND TRULY ALL THE MATERIAL FACTS AND THERE IS NO FAILUR E ON THE PART OF THE ASSESSEE COMPANY WHEREBY THE ASSESSEE COMPANY HAS TRULY AND FULLY DECLARE THE FACTS IN THE RETURN OF INCOME FILED WITH THE REVENUE AND IN THE ORIGINAL ASSESSMENT PROCEEDINGS CARRIED OUT U/S. 143(3) R.W.S. 143(2) O F THE ACT. THE ASSESSEE COMPANY SUBMITTED THAT WHILE GRANTING APPROVAL FOR REOPENING U/S 147/148 OF THE ACT, IT IS NOTED BY THE AO VIDE PROPOSAL FOR APPROVAL FROM CIT DATED 30 TH MARCH, 2012 AS UNDER: 2. IN THIS CASE, THE ORDER U/S. 143(3) WAS PASSED ON 28/11/2008 ASSESSING THE TOTAL INCOME AT 29,93,879/- AFTER ALL OWING THE EXEMPTION U/S.10A AMOUNTING TO RS. 47,43,192/-. THE REVENUE AUDIT VIDE PARA 1 OF 49 TH CYCLE HAS RAISED AN OBJECTION THAT THAT ASSESSEE CO MPANY WAS INCORPORATED ON 10-03-2005 AND STARTED RENDERING SERVICE TO A.E. PR OTHIOUS INC, USA. ASSESSEE SET UP UNDERTAKING AT MUMBAI AND NASHIK AN D STARTED MANUFACTURING AND EXPORT OF SOFTWARE SINCE APRIL 20 05 FROM BOTH THE UNDERTAKINGS. FURTHER, IT WAS OBSERVED THAT MUMBAI UNDERTAKING GOT LETTER OF PERMISSION FROM STPI, NAVI MUMBAI ON 19-09-2005 FOR 100% EXPORT ORIENTED UNIT. LICENCE U/S. 59 & 65 OF THE CUSTOMS ACT FOR MANUFACTURE IN BOND OF COMPUTER SOFTWARE WHICH WAS AN ESSENTIAL REQUIREMEN T FOR 100% EOU. AS THE MANUFACTURING AND EXPORT ACTIVITY FROM THE MUMB AI UNDERTAKING IS ALREADY IN EXISTENCE SINCE APRIL, 2005 AND ASSESSEE CLAIMED DEPRECIATION OF RS. 15,29,036/- FROM 01-04-2005 TO 30-09-2005 IN RE SPECT OF MUMBAI UNDERTAKING WHICH AGAIN REINFORCES THE ASSESSEE HAD ALREADY ACQUIRED ASSETS AND CONTINUING WITH MANUFACTURING OF COMPUTER SOFTW ARE, IT IS OBVIOUS THAT ITA 3147/M/2014 9 THE CLAIM OF ASSESSEE FOR DEDUCTION OF PROFIT IN RE SPECT OF ITS MUMBAI UNIT U/S. 10A IS NOT IN ORDER AND SAME SHOULD BE DISALLOWED. 3. THE OBJECTION RAISED BY THE REVENUE AUDIT IS NOT ACCEPTABLE. F.Y. 2005-06 IS THE FIRST YEAR OF OPERATION OF THE ASSES SEE COMPANY. IT IS PERTINENT TO MENTION HERE THAT ASSESSEE HAS COMMENCED BUSINES S FROM APRIL, 2005 AS PER THE REGISTRATION CERTIFICATE OF ESTABLISHMENT D ATED 05-04-2005 BY THE SR. INSPECTOR SHOPS & ESTT. K/W. BOMBAY SHOPS AND ESTAB LISHMENTS ACT, 1948 WHEREIN IT CAN BE SEEN THAT ASSESSEE HAS COMMENCED BUSINESS DURING THE YEAR UNDER CONSIDERATION. THE BILLS FURNISHED DURING TH E COURSE OF ASSESSMENT PROCEEDINGS FURTHER SUPPORT THAT THE SAME WERE PURC HASED DURING THE YEAR UNDER CONSIDERATION AND ACCORDINGLY QUALIFIES FOR E XEMPTION U/S. 10A AND DEPRECIATION WAS RIGHTLY CLAIMED FROM THE DATE OF A SSET PUT TO USE WHICH WAS FOUND TO BE IN ORDER. THE LD. COUNSEL SUBMITTED THAT PERUSAL OF THE ABOVE PROPOSAL OF THE AO WILL ITSELF SHOWS THAT THE ASSESSEE COMPANY IS ENTITLED FOR DEDUCTION U/S. 10A OF THE ACT. THE LD. COUNSEL SUBMITTED THAT THE DEDUCT ION HAS BEEN DENIED U/S. 10A OF THE ACT MERELY ON THE GROUND THAT ASSESSEE C OMPANY HAS RECEIVED THE APPROVAL FROM STPI ON 19 TH SEPTEMBER, 2005 WHILE IT COMMENCED OPERATION FROM APRIL, 2005. THE LD. COUNSEL ALSO SUBMITTED TH AT APPROVALS FROM THE CIT HAS BEEN OBTAINED BY THE AO ON THE SAME DATE OF SEN DING THE PROPOSAL I.E. 30-03-2012 AND THE ASSESSE COMPANY HAS PLACED ON RE CORD IN PAPER BOOK THE DOCUMENTS RELATING TO THE PROPOSAL DATED 30-3-2012 SENT BY THE AO TO THE CIT AND THE APPROVAL DATED 30-03-2012 GRANTED BY TH E CIT, WHICH IN THE OPINION OF THE ASSESSEE COMPANY IS GRANT OF APPROVA L IN MECHANICAL MANNER BY THE CIT WITHOUT APPLICATION OF MIND AS THE SAME IS GRANTED ON THE SAME DATE BY THE CIT WITHOUT ANY COMMENTS. THE LD. COUN SEL FOR THE ASSESSEE COMPANY RELIED ON THE FOLLOWING DECISIONS TO CONTEN D THAT THE ASSESSEE COMPANY IS ENTITLED FOR THE DEDUCTION U/S. 10A OF T HE ACT: I. NAGESH CHUNDUR VS. CIT [(2013) 358 ITR 521] (MAD); II. SUPER AUTO FORGE LTD., VS. ADD. CIT [(2014)365 ITR 318] (MAD); III. CIT VS. FORESEE INFORMATION SYSTEMS (P) LTD., [(201 4)365 ITR 335] (KAR); ITA 3147/M/2014 10 IV. CIT VS. EXCEL SOFTECH LTD [(2008)175 TAXMAN 257 (P& H-HC)]; V. CIT VS. QUANTUM CODERS LTD [ITA NO. 542 OF 2013] (D EL) 7. ON THE OTHER HAND, LD.DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE COMPANY WAS INCORPORATED ON 10 TH MARCH, 2005 AND HAS COMMENCED ITS OPERATIONS W.E.F . APRIL, 2005. THE ASSESSEE COMPANY SUBMITTED ITS RETURN OF INCOME U/S . 139 ON 29-11-2006 WHICH WAS PROCESSED U/S. 143(3) OF THE ACT AND ASSE SSMENT WAS FRAMED VIDE ORDERS DATED 28-11-2008. DURING THE COURSE OF THE ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) READ WITH SECTION 143(2) OF THE ACT , THE AO HAS ASKED FOR THE DETAILS OF DEDUCTION CLAIMED BY THE ASSESSE E COMPANY U/S.10A OF THE ACT. THE ASSESSEE COMPANY HAS DULY REPLIED VIDE RE PLY DATED 10-12-2007 TO THE AO IN ORIGINAL ASSESSMENT PROCEEDINGS AND ON BE ING SATISFIED, THE ASSESSMENT HAS BEEN FRAMED U/S. 143(3) OF THE ACT B Y THE AO VIDE ORDERS DATED 28-11-2008 WHEREBY DEDUCTION OF RS.47,43,192/ - U/S 10A OF THE ACT WAS DULY GRANTED TO THE ASSESSEE COMPANY BY THE AO. THE ASSESSEE COMPANY HAS DULY SUBMITTED FORM NO 56F BEING REPORT UNDER S ECTION 10A OF THE ACT DATED 10.10.2006 ISSUED BY AUDITORS-CHARTERED ACCOU NTANTS OF THE ASSESSEE COMPANY CERTIFYING THAT THE ASSESSEE COMPANY IS ENT ITLED FOR DEDUCTION U/S 10A OF THE ACT OF RS.47,43,192/- DURING THE ASSESSM ENT YEAR. IT IS ALSO EMERGING FROM THE RECORDS AND ALSO FROM THE ORDER S OF THE AUTHORITIES BELOW THAT THE ASSESSEE COMPANY HAS SET UP A NEW UNDERTAK ING FOR THE MANUFACTURE AND EXPORT OF THE COMPUTER SOFTWARE UNDER BOND AT M UMBAI WHICH WAS SET UP IN APRIL 2005 BUT THE ASSESSEE COMPANY OBTAINED STP I APPROVAL ON 19-09- 2005 AND CLAIMED DEDUCTION U/S 10A OF THE ACT W.E.F . 01-10-2005. IN OUR CONSIDERED OPINION, THE ASSESSEE HAS TRULY AND FULL Y DISCLOSED ALL THE MATERIAL FACTS IN THE RETURN OF INCOME FILED U/S 139 OF THE ACT WITH THE REVENUE AND ALSO DURING ASSESSMENT PROCEEDINGS U/S 143(3) OF TH E ACT READ WITH SECTION ITA 3147/M/2014 11 143(2) OF THE ACT WITH RESPECT TO MATERIAL AND RELE VANT FACTS CONCERNING SETTING UP AND COMMENCEMENT OF OPERATIONS OF NEW UN IT AT MUMBAI W.E.F. APRIL 2005 AND THE REGISTRATION/APPROVAL OBTAINED F ROM STPI DATED 19-09- 2005 AND ITS CLAIM OF DEDUCTION U/S 10A OF RS47,43, 192/- W.E.F. 01-10-2005 , WHICH HAS BEEN DULY CONSIDERED BY THE REVENUE WHILE FRAMING ORIGINAL ASSESSMENT U/S. 143(3) OF THE ACT AND GRANTING DEDU CTION OF RS.47,43,192/- U/S 10A OF THE ACT. THE ASSESSEE COMPANY HAS CLAIM ED DEPRECIATION FROM 1 ST APRIL, 2005 ON THE FIXED ASSETS, WHILE THE ASSESSEE COMPANY CLAIMED DEDUCTION U/S.10A OF THE ACT FROM 01 ST OCTOBER 2005 AS THE PERMISSION HAS BEEN OBTAINED FROM STPI FROM 19 TH SEPTEMBER, 2005 . IN OUR CONSIDERED VIEW, THE PROCEEDINGS U/S. 147 AND 148 OF THE ACT INITIAT ED AGAINST THE ASSESSEE COMPANY NEED TO BE DROPPED AS THE SAME WAS NOT VALI DLY INITIATED AND IS MERELY A CHANGE OF OPINION BY THE AO BASED UPON THE AUDIT OBJECTIONS AND AO HAS NOT INDEPENDENTLY APPLIED HIS MIND BEFORE RE -OPENING THE PROCEEDINGS U/S 147/148 OF THE ACT AGAINST THE ASSESSEE COMPANY WHILE THERE IS NO FAILURE ON THE PART OF THE ASSESSEE COMPANY IN TRUL Y AND FULLY DISCLOSING ALL MATERIAL AND RELEVANT FACTS CONCERNING THE MUMBAI U NIT, AS THE PROCEEDINGS HAVE BEEN INITIATED AFTER FOUR YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR AND THE PROVISO TO SECTION 147 OF THE ACT IS A PPLICABLE , THE ORIGINAL ASSESSMENT HAVING BEING PROCESSED U/S. 143(3) OF TH E ACT CULMINATING INTO AN ASSESSMENT ORDER DATED 28-11-2008. EVEN ALTERNATIV ELY OTHERWISE ON THE MERITS OF THE APPEAL, WE HAVE OBSERVED THAT ASSESSE E COMPANY HAS SET UP A NEW UNDERTAKING IN THE MONTH OF APRIL, 2005 AND OBT AINED PERMISSION FROM STPI W.E.F. 19 TH SEPTEMBER, 2005 BY MAKING AN APPLICATION IN THE MO NTH OF JULY, 2005 WHICH IS ONE OF THE IMPORTANT CONDITION FOR GRANT OF APPROVAL U/S 10A OF THE ACT. IT IS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE COMPANY HAS UTILIZED THE OLD MACHINERY/COMPUTERS ETC. WHILE SETTING UP THE NEW UNDERTAKING IN MUMBAI IN APRIL 2005 RATHER THE CASE OF THE REVENUE IS THAT THE ASSESSEE COMPANY SET UP AN UNDERTAKING IN THE M ONTH OF APRIL, 2005 WHILE IT APPLIED FOR THE PERMISSION FROM STPI IN JU LY 2005 AND THE PERMISSION ITA 3147/M/2014 12 WAS RECEIVED ON 19 TH SEPTEMBER 2005 WHILE THE DEDUCTION U/S. 10A OF THE ACT WAS CLAIMED W.E.F. 1 ST OCTOBER 2005 AND HENCE THE REVENUE IS CONTENDING T HAT WHEN STPI APPROVAL WAS RECEIVED BY THE ASSESSEE COM PANY ON 19 TH SEPTEMBER 2005, IT WAS ALREADY AN EXISTING UNIT BEING SET UP IN APRIL 2005 I.E. ANTERIOR TO THE RECEIPT OF STPI APPROVAL ON 19-09-2005 AND MUMB AI UNIT CANNOT BE CLASSIFIED AS THE NEW UNIT AND IT WILL BE DEEMED TO BE OLD UNIT AT THAT TIME AND HENCE THERE IS RECONSTRUCTION OF BUSINESS FROM DOME STIC TARIFF AREA UNIT TO 100% EOU WHEN STPI PERMISSION WAS RECEIVED, THUS MA KING IT INELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT AS THE SAME IS HIT BY SECTION 10A(2) OF THE ACT. HOWEVER, IN OUR CONSIDERED VIEW, THE ASSESSEE COMPA NY IS NOT HIT BY THE SECTION 10A(2) OF THE ACT AS IT COULD NOT BE SAID T HAT IT IS FORMED BY SPLITTING UP OR RECONSTRUCTION OF BUSINESS ALREADY IN EXISTE NCE NOR IT IS BROUGHT ON RECORDS THAT THERE IS TRANSFER TO A NEW BUSINESS OF MACHINERIES OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. THE CIRCULAR NO 1 OF 2005 ISSUED IN CONTEXT OF SECTION 10B OF THE ACT WHICH IS REPRODUCED BELOW SUPPORTS THE STAND OF THE ASSESSEE COMPANY : CERTAIN CLARIFICATION REGARDING TAX HOLIDAY UNDER SECTION 10B OF THE INCOME-TAX ACT TO 100% EXPORT ORIENTED UNDERTAKING CIRCULAR NO. 1/2005, DATED 6-1-2005 1. SECTION 10B OF THE INCOME-TAX ACT PROVIDES FOR 100% DEDUCTION OF PROFITS DERIVED BY A HUNDRED PER CENT EXPORT ORIENTED UNDERTAKING, FROM EXPORT OF AR TICLES OR THINGS OR COMPUTER SOFTWARE MANUFACTURED OR PRODUCED BY IT. THE DEDUCTION IS AV AILABLE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR RELEVANT T O THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE. HOWEVER, NO DEDUCTION UNDER SECTION 10B IS AVAILABLE AFTER ASSESSMENT YEA R 2009-10. 2. THE DEDUCTION UNDER SECTION 10B IS AVAILABLE TO AN UNDERTAKING WHICH FULFILS ALL THE FOLLOWING CONDITIONS: (I) IT MANUFACTURES OR PRODUCES ANY ARTICLE OR THIN G OR COMPUTER SOFTWARE; (II) IT IS NOT FORMED BY THE SPLITTING UP, OR THE R ECONSTRUCTION, OF A BUSINESS ALREADY IN EXISTENCE EXCEPT IN THE CIRCUMSTANCES SPECIFIED UNDER SECTION 33B OF THE IT ACT. ITA 3147/M/2014 13 (III) IT IS NOT FORMED BY THE TRANSFER TO A NEW BUS INESS OF MACHINERY OR PLANT PREVIOUSLY USED FOR ANY PURPOSE. 3. REPRESENTATIONS HAVE BEEN RECEIVED FROM VARIOUS QU ARTERS AS TO WHETHER AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA, WHICH IS SUBSEQUENTLY APPROVE D AS 100% EOU BY THE BOARD APPOINTED BY THE CENTRAL GOVERNMENT IN EXERCISE OF POWERS CONFERRED UNDER SECTION 14 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION) ACT, 1951, IS ELIGIBLE FOR DEDUCTIO N UNDER SECTION10B OF THE INCOME-TAX ACT. 4. THE MATTER HAS BEEN EXAMINED AND IT IS HEREBY CLARIFIED THAT AN UNDERTAKING SET UP IN DOMESTIC TARIFF AREA (DTA) AND DERIVING PROFIT FROM EXPORT O F ARTICLES OR THINGS OR COMPUTER SOFTWARE MANUFACTURED OR PRODUCED BY IT, WHICH IS SUBSEQUENT LY CONVERTED INTO A EOU, SHALL BE ELIGIBLE FOR DEDUCTION UNDER SECTION 10B OF THE IT ACT, ON GETTI NG APPROVAL AS 100% EXPORT ORIENTED UNDERTAKING. IN SUCH A CASE, THE DEDUCTION SHALL BE AVAILABLE ONLY FROM THE YEAR IN WHICH IT HAS GOT THE APPROVAL AS 100% EOU AND SHALL BE AVAILABLE ONLY FOR THE REMAINING PERI OD OF TEN CONSECUTIVE ASSESSMENT YEARS, BEGINNING WITH THE ASSESSMENT YEA R RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE ARTICL ES OR THINGS OR COMPUTER SOFTWARE, AS A DTA UNIT. FURTHER, IN THE YEAR OF APPROVAL, THE DEDUCTION SHA LL BE RESTRICTED TO THE PROFITS DERIVED FROM EXPORT S, FROM AND AFTER THE DATE OF APPROVAL OF THE DTA UNIT AS 100% EOU. MOREOVER, THE DEDUCTION TO SUCH UNITS IN ANY CASE WILL NOT BE AVAILABLE AFTER ASSES SMENT YEAR 2009-10. 5. TO CLARIFY THE ABOVE POSITION, CERTAIN ILLUSTRATIONS A RE GIVEN AS UNDER: (I) UNDERTAKING A IS SET UP IN DOMESTIC TARIFF AR EA AND STARTS MANUFACTURE OR PRODUCTION OF COMPUTER SOFTWARE IN FINANCIAL YEAR 1999-2000 RELEV ANT TO ASSESSMENT YEAR 2000-01. IT GETS APPROVAL AS 100% EOU ON 10TH SEPTEMBER, 2004 IN THE FINANCIAL YEAR 2004-05 RELEVANT TO ASSESSMENT YEAR 2005-06. ACCORDINGLY, IT SHALL BE E LIGIBLE FOR DEDUCTION UNDER SECTION 10B FROM ASSESSMENT YEAR 2005-06 I.E., THE YEAR IN WHIC H IT FULFILS THE BASIC CONDITION OF BEING A 100% EOU. FURTHER, THE DEDUCTION SHALL BE AVAILABLE ONLY FOR THE REMAINING PERIOD OF TEN YEARS I.E. FROM ASSESSMENT YEAR 2005-06 TO ASSESSME NT YEAR 2009-10. THIS DEDUCTION UNDER SECTION 10B FOR ASSESSMENT YEAR 2005-06 SHALL BE RE STRICTED TO THE PROFITS DERIVED FROM EXPORTS, FROM AND AFTER THE DATE OF APPROVAL OF THE DTA UNIT AS 100% EOU. (II) UNDERTAKING B SET UP IN DOMESTIC TARIFF AREA , BEGINS TO MANUFACTURE OR PRODUCE COMPUTER SOFTWARE IN FINANCIAL YEAR 1996-97 RELEVANT TO ASSE SSMENT YEAR 1997-98. IT GETS APPROVAL AS 100% EOU IN FINANCIAL YEAR 2007-08 RELEVANT TO ASSE SSMENT YEAR 2008-09. NO DEDUCTION UNDER SECTION 10B SHALL BE ADMISSIBLE TO UNDERTAKIN G B AS THE PERIOD OF 10 YEARS EXPIRES IN FINANCIAL YEAR 2005-06 RELEVANT TO ASSESSMENT YEAR 2006-07, PRIOR TO ITS APPROVAL AS 100% EOU. (III) UNDERTAKING C IS SET UP IN DOMESTIC TARIFF AREA IN THE FINANCIAL YEAR 2000-01 RELEVANT TO ASSESSMENT YEAR 2001-02 AND ENGAGED IN THE BUSINESS OF PROVIDING COMPUTER RELATED SERVICES, OTHER THAN THOSE NOTIFIED BY THE BOARD FOR THE PURP OSES OF SECTION 10B. IN FINANCIAL YEAR 2002- ITA 3147/M/2014 14 03, IT ACQUIRES MORE THAN 20% OF OLD PLANT AND MACH INERY AND STARTS MANUFACTURING COMPUTER SOFTWARE. IT ALSO GETS APPROVAL AS 100% EOU IN FINA NCIAL YEAR 2002-03. UNDERTAKING C SHALL NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 10B, AS THERE HAS BEEN TRANSFER OF OLD PLANT AND MACHINERY. (IV) UNDERTAKING D IS SET UP AND STARTS PRODUCING COMPUTER SOFTWARE IN FINANCIAL YEAR 2003-04 RELEVANT TO ASSESSMENT YEAR 2004-05. IT GETS APPROV AL AS 100% EOU IN FINANCIAL YEAR 2006-07 RELEVANT TO ASSESSMENT YEAR 2007-08. IT SHALL BE EL IGIBLE FOR DEDUCTION UNDER SECTION 10B FROM ASSESSMENT YEAR 2007-08. HOWEVER, THE DEDUCTION SHA LL NOT BE AVAILABLE AFTER ASSESSMENT YEAR 2009-10. (V) UNDERTAKING E IS SET UP AND STARTS PRODUCING COMPUTER SOFTWARE PRIOR TO 31-3-1994. IT GETS APPROVAL AS 100% EOU IN FINANCIAL YEAR 2004-05 RELE VANT TO ASSESSMENT YEAR 2005-06. UNDERTAKING E SHALL NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 10B AS THE PERIOD OF DEDUCTION OF 10 YEARS EXPIRES PRIOR TO ASSESSMENT Y EAR 2005-06. THE FOLLOWING CASE LAWS ALSO SUPPORT THE STAND AND CONTENTIONS OF THE ASSESSEE COMPANY: I. NAGESH CHUNDUR VS. CIT [(2013) 358 ITR 521] (MAD); II. SUPER AUTO FORGE LTD., VS. ADD. CIT [(2014)365 ITR 318] (MAD); III. CIT VS. FORESEE INFORMATION SYSTEMS (P) LTD., [(201 4)365 ITR 335] (KAR); IV. CIT VS. EXCEL SOFTECH LTD [(2008)175 TAXMAN 257 (P& H-HC)]; V. CIT VS. QUANTUM CODERS LTD [ITA NO. 542 OF 2013] (D EL) THUS, WE HOLD THAT ASSESSEE COMPANY IS DULY ENTITLE D FOR EXEMPTION U/S. 10A OF THE ACT AND IN OUR CONSIDERED VIEW, THE ASSESSEE COMPANY HAS RIGHTLY CLAIMED DEDUCTION OF RS.47,13,192/- U/S. 10A OF THE ACT W.E.F. 1 ST OCTOBER , 2005 WHICH THE ASSESSEE COMPANY IS DULY ENTITLED FO R THE SAID DEDUCTION OF RS.47,13,192/- U/S 10 A OF THE ACT. HENCE, WE SET ASIDE THE ORDERS OF THE CIT(A) AND HOLD THAT THE ASSESSEE COMPANY IS ENTITL ED FOR THE DEDUCTION OF RS.47,13,192/- U/S.10A OF THE ACT W.E.F. 1 ST OCTOBER, 2005 WHICH HAS BEEN ITA 3147/M/2014 15 RIGHTLY CLAIMED BY THE ASSESSEE COMPANY IN THE RETU RN OF INCOME FILED WITH THE REVENUE. WE ORDER ACCORDINGLY. 9. ACCORDINGLY, THE APPEAL OF THE ASSESSEE COMPANY IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JANUARY , 2016 !' # $% &! ' 2016 ( ) SD/- SD/- ( SHAILENDRA KUMAR YADAV ) ( RAMIT KOCHAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER $ : MUMBAI ; &! DATED 18-01-2016 .;../ TNMM/ TNMM/ TNMM/ TNMM/ R.K. R.K. R.K. R.K. , SR. PS /01 2 3456 7064 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. < ( ) / THE CIT(A)- 21, MUMBAI 4. < / CIT- 10, MUMBAI 5. =>( ;;?@ , ?@ , $ : / DR, ITAT, MUMBAI A BENCH 6. (BC D / GUARD FILE. /01 8 / BY ORDER, = ; //TRUE COPY// 9/8: ; ( DY./ASSTT. REGISTRAR) , $ : / ITAT, MUMBAI