DCIT, New Delhi V. M/s EON Technologies (P) Ltd., New Delhi

ITA 42/DEL/2011

• Counselvise Citation: 4220114 RSA 2011
• Duration Of Justice: 4 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-01-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 05-01-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Keywords: Question of law; Revised return
• Section: 143(3); 10B; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B , NEW DELHI) BEFORE SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NOS.42, 43, 44 /DEL/2011 ASSESSMENT YEAR : 2001-02, 2002-03 & 2003-04) DCIT, CIRCLE 11(1), VS. M/S. EON TECHNOLOGIES (P) LTD., NEW DELHI 63, SURYA NIKETAN, NEW DELHI. GIR / PAN:AAACC4225G C.O. NO.25,26,27/DEL/2011 (ASSESSMENT YEARS 2001-02, 2002-03 & 2003-04) M/S. EON TECHNOLOGIES (P) LTD., VS. DCIT, CIRCLE 11 (1), 63, SURYA NIKETAN, NEW DELHI NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. PARWINDER KAUR, SR. DR RESPONDENT BY : SHRI SALIL AGGARWAL, SR. ADV. SHRI SHAILESH GUPTA, ADV. ORDER PER T.S. KAPOOR, AM: THESE ARE THREE APPEALS FILED BY REVENUE AGAINST C ONSOLIDATED ORDER OF LD. CIT(A) DATED 08.10.2010. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS. THE GROUND OF APPEAL IN THESE THREE APPEALS AND GRO UND OF CROSS OBJECTIONS IN THREE C.OS. ARE SIMILAR EXCEPT DIFFERENCE IN AMO UNTS, THEREFORE, THE GROUND OF APPEAL IN I.T.A. NO. 42/DEL/2011 AND C.O. NO.25/ DEL/2011 ARE REPRODUCED BELOW: I) I.T.A.NO. 42/DEL/2011 ITA NO.42,43,44/DEL/2011 C.O.NOS.25,26,27/DEL/2011 2 A) THE ORDER OF LD. CIT(A) IS WRONG, PERVERSE, ILL EGAL AND AGAINST THE PROVISIONS OF LAW, LIABLE TO BE SET ASI DE. B) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,6 2,37,920/- ON ACCOUNT OF ADDITION/DISALLOWANCE U/S 10B. II) C.O. NO.25/DEL/2011: A) THAT ALTERNATIVELY, THE APPELLANT COMPANY IS EN TITLED TO CLAIM OF DEDUCTION OF RS.2,60,16,623/- U/S 10A OF T HE ACT. B) THAT IN ANY CASE AND WITHOUT PREJUDICE, THE APPE LLANT COMPANY IS ELIGIBLE TO CLAIM DEDUCTION OF RS.2,10,7 5,015/- U/S 80HHE OF THE ACT AND, THUS AT THE WORST, A DEDUCTIO N OF RS.49,41,608/- COULD ALONE BE HELD TO BE NOT ADMISS IBLE. 2. AT THE OUTSET, LD. D.R. SUBMITTED THAT THE APPEA LS FILED BY REVENUE ARE SQUARELY COVERED IN FAVOUR OF REVENUE BY THE OR DER OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS REGENCY CREATIONS LTD. 353 ITR 326. 3. LD. A.R. FAIRLY CONCEDED THAT THE APPEALS WERE A GAINST REVENUE. HOWEVER, HE SUBMITTED THAT CROSS OBJECTIONS FILED B Y ASSESSEE WERE NOT ADJUDICATED BY LD. CIT(A) WHEREIN ASSESSEE HAD MADE ALTERNATE CLAIM THEREFORE, IT WAS PRAYED THAT THE CASE MAY BE REMIT TED BACK TO THE OFFICE OF A.O. FOR CONSIDERING THE CLAIM OF ASSESSEE U/S 80HH E AND U/S 10A OF THE ACT. LD. A.R. WAS ASKED TO FILE A LIST OF CHRONOLO GICAL EVENTS WHICH HE HAD FILED FOR ASSESSMENT YEAR 2001-02. 4. LD. D.R. ARGUED UPON CROSS OBJECTIONS AND SUBMIT TED THAT CROSS OBJECTIONS CANNOT BE ALLOWED AS THE ASSESSEE WAS NO T ENTITLED TO DEDUCTION U/S 80HHE AND U/S 10A AND IN SUPPORT OF HER ARGUMEN TS, SHE FILED WRITTEN SUBMISSIONS, WHICH ARE REPRODUCED BELOW: 1. CLAIM OF DEDUCTION U/S 10B- (A) VIDE ASSESSMENT ORDER DATED 14.11.2008, ASSESS ING OFFICER HAS DENIED CLAIM OF DEDUCTION U/ L0B TO THE ASSESSEE ON THE BASIS OF THE FOLLOWING POINTS:- ITA NO.42,43,44/DEL/2011 C.O.NOS.25,26,27/DEL/2011 3 (I) THE ASSESSEE DID NOT FURNISH ANY EVIDENCE THAT THE UNDERTAKING IS APPROVED BY THE BOARD AS PROVIDED IN CLAUSE (IV) OF EXPLANATION 2 TO SECTION L0B OF THE I. T. ACT. (II) THE ASSESSEE IS NOT A NEWLY ESTABLISHED UNDER TAKING BECAUSE THE COMPANY WAS ESTABLISHED ON 10.01.1994 A ND HAS BEEN CLAIMING DEDUCTION U/S 80HHE. (III) THE ASSESSEE HAS MERELY OBTAINED A CERTIFICA TE FROM SOFTWARE TECHNOLOGICAL PARK, NOIDA AND NOT FROM THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT IN EXERCISE OF THE POWERS CONFERRED BY SECTION 14 OF THE INDUST RIES (DEVELOPMENT AND REGISTRATION) ACT 1951. (IV) CONDITION AS LAID DOWN IN SUB-SECTION(2) OF S ECTION L0B ARE NOT SATISFIED BECAUSE THE ASSESSEE IS USING THE MACHINERIES ALREADY USED FOR ANY OTHER PURPOSE AS IT IS AN OLD UNDERTAKING ESTABLISHED SINCE 1994. (V) ASSESSEE DID NOT OPT FOR CLAIM OF DEDUCTION U/ S L0B AS PER SUB- SECTION (7) IF SECTION L0B OF THE 1.T. ACT INS TEAD ASSESSEE CLAIMED DEDUCTION U/S 80HHE IN THE FIRST ASSESSMENT YEAR. 2. LD. CIT (A) IN PARA 4.10 TO 4.13 OF HER ORDER HA S GIVEN THE FINDING THAT THE ASSESSEE IS ENTITLED TO CLAIM U/S L0B OR THE 1.T. ACT. CIT (A) HAS RELIED ON THE DECISION OF ITA T IN THE CASES OF REGENCY CREATION. THE HON'BLE HIGH COURT OF DELHI IN CIT VS. REGENCY CREATION LTD [2013] 353 ITR 0326 HAS REVERSED THE DECISION OF IT AT, NEW DELHI. ASSESSEE HAS NOT RECEIVED APPROVAL OF THE BOARD APP OINTED BY THE CENTRAL GOVERNMENT IN EXERCISE OF THE POWERS CONFER RED UNDER SECTION 14 OF INDUSTRIES (DEVELOPMENT & REGULATIONS) ACT, 1 951 AND AS PER THE JUDGMENT OF THE HON'BLE HIGH COURT OF DELHI ASS ESSEE IS NOT ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION L0B OF TH E LT. ACT, 1961. 3. ASSESSEE HAS FILED CROSS OBJECTION AND HAS REQUE STED FOR ALTERNATIVE RELIEF U/S 10AOF THE LT. ACT, AND ALSO U/S 80HHE OF THE IT ACT 1961. IN THIS REGARD IT IS SUBMITTED THAT ASSES SEE IS NOT ENTITLED TO MAKE CLAIM U/S 10AI 80HHE THE 1.T. ACT BECAUSE: (I) FOR CLAIMING DEDUCTION U/S L0A, AS PER SECTION 10(A) (5) OF THE LT. ACT, ASSESSEE DID NOT FURNISH AUDIT REPORT WHICH IS MANDATORY. (II) AS REGARDS CLAIM OF DEDUCTION U/S 80HHE, THE S AME DEDUCTION IS NOT AVAILABLE FOR ASSESSMENT YEARS STARTING W.E.F. 01.04.2005. SINCE, ITA NO.42,43,44/DEL/2011 C.O.NOS.25,26,27/DEL/2011 4 THE ASSESSEE FAILED TO FILE CLAIM U/S 80HHE IN FORM 10CCAF BEFORE THE AO IT IS NOT ELIGIBLE FOR DEDUCTION U/S 80HHE. (III) AS PER THE JUDGMENT OF TPC (SC) 229 ITR 383, QUESTION OF LAW CAN BE RAISED AFRESH IF THE RELEVANT FACTS ARE ON R ECORD. SINCE THE FACTS REGARDING CLAIM OF DEDUCTION U/S 10AI 80HHE BY THE ASSESSEE ARE NOT ON RECORD, THE ASSESSEE FILED HIS RETURN OF INCOME CLAIMING DEDUCTION U/S 10B OF THE I.T. ACT, THEREFORE ALTERNATIVE CLAI M OF ASSESSEE U/S10-A / 80HHE MAY BE REJECTED. (IV) REFERENCE IS MADE TO JUDGMENT OF SC 284 ITR 323 GOETZE INDIA LTD VS. CIT WHEREIN IT WAS HELD THAT ASSESSING OFFICER HAS NO POWER TO ENTERTAIN CLAIM M ADE OTHERWISE THAN BY WAY OF REVISED RETURN. AS PER THE RETURN OF INCO ME FILED BY ASSESSEE, IT HAD FILED CLAIM ONLY FOR DEDUCTION U/S L0B OF LT. ACT. (V) REFERENCE IS ALSO MADE TO THE JUDGMENT OF HON'B LE DELHI HIGH COURT IN THE CASE OF CIT VS. TECHNOVATE & SOLUTIONS PVT. LTD, 354 ITR 110, IT WAS OBSERVED THAT DEDUCTION UNDER SECTION L 0B AND SECTION L0A STAND ON A DIFFERENT FOOTING. SINCE ASSESSEE APPLIE D FOR DEDUCTION U/S L0B OF THE IT ACT, ON THAT BASIS IT CANNOT BE SAID THAT ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 10A. IN VIEW OF THE ABOVE IT IS REQUESTED THAT CROSS-OBJ ECTION RAISED BY THE ASSESSEE MAY BE DISMISSED AND DEPARTMENT'S APPEAL M AY BE ALLOWED. 5. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROUG H THE MATERIAL PLACED ON RECORD. WE FIND FROM THE CHRONOLOGICAL EVENTS F ILED BY LD. A.R. THAT FOR ASSESSMENT YEAR 2001-02, THE ASSESSEE HAD CLAIMED D EDUCTION U/S 10B AND A.O. HAD DISALLOWED THE SAME. ON APPEAL BEFORE LD. CIT(A), THE A.O. WAS DIRECTED TO ALLOW DEDUCTION U/S 10B AND A.O. IN VIE W OF THE DIRECTIONS OF LD. CIT(A), ALLOWED RELIEF. LD. CIT INITIATED PROCEEDI NGS U/S 263 AND THE MATTER WAS SET ASIDE TO A.O. FOR READJUDICATION. THE A.O. IN PURSUANCE TO THE ORDER PASSED U/S 143(3) READ WITH SECTION 263, DISALLOWED DEDUCTION U/S 10B. AGAIN ON APPEAL FILED BY ASSESSEE, LD. CIT(A) GAVE RELIEF TO THE ASSESSEE. HOWEVER, ALTERNATIVE GROUND OF DEDUCTION U/S 10A WA S NOT ADJUDICATED. THEREFORE, THE ASSESSEE IS IN CROSS OBJECTION AND I TS GRIEVANCE IS THAT LD. CIT(A) HAS NOT ADJUDICATED THE ALTERNATIVE CLAIM. ITA NO.42,43,44/DEL/2011 C.O.NOS.25,26,27/DEL/2011 5 6. WE FIND THAT LD. CIT(A) IN HIS ORDER DATED 08.10 .2010 VIDE PARA 5.3 AND 5.4 HAS HELD AS UNDER: 5.3 FINDINGS : AFTER CAREFUL CONSIDERATION OF THE AO'S ORDER, WRIT TEN SUBMISSIONS, CASE LAWS RELIED ON BY THE APPELLANT, CBDT CIRCULAR ETC. I HAVE HELD THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S L0B FOR A.Y.2001-02. AS THE FACTS ARE IDENTICAL, I HOLD THAT THE APPELLANT IS ENTITLED TO DEDUCTION U/S L0B OF THE ACT FOR THE A.Y.2002-03 AND 2005-06. 5.4 THE ABOVE FINDINGS ARE IN RESPECT OF GROUND NO. 1 TO 3 OF GROUNDS OF APPEAL. THE REMAINING GROUND NAMELY GROU ND NO A REGARDING DEDUCTION U/S 80HHE AND ADDITIONAL GROUND REGARDING DEDUCTION U/S L0A ARE ALTERNATIVE CLAIMS WHICH DO N OT ANY ADJUDICATION IN VIEW OF THE FINDINGS IS REGARDING C LAIM OF DEDUCTION U/S L0B OF THE ACT. 7. FROM THE ABOVE FINDINGS OF LD. CIT(A), WE FIND T HAT HE HAS NOT ADJUDICATED ON THE ALTERNATE CLAIM OF ASSESSEE U/S 80HHE AND U/S 10A. THEREFORE, WE DEEM IT APPROPRIATE TO REMIT THE SAME TO THE OFFICE OF LD. CIT(A) WHO SHOULD ADJUDICATE ON THE ALTERNATIVE CLA IM OF ASSESSEE U/S. 80HHE / 10A AS THE CASE MAY BE. AS REGARDS THE ARG UMENTS OF LD. A.R. THAT CASES MAY BE REMITTED TO THE A.O. AS HE HAD NOT EXA MINED THESE CLAIMS, WE DO NOT FIND FORCE IN THIS ARGUMENT AS THE GRIEVANCE OF ASSESSEE HAS ARISEN FROM LD. CIT(A)S ORDER AND NOT FROM ASSESSMENT ORD ER. 8. IN VIEW OF ABOVE, THE APPEALS FILED BY REVENUE A RE ALLOWED AND CROSS OBJECTIONS FILED BY ASSESSEE ARE ALSO ALLOWED FOR S TATISTICAL PURPOSES. 9. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JAN., 2015. SD./- SD./- (DIVA SINGH ) (T.S. KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 30.01.2015 SP ITA NO.42,43,44/DEL/2011 C.O.NOS.25,26,27/DEL/2011 6 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 27/1 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 27,28,29 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 30/1/15 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 30/1 SR. PS/PS 7 FILE SENT TO BENCH CLERK 30/1 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER