ITO, WD-2(3), KOLKATA, Kolkata V. M/s Last Peak Data Pvt. Ltd., Kolkata

ITA 426/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0826 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: VASANT SUBRAMANYAN
• Keywords: Transfer pricing; International transaction; Revised return
• Section: 11A; 10AA

Judgement Text

ITA NO.426/KOL/2016 M/S. LAST PEAK DATA (P)LTD. A.Y .2010-11 1 IN THE INCOME TAX APPELLATE TRIBUNAL D B ENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & DR.ARJUN LAL SAINI, AM] I.T.A NO.426/KOL/2016 ASSESSMENT YEAR : 2010-11 I.T.O., WARD-2(3) -VS.- M/S. LAST PEAK D ATA (P) LTD. KOLKATA KOLKATA. [PAN : AABCL 0383 Q] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI ARINDAM BHATT ACHARJEE, ADDL. CIT FOR THE RESPONDENT : SHRI VASANT SUBRAMA NYAN DATE OF HEARING : 30.11.2017. DATE OF PRONOUNCEMENT : 01.12.2017. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 14.01.2016 OF CIT(A)3, KOLKATA RELATING TO A.Y.2010-11. 2. THE ASSESSEE COMPANY WAS ENGAGED IN BUSINESS OF DATA PROCESSING, SOFTWARE DEVELOPMENT AND BUSINESS PROCESSING OUTSOURCE. ASSE SSEE HAD UNIT AT SALT LAKE CITY, KOLKATA THAT WAS REGISTERED WITH SOFTWARE TECHNOLOG Y PARK (STPI), KOLKATA AS 100% EXPORT ORIENTED UNIT FOR COMPUTER SOFTWARE. ASSESSE E WAS CLAIMING EXEMPTION U/S.10B UP TO AY 2008-09. S.10B ALLOWED DEDUCTION O F PROFITS AND GAINS DERIVED BY HUNDRED PER CENT EXPORT-ORIENTED UNDERTAKING FROM E XPORT FOR ARTICLES OR THINGS OR COMPUTER SOFTWARE FOR PERIOD OF TEN CONSECUTIVE ASS ESSMENT YEARS. WHILE COMPUTING BOOK PROFITS U/S.115JB, ASSESSEE REDUCED DEDUCTION CLAIMED U/S. 10B. 3. IN AY 2009-10, THE ASSESSEE CLAIMED DEDUCTION U/ S.10AA OF THE ACT IN RESPECT OF THE PROFITS OF THE STPI. THE AO DENIED CLAIM OF ASSESSEE REGARDING DEDUCTION U/S.10AA ON SEVERAL COUNTS. THE CIT(A) HOWEVER REVE RSED ORDER OF AO AND THE TRIBUNAL UPHELD THE ORDER OF CIT(A). IT WAS THUS H ELD THAT THE ASSESSEE WAS STP UNIT ITA NO.426/KOL/2016 M/S. LAST PEAK DATA (P)LTD. A.Y .2010-11 2 REGISTERED UNDER STPI SCHEME AND WAS THEREFORE AN EXISTING SEZ AND EXISTING UNIT UNDER SEZ ACT. THEREFORE ASSESSEE COULD CLAIM BENEFITS AVAILABLE TO SEZ AND THAT PHYSICAL PRESENCE OF EXISTING SEZ OR EXISTI NG UNIT IN SEZ WAS NOT CONDITION FOR ALLOWING DEDUCTION U/S.10AA. IT WAS ALSO HELD THAT S.10AA WAS TELESCOPED WITH EARLIER S. 10A, AS THAT PROVISION WAS EXCLUDED FOR APPLICATION FROM AY 2006-07 FOR REASON THAT S.10AA WAS MADE TO CONTINUE TO APPLY TO REMAINING SPAN OF LEFT OVER YEARS OF RELIEF U/S.10A. MOREOVER, S. 4(1) OF SEZ A CT PROVIDE THAT EXISTING SEZ UNIT SHOULD BE DEEMED TO HAVE BEEN NOTIFIED AND ESTABLIS HED IN ACCORDANCE WITH PROVISIONS OF SEZ ACT. PROVISIONS OF SPECIAL ECONOMIC ZONES AC T SHOULD APPLY TO EXISTING SEZ UNITS. APPARENTLY, IT WAS UNDISPUTED POSITION THAT THE AMALGAMATING COMPANY WITH THE ASSESSEE WAS ENJOYING STP UNIT STATUS AS IT WAS IN ITES AND THEREFORE THERE WAS NO QUESTION OF ASSESSEE HAVING BEEN FORMED BY SPLITTIN G UP OR RECONSTRUCTION OF UNIT ALREADY IN EXISTENCE AS ASSESSEE WAS ALREADY EXISTI NG UNIT. THE DEDUCTION U/S.10AA WAS CLAIMED FOR PERIOD WITHIN 10 YEARS CONTEMPLATED BY S. 10AA EVEN AFTER CONSIDERING EXEMPTION ALREADY AVAILED BY ASSESSEE. IT WAS HELD THAT THE AMALGAMATING COMPANY WITH THE ASSESSEE HAD NOT AVAI LED S.10A DEDUCTION FOR PERIOD BEYOND 10 YEARS BEFORE AMALGAMATION WITH ASSESSEE. THUS, VERY BASIS OF APPLICATION OF S.10AA(4)(II) & (III) WAS HELD TO BE FLAWED. IT WAS ALSO HELD THAT NON-FURNISHING OF FORM NO.56F ALONG WITH RETURN OF INCOME WAS NOT MAN DATORY. THE ASSESSEE WAS DIRECTED TO FILE REPORT IN PRESCRIBED FORM FOR AOS CONSIDERATION. IT WAS ALSO HELD THAT NON-FURNISHING OF FORM NO.3CEB REPORT IN RESPECT OF INTERNATIONAL TRANSACTION WHICH ASSESSEE HAD WITH ITS AE IN TERMS OF S. 92, HAD NO THING TO DO WITH ALLOWING DEDUCTION U/S.10AA. IT WAS ALSO HELD THAT THE AO, OUGHT TO HAVE CONSIDERED CLAIM OF ASSESSEE FOR DEDUCTION U/S.10B, AS MADE IN ORIGINAL RETURN OF INCOME. THE AO HAD CHOSEN TO IGNORE SAME AND SOUGHT TO DENY BENEFIT OF S.10AA ALONE WHICH WAS MADE IN THE REVISED RETURN OF INCOME. THE ORDER OF AO WAS SILENT ON CLAIM OF ASSESSEE U/S.10B. THE ORDER OF CIT(A) IN SO FAR AS ACTION I N ALLOWING DEDUCTION U/S.10AA WAS CONCERNED, WAS UPHELD. ITA NO.426/KOL/2016 M/S. LAST PEAK DATA (P)LTD. A.Y .2010-11 3 4. AS FAR AS COMPUTATION OF BOOK PROFITS U/S.115JB OF THE ACT IS CONCERNED, IT WAS HELD THAT THE DISPUTE BETWEEN THE REVENUE AND ASSES SEE WAS AND WAS WITH REGARD TO INTERPRETATION OF PROVISIONS OF S.115JB(6) IN MANNE R OF COMPUTATION OF BOOK PROFITS. IT WAS HELD THAT THE METHOD OF COMPUTATION OF BOOK PROFITS WAS AS PROVIDED BY S.115JB (6) HOWEVER LAID DOWN THAT INCOME OF SEZ SH OULD BE EXCLUDED FROM PROFITS AS PER PROFIT AND LOSS ACCOUNT FOR PURPOSE OF COMPU TING BOOK-PROFITS. IT WAS HELD THAT THE REVENUE THEREFORE ERRED IN HOLDING THAT AS SESSEE WAS NOT UNIT IN SPECIAL ECONOMIC ZONE AND THEREFORE PROVISIONS OF S.115JB ( 6) WERE NOT APPLICABLE. HENCE, PROFITS OF S.10AA UNIT OF ASSESSEE SHOULD BE EXCLUD ED FOR PURPOSE OF COMPUTING BOOK PROFITS U/S.115JB FROM PROFIT AS PER PROFIT AND LOS S ACCOUNT. 5. THE DECISION OF THE TRIBUNAL IN ASSESSEES CASE FOR AY 2009-10 IS REPORTED AS ITO VS. LAST PEAK DATA (P) LTD. IN 155 ITD 1099 (KO LKATA). 6. THE AO FOLLOWED THE FINDINGS IN AY 2009-10 AND D ENIED CLAIM OF THE ASSESSEE U/S.10AA OF THE ACT FOR DEDUCTION AND ALSO REFUSED TO REDUCE THE PROFITS OF SEC.10AA UNIT FROM THE BOOK PROFITS U/S.115JB OF THE ACT. T HE CIT(A) FOLLOWED THE DECISION OF THE TRIBUNAL IN AY 2009-10 AND HELD IN FAVOUR OF TH E ASSESSEE ON BOTH THE ISSUES. 7. SINCE THE FACTS AND CIRCUMSTANCES AND THE BASIS OF DISALLOWANCE U/S.10AA OF THE ACT AND EXCLUSION OF PROFITS OF SEC.10AA UNIT F OR THE PURPOSE BOOK PROFITS U/S.115JB OF THE ACT ARE IDENTICAL, IT WAS NOT DISP UTED BY THE PARTIES BEFORE US THAT THE DECISION RENDERED BY THE TRIBUNAL FOR AY 2009-10 WI LL APPLY TO AY 2010-11 ALSO. RESPECTFULLY FOLLOWING THE DECISIONS OF THE TRIBUNA L FOR A.Y.2009-10, WE DISMISS BOTH THE GROUNDS RAISED BY THE REVENUE. 8. IN THE RESULT THE APPEAL BY THE REVENUE IS DISMI SSED. ORDER PRONOUNCED IN THE COUR T ON 01.12.2017. SD/- SD/- [DR.A.L.SAINI] [ N.V.V ASUDEVAN ] ACCOUNTANT MEMBER JUDI CIAL MEMBER DATED : 01.12.2017. [RG SR.PS] ITA NO.426/KOL/2016 M/S. LAST PEAK DATA (P)LTD. A.Y .2010-11 4 COPY OF THE ORDER FORWARDED TO: 1. M/S. LAST PEAK DATA (P)LTD., D2, RAWDON CHAMBERS , 11A RAWDON STREET, KOLKATA- 700017. 2. I.T.O., WARD-2(3), KOLKATA. 3. C.I.T.(A)-3, KOLKATA 4. C.I.T.-3, KOL KATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY HEAD OF OFFICE / D.D.O., ITAT KOLKATA BENCHES