NETMAGIC IT SERVICES P.LTD, MUMBAI V. ITO 9(2)(3), MUMBAI

ITA 4753/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0725 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 20-08-2015
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

' IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER ITA NO. 4753 /MUM/201 5, (A.Y : 20 09 - 10 ) M/S NETMAGIC IT SERVICES P.LTD BLDG NO.22, NIRLON COMPLEX WESTERN EXPRESS HIGHWAY GOREGAON(E) MUMBAI 400 063 PAN : AACCN2366D VS. ITO - 9(2)(3) MUMBAI ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI GOVIND JAVERI / RE SPONDENT BY : SHRI JEEVANLAL LAVIDIYA / DATE OF HEARING : 11.5. 2017 / DATE OF PRONOUNCEMENT : 17 .5. 2017 / O R D E R P ER C.N.PRASAD (JM) TH IS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(APPEALS) - 21, MUMBAI DATED 14.5.2015 FOR THE ASSESSMENT YEAR 2009 - 10 IN SUSTAINING THE PENALTY U/S 271(1)(C) ON THE DISALLOWANCE OF CLAIM FOR DE DUCTION U/S 10A OF THE ACT. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE COORDINATE BENCH OF THIS TRIBUNAL BY ORDER DATED 26.4.2017 IN ITA NO.1399/MUM/2013 RESTORED THE DISALLOWANCE OF DEDUCTION U/S 10A TO THE FILE OF THE ASSESSING OFFICER AND TO PASS ORDERS AS PE R THE DIRECTIONS CONTAINED IN THE COORDINATE BENCH ORDER FOR THE ASSESSMENT YEAR 2007 - 08 IN 2 ITA NO. 4753/MUM/2015 (A.Y.2009 - 10) M/S NETMAGIC IT SERVICES PVT. LTD. ITA NO.8810/MUM/2008 DATED 6.4.2016. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT ON SIMILAR CIRCUMSTANCES FOR THE ASSESSMENT YEAR 2007 - 08, THE COORDINATE BENCH IN ITA NO.3157/MUM/2013 DATED 3.10.2016 DELETED THE PENALTY LEVIED U/S 271 (1)(C) OF THE ACT. 3. THE LD.DR FAIRLY SUBMITTED THAT THE ISSUE IN APPEAL IN QUANTUM PROCEEDINGS IS IN FAVOUR OF THE ASSESSEE AS THE COORDINATE BENCH DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S 10A OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE DECISION OF THE COORDINATE BENCH. THE DISALLOWANCE MADE IN THE ASSESSMENT ORDER U/S10A HAS BEEN RESTORED TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO FOLLOW THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2007 - 08. FOR THE ASSESSMENT YEAR 2007 - 08, THE COORDINATE BENCH DIRECTED THE ASSESSING O FFICER TO ALLOW THE DEDUCTION SUBJECT TO ASSESSEE SATISFYING OTHER CONDITIONS PRESCRIBED U/S10A OF THE ACT. COMING TO THE PENALTY U/S 271(1)(C), FOR THE ASSESSMENT YEAR 2007 - 08, THE COORDINATE BENCH DELETED THE PENALTY OBSERVING AS UNDER : 2. AT THE OUTS ET, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS AND SUBMITTED THAT IN THE ASSESSMENT MADE U/S 143(3) OF THE ACT, AO DISALLOWED THE CLAIM OF DEDUCTION OF RS. 1,42,03,012/ - U/S 10A OF THE ACT. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY AND THE CIT (A) CONFIRMED THE REJECTION OF EXEMPTION. MATTER TRAVELLED TO THE TRIBUNAL AND IN THE FIRST ROUND OF THE PROCEEDINGS BEFORE THE ITAT, THE TRIBUNAL ALLOWED THE APPEAL VIDE ITA NO.8810/M/2010 (AY 2007 - 2008), DATED 6 .4.2016. BEFORE US, IT IS THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE THAT SINCE, THE TRIBUNAL ALLOWED THE QUANTUM APPEAL, PENALTY LEVIED U/S 271(1)(C) OF THE ACT IS REQUIRED TO BE DELETED. 3. AFTER HEARING THE LD REPRESENTATIVES OF BOTH THE PARTIES AND ON PERUSAL OF THE CITED ORDER OF THE TRIBUNAL (SUPRA), WE FIND, VIDE PARA 10 OF THE SAID ORDER, TRIBUNAL DIRECTED THE AO TO ALLOW THE DEDUCTION U/S 10A AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. CONSIDERING THE 3 ITA NO. 4753/MUM/2015 (A.Y.2009 - 10) M/S NETMAGIC IT SERVICES PVT. LTD. SAME WE ARE OF THE CONSIDERED OPIN ION, SINCE THE TRIBUNAL ALLOWED THE QUANTUM APPEAL, PENALTY LEVIED U/S 271(1)(C) HAS NO LEGS TO STAND. ACCORDINGLY, WE DELETE THE PENALTY. THUS, GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. KEEPING IN VIEW THE ABOVE ORDERS, WE DELETE THE PENALTY LEVIED U /S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2009 - 10 ALSO. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH DAY OF MAY 2017 . SD/ - SD/ - (RAMIT KOCHAR) ( C.N.PRASAD ) / / ACCOUNTANT MEMBER JUDICIAL MEMBER / MUMBAI; / DATED 17 .5. 2017 LR, SPS 4 ITA NO. 4753/MUM/2015 (A.Y.2009 - 10) M/S NETMAGIC IT SERVICES PVT. LTD. / COPY OF THE ORDER FORWARDED TO : / BY ORDER, (ASSTT. REGISTRAR) , / ITAT, MUM 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. // TRUE COPY / /