ITO, New Delhi V. M/s First Country wide Consultants Pvt. Ltd., New Delhi

ITA 5130/DEL/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69545 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 27-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 03-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Assessee Lawyers: C S AGGARWAL
• Section: 14A; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI) BEFORE SHRI U. B. S. BEDI, JUDICIAL MEMBER AND SHRI T. S. KAPOOR , ACCOUNTANT MEMBER ITA NO. 5130 / DEL/ 2012 (ASSESSMENT YEAR 2009-10) ITO, WARD 11(2), VS. M/S. FIRST COUNTRY WIDE NEW DELHI CONSULTATIONS PVT. LTD., 21, RECTANGALE-1 , D-4, DISTRICT CENTRE, SAKET, NEW DELHI-110017 PAN : AAMCS4367B C.O. NO.467/DEL/2012 (ASSESSMENT YEAR 2009-10) M/S. FIRST COUNTRY WIDE VS. ITO, WARD 11(2), CONSULTATIONS PVT. LTD., NEW DELHI 21, RECTANGALE-1, D-4, DISTRICT CENTRE, SAKET, NEW DELHI 110 017 (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI C S AGGARWAL, SR. ADV. DEPARTMENT BY: MS. Y KAKKAR, SR. DR ORDER PER U B S BEDI, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE AND C.O. BY THE ASSESSE E ARE DIRECTED AGAINST THE ORDER PASSED BY LD. CIT(A) XIII, NEW DE LHI DATED 16.07.2012 RELEVANT TO ASSESSMENT YEAR 2009-10. I.T.A. NOS. 5130 & C.O.467 /DEL/2012 2 2. IN THE APPEAL OF THE REVENUE, FOLLOWING TWO EFFE CTIVE GROUNDS ARE RAISED: 1. THE LD. CIT(A) HAS ERRED ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW IN DELETING THE ADDITION OF RS.68,1 7,784/- WITHOUT FULFILLING THE CONDITIONS LAID DOWN U/S 10B OF THE I. T. ACT, 1961. 2. THE LD. CIT(A) HAS ERRED ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW FOR ALLOWING RS.6,50,894/- BY INCOR RECTLY INVOKING SECTION 14A OF THE I. T. ACT, 1961 READ WITH RULE 8 D OF THE INCOME TAX RULES 1962. 3. IN THE C.O. OF THE ASSESSEE, FOLLOWING GROUNDS H AVE BEEN RAISED: 1. THAT THE LD. CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN NOT CONSIDERING THE ALTERNATE CLAIM OF DEDUCTION U/ S 10A OF THE ACT, DESPITE THE FACT THAT A SPECIFIC GROUND WAS RAISED IN THE GROUNDS OF APPEAL FILED BEFORE THE LD. CIT(A). 2. THAT LD. CIT(A) HAS FAILED TO APPRECIATE THAT S INCE THE ASSESSEE HAS DULY COMPLIED ALL THE CONDITIONS U/S 1 0A OF THE ACT,. AND HAS ALSO PLACED ON RECORD A REPORT OF AN ACCOUNTANT IN FORM NO.56F IN LIGHT OF PROVISIONS CONTAINED IN SECTION 10A(5) READ WITH RULE 16B OF THE INCOME TAX RULES, AS SUCH, DEDUCTION CLAIMED U/S 10A OF THE ACT SHOULD HAVE BEEN ALLOWED, DESPITE THE FACT (IN ANY CASE AND WITHOUT PREJUDICE) THE ASSESSEES CLAIM FOR THE DEDUCTION O F IDENTICAL AMOUNT HAD BEEN ALLOWED IN THE PRECEDING SIX YEARS U/S 10B OF THE ACT. 4. AS REGARDS THE 1 ST GROUND IN REVENUES APPEAL, THE A.O. HAS DISALLOWE D THE CLAIM OF THE ASSESSEE U/S 10B OF THE I. T. ACT, 1961 OF RS.68,17,784/-, MAINLY ON THE FOLLOWING REASONS: I) THE ASSESSEE HAS SIMPLY FILED A COPY OF STPI AP PROVAL GRANTED BY THE ASSISTANT DIRECTOR, STPI, MINISTRY OF COMMUN ICATION & INFORMATION TECHNOLOGY, NOIDA, UP. THE ASSESSEE HA S FAILED TO PROVIDE A COPY OF APPROVAL GRANTED BY THE STATUTORY BOARD REFERRED TO IN EXPLANATION TO SECTION 10B OF THE ACT. MERE APP ROVAL GRANTED BY I.T.A. NOS. 5130 & C.O.467 /DEL/2012 3 THE STPI FOR SETTING UP 100% EOU IS NOT SUFFICIENT FOR GRANT OF DEDUCTION U/S 10B OF THE ACT. II) THE ASSESSEE HAS FAILED TO PROVIDE A COPY OF A PPROVAL FROM THE DEVELOPMENT COMMISSIONER, AS CLARIFIED BY CBDT INST RUCTION NO.2/20-09. III) NO EVIDENCE HAS BEEN FURNISHED BY THE ASSESSE E WITH REGARD TO THE DELEGATION OF POWER BY THE BOARD TO THE DEVELOP MENT COMMISSIONER OF RESPECTIVE SEZ. IV) NO EVIDENCE HAS BEEN FURNISHED BY THE ASSESSEE WITH REGARD TO FURTHER RATIFICATION BY THE BOARD OF APPROVAL FOR E OU SCHEME TO THE APPROVAL GRANTED BY THE DEVELOPMENT COMMISSIONER. 5. HOWEVER, LD. CIT(A) HAS ALLOWED THE ABOVE DISALL OWANCE OF RS.68,17,784/- STATING THAT ASSESSEE IS ENTITLED TO DEDUCTION U/S 10B OF THE ACT. AS THE ASSESSEE WAS GRANTED APPROVAL AS 100% EXPORT ORIENTED UNIT VIDE GREEN CARD NO. DOE/STPI N/2003/1119 DATED 23.1 0.2002 WHICH WAS RENEWED UP TO 17.09.2012 VIDE LETTER NO.PCMG/PSE/06 /1214/59328 DATED 20.11.2008. THIS APPROVAL HAS BEEN GRANTED IN TERM S OF PROVISIONS OF PARA 6.3.9 OF FOREIGN TRADE POLICY FOR A PERIOD OF FIVE YEARS WHICH HAS BEEN FURTHER EXTENDED FOR A FIVE YEARS MORE BY AN ORDER OF EXTENSION DATED 26.07.2007. THE LD. CIT(A) STATED THAT APPROVAL GR ANTED BY STPI, NOIDA AS AN 100% EXPORT ORIENTED UNDERTAKING CONSTITUTES A V ALID APPROVAL FOR THE PURPOSE OF SECTION 10B OF THE ACT AND THUS UNDERTAK ING OF THE APPELLANT IS AN ELIGIBLE UNDERTAKING AND FURTHER STATED THAT THE CL AIM OF THE APPELLANT U/S 10B HAS BEEN ACCEPTED AND ALLOWED IN PRECEDING YEARS AL SO. 6. THE ACTION OF LD. CIT(A) HAS BEEN CHALLENGED IN APPEAL BEFORE THIS BENCH AND IT WAS CONTENDED THAT LD. CIT(A) HAS ERRE D ON FACTS, CIRCUMSTANCES AND LAW IN DELETING THE ADDITION OF R S.68,17,784/- WAS I.T.A. NOS. 5130 & C.O.467 /DEL/2012 4 FULFILLED THE CONDITIONS LAID DOWN U/S 10B OF THE I . T. ACT, 1961. THIS ISSUE HAS SINCE BEEN DECIDED BY THE HONBLE DELHI HIGH CO URT IN THE CASE OF CIT VS REGENCY CREATIONS LTD. VIDE ORDER DATED 30.11.20 12. BOTH THE SIDES AGREED AND SUBMITTED THAT THE ISSUE IN RELATION TO SECTION 10B DEDUCTION NEEDS TO BE DECIDED IN FAVOUR OF THE REVENUE IN VIE W OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF RE GENCY CREATIONS LTD. VIDE ORDER DATED 30.11.2012, THEREFORE, THE SAME CA N BE CONCLUDED IN FAVOUR OF THE REVENUE. 7. AFTER HEARING BOTH THE SIDES AND CONSIDERING THE MATERIAL ON RECORD AND ALSO THE PRECEDENT RELIED UPON BY THE RIVAL SID ES, WE SET ASIDE THE ORDER OF LD. CIT(A) AND RESTORE THAT OF THE A.O. IN THIS REGARD WHILE FOLLOWING THE HONBLE JURISDICTIONAL HIGH COURT DECISION RENDERED IN THE CASE OF REGENCY CREATIONS LTD. (SUPRA). THIS GROUND OF APPEAL OF T HE REVENUE GETS ACCEPTED. 8. AS REGARDS THE 2 ND GROUND, NO ARGUMENT HAS BEEN ADVANCED BY THE REVENUE IN THIS REGARD. THEREFORE, WE DO NOT FIND ANY APPROPRIATE BASIS TO ADJUDICATE UPON THIS ISSUE. 8.1 AS A RESULT, APPEAL OF THE REVENUE GETS PARTLY ACCEPTED. 9. AS REGARDS C.O. OF THE ASSESSEE, THE ASSESSEE HA S FILED NOTICE OF MOTION UNDER RULE 27 OF THE INCOME TAX APPELLATE TR IBUNAL RULES 1963 MAINLY TO SEEK DEDUCTION U/S 10A BY PLEADING THAT T HE CASE OF THE ASSESSEE IS COVERED BY RULE 27 OF ITAT RULES AS THE ASSESSEE BE ING THE RESPONDENT MAY SUPPORT THE ORDER APPEALED AGAINST ON ANY OF THE GR OUNDS DECIDED AGAINST HIM AND ALTERNATIVE GROUND RAISED BY THE ASSESSEE B EFORE THE FIRST APPELLATE AUTHORITY FOR ALLOWING THE SAME U/S 10A HAS NOT BEE N ADJUDICATED UPON. THEREFORE, THE SAME MAY BE CONSIDERED AND ALLOWED A S THE CONDITIONS PRESCRIBED FOR DEDUCTION U/S 10A AND 10B ARE SIMILA R AND IDENTICAL. I.T.A. NOS. 5130 & C.O.467 /DEL/2012 5 THEREFORE, IT WAS PLEADED FOR ALLOWING THE DEDUCTIO N U/S 10A OF THE I. T. ACT, 1961 FOR THE SAME AMOUNT WHICH WAS CLAIMED U/S 10B. 10. LD. D.R. STRONGLY OPPOSED THE PLEA OF THE ASSES SEE AND SUBMITTED THAT CONDITIONS FOR DEDUCTION U/S 10B HAVE NOT BEEN FULF ILLED. MOREOVER, THE FACTS ARE NOT ON RECORD AND IN FACT, THE ASSESSEE H AS NOT CLAIMED DEDUCTION U/S 10A. THE FACTS ARE NOT THERE, ELIGIBILITY CONDITIO NS ARE NOT MET. SO, ALTERNATIVE CLAIM OF THE ASSESSEE CANNOT BE ALLOWED IN VIEW OF THE FACT THAT THE CONDITIONS ARE NOT FULFILLED. SINCE THE CONDIT IONS PRESCRIBED FOR DEDUCTION U/S 10B AND DEDUCTION U/S 10A ARE MATERIA LLY DIFFERENT, SO, RELYING UPON THE CASE OF REGENCY CREATIONS (SUPRA) IN WHICH MISCELLANEOUS PETITION OF THE ASSESSEE WAS DECIDED BY THE HONBLE HIGH COU RT ON 30.11.2012 IN CM NO.19897/2012 AND THE CASE IN HAND ARE DIFFERENT , THE RATIO OF THAT CASE CANNOT BE APPLIED HERE, IT WAS PLEADED BY LD. D.R. FOR DISMISSAL OF THE C.O. OF THE ASSESSEE. 11. IN ORDER TO COUNTER THE SUBMISSIONS OF THE LD. D.R., LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PROVISIONS OF SECTI ON 10A AND SECTION 10B OF THE ACT ARE SIMILAR AND IDENTICAL, THEREFORE, IF FOR ANY REASON, THE CLAIM OF THE ASSESSEE HAS NOT BEEN ALLOWED U/S 10B, IT COULD VALIDLY BE ALLOWED U/S 10A OF THE I. T. ACT, 1961, THE SAME MAY BE ALLOWED . LD. D.R. SUBMITTED THAT THE REQUIREMENT OF THE CONDITIONS TO BE FULFIL LED IS GIVEN AT PAGE 15 OF THE ASSESSMENT ORDER AND IN FACT THE DETAILS REQUIR ED ARE ALSO NOT ON RECORD, THEREFORE, THE PLEA OF THE ASSESSEE MAY BE DISMISSE D. 12. WE HAVE HEAD BOTH THE SIDES, CONSIDERED THE MAT ERIAL ON RECORD AS WELL AS PRECEDENT RELIED UPON BY THE RIVAL SIDES AN D FIND THAT THE ASSESSEE HAS RAISED ALTERNATIVE GROUND BEFORE THE FIRST APPELLAT E AUTHORITY THAT IN CASE, DEDUCTION U/S 10B CANNOT BE ALLOWED, THE CLAIM OF T HE ASSESSEE SHOULD BE CONSIDERED U/S 10A BUT FROM THE ORDER OF LD. CIT(A) , IT IS FOUND THAT SUCH I.T.A. NOS. 5130 & C.O.467 /DEL/2012 6 GROUND HAS NOT AT ALL BEEN ADMITTED / REJECTED OR C ONSIDERED BY LD. CIT(A). THEREFORE, IN THE INTEREST OF JUSTICE AND TO HAVE F AIR PLAY IN THE MATTER, IT WOULD BE JUST AND APPROPRIATE TO SET ASIDE THE ORDE R OF LD. CIT(A) IN THIS REGARD AND RESTORE THE MATTER BACK TO THE FILE OF L D. CIT(A) FOR CONSIDERING THE ADMISSIBILITY OR NON-ADMISSIBILITY OF SUCH ALTE RNATIVE PLEA RAISED BY THE ASSESSEE AND IF THE SAME IS FOUND TO BE ADMISSIBLE THEN, DECIDE THE SAME UNDER THE RELEVANT PROVISIONS OF LAW AND PASS SPEAK ING ORDER. SO, THIS GROUND OF THE CROSS OBJECTION OF THE ASSESSEE GETS ACCEPTED FOR STATISTICAL PURPOSES. 13. AS A RESULT, THE CROSS OBJECTION OF THE ASSESSE E GETS ACCEPTED FOR STATISTICAL PURPOSE. 14. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOV., 2013. SD./- SD./- (T. S. KAPOOR) (U.B.S.BEDI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND NOV., 2013 SP. COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A)-XXV, NEW DELHI AR, ITAT, 5. CIT(ITAT), NEW DELHI NEW DELHI