DCIT, New Delhi V. M/s. NTT Data Global Delivery Services Ltd., Gurgaon

ITA 5197/DEL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2684 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 22-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEFALI SAWROP
• Section: 143(3); 10AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E , NEW DELHI BEFORE SH. H.S. SIDHU , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 5197 /DE L/ 2014 ASSESSMENT YEAR : 2009 - 10 DCIT, CIRCLE - 13(1), NEW DELHI VS. NTT DATA GLOBAL DELIVERY SERVICES LTD. (FORMERLY KNOWN AS KEANE INDIA LTD.) UNITECH TRADE CENTRE, 4 TH FLOOR, SEC - 43, SUSHANT LOK, PHASE - I, GURGAON PAN : AABCK7777J (APPELLANT) (RESPONDENT) APPELLANT BY MS. SEFALI SAWROP, CIT(DR) RESPONDENT BY NONE DATE OF HEARING 13.07.2017 DATE OF PRONOUNCEMENT 31.07.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE R EVENUE IS DIRECTED AGAINST ORDER DATED 26/06/2014 OF THE COMMISSIONER OF INCOME - TAX (APPEALS) - XVI, NEW DELHI (IN SHORT THE CIT - A ) FOR ASSESSMENT YEAR 2009 - 10 , RAISING FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID.CIT(A) HAS ERRED IN LAW AND IN FACTS OF THE CASE IN DIRECTING THE AO TO DELETE THE ADD ITIONS MADE BY THE AO WITH REGARD TO THE DEDUCTION AVAILED U/S 10A FOR UNIT 4, BY IGNORING THE FACTS RECORDED BY THE AO IN HIS ASSESSMENT ORDER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT( A) ERRED IN LAW AND IN FACTS OF THE CASE FC . NOT CONSIDERING THE FACT THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID U/S 10A OF THE ACT 2 ITA NO . 5197/DEL/2014 AND WAS NEITHER SET UP UNDER STP AND NOR CUSTOM BONDED AT THE TIME OF THE SET UP OF ESTABLISHMENT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN LAW AND IN FACTS OF THE CASE BY NOT CONSIDERING THE FACT THAT THE DECISIONS RELIED UPON BY THE LD. CIT(A) HAS ALREADY BEEN CHALLENGED BEFORE VARIOUS APPELLATE AUTHORITIES. 4. THE A PPELLANT CRAVES TO BE ALLOWED TO ADD ANY FRESH GROUNDS OF APPEAL AND/OR DELETE OR AMEND ANY OF THE GROUNDS OF APPEAL. 2. B RIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY WAS ENGAGED IN THE BUSINESS OF PRO VIDING INFORMATION TECHNOLOGY ( IT A ND IT - ES) SERVICES PRIMARY TO ITS GROUP COMPANIES. THE ASSESSEE F ILED ORIGINAL RETURN OF INCOM E DECLARING TOTAL INCOME OF RS. 31,73,20,720/ - . IN THE RETURN OF INCOME FILED , THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10 A/10 AA OF THE ACT , HAVING DETAIL AS UNDER: UNIT DEDUCTION UNDER SECTION 10A/ 10AA OF THE ACT AMOUNT IN RS UNIT 4 10A 159,471,595 UNIT 5 10A 97,298,816 UNIT 6 10A 418,822,413 UNIT 7 10A 28,589,496 HYDERABAD 2 10A 161,349,923 HYDERABAD 3 10A 77,677,634 NOIDA 2 10AA 10,603,156 GURGAON UNIT 10A 200,554,750 GURGAON UNIT 10A 174,427,836 TOTAL 1,328,795,619 3. T HE ASSESSEE REV ISED ITS RETURN OF INCOME ON 31/03/2011 AND REDUCE D ITS CLAIM OF DEDU CTION UNDER SECTION 10A A OF THE ACT TO 50% AS AGAINST HUNDRED PERCENT DEDUCTION CLAIMED ERRONEOUSLY IN THE ORIGINAL RETURN OF INCOME . THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ) WAS ISSUED 3 ITA NO . 5197/DEL/2014 AND COMPLIED WITH . IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT ON 28/03/2013 THE ASSESSING OFFICER DISALL OWED DEDUCTION UNDER SECTION 10 A OF THE ACT WITH RES PECT TO UNIT - 4 AMOUNTING TO RS.15,94, 71,545/ - AND DISALLOWED DEDUCTION UNDER SECTION 10A/10AA OF THE ACT ON OTHER INCOME AMOUNTING TO RS.24,43,45, 880/ - . AGGRIEVED , THE ASSES SEE FILED APPEAL BEFORE THE LD. CIT - A, WHO ALLOWED PART RELIEF TO THE ASSESSEE. AGGRIEVED , THE R EVENUE IS IN APPEAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 4. IN THE GROUNDS RAISED , THE R EVENUE IS AGGRIEVED WITH DISALLOWANCE OF DEDUCTION UNDER SECTION 10A WITH RESPECT TO UNIT - 4, AMOUNTING TO RS. 15,94,71,545/ - DELETED BY THE LD. CIT - A. 5. BEFORE US , LD. CIT ( DR ) RELIED ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT ORDERS OF THE ITAT RELIED UPON BY THE LD. CIT - A HAS BEEN CHALLENGED BEFORE THE HON BLE HIGH COURT AND THEREFORE REQUESTED THAT ISSUE MAY BE DECIDED ON THE MERIT. NONE ATTENDED ON BEHALF OF THE ASSESSEE. 6. WE HAVE HEARD THE SUBMISSION OF THE LD. CIT( DR ) ON THE I SSUE IN DISPUTE. WE FIND THAT THE LD. CIT - A HAS ALLOWED RELIEF TO THE ASSESSEE FOLLOWING THE ORDER OF THE ITA T , BANGALORE BENCH FOR ASSESSMENT YEAR 2001 - 02, 2003 - 04, 2004 - 05, 2006 - 07, 2007 - 08 AND 2008 - 09. THE LD. CIT - A HAS SUMMED UP THE GRIEVANCE OF THE R E VENUE AND DECIDED THE ISSUE FOLLOWING THE ORDER OF THE TRIBUNAL AS UNDER: 4.1.1 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE A/R OF THE APPELLANT COMPANY, THE FACTS OF THE CASE AS WELL AS THE FINDINGS OF THE A.O. GROUND NO. 1 OF APPEAL IS GENERAL IN NATURE AND NOT PRESSED FOR BY THE APPELLANT. THEREFORE, NO ADJUDICATION IS CALLE D FOR. IN GROUND NOS. 2 & 3 OF APPEAL THE APPELLANT HAS TAKEN THE PLEA THAT AO HAS ERRED BY HOLDING THAT THE STPI UNIT 4 IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING IT & ITES SERV ICES PRIMARILY TO ITS GROUP COMPANIES. AO OBSERVED THAT THE UNIT REGISTERED WITH STP 4 ITA NO . 5197/DEL/2014 AUTHORITIES SHOULD COMMENCE PRODUCTION ONLY IN THE CUSTOMS BONDED AREA. IN THE ASSESSEE S CASE IT HAS OBTAINED THE LICENSES FOR PRIVATE BONDED WAREHOUSE FROM THE CUSTOMS D EPARTMENT FOR UNIT 4 ON 15.09.1999. AS PER THE AUDIT REPORT FILED U/S 10A(5) IN FORM NO. 56F, THE COMMENCEMENT OF PRODUCTION STARTED IN THE UNIT 4 ON 09.08.1999 I.E. MUCH BEFORE OBTAINING THE LICENSE FOR BONDED WAREHOUSE. THEREFORE, THE ASSESSEE HAS STARTE D IT PRODUCTION MUCH BEFORE THE CUSTOMS BONDING HAPPENED ON THE PREMISES. THEREFORE, AO HELD THAT THE ASSESSEE HAS CLAIMED EXEMPTION OF INCOME U/S 10A OF THE IT ACT, WHICH IS DERIVED FROM A UNIT. NOT SET UP IN ACCORDANCE WITH THE STPI SCHEME, AND HENCE THE SAME IS TO BE DENIED. THE CLAIM OF DEDUCTION U/S 10A FOR UNIT 4 OF THE CORRESPONDING AMOUNT OF RS. 15,94,71,595/ - IS DISALLOWED B% THE AO. 4.1.2 IT IS SEEN THAT IDENTICAL DISALLOWANCE WAS MADE BY THE AO ON THE ABOVE ISSUE IN THE CASE APPELLANT FOR THE AY 2001 - 02, 2003 - 04, 2004 - 05, 2006 - 07, 2007 - 08 AND 2008 - 09 AND THE ISSUE WAS DECIDED BY HON BLE 1TAT BANGALORE IN FAVOUR OF THE APPELLANT AS UNDER: - 2.21 THIS BENCH IN THE CASE OF INFOSYS TECHNOLOGY HAS HELD THAT IF THE FIRST SALE IS EFFECTED AFTER THE UNIT IS RECOGNIZED AS STP, THEN THE ASSESSEE IS ENTITLED TO BENEFIT OF SEC 10A EVEN THOUGH THE UNIT STARTED PRODUCTION BEFORE IT BECOME A STP UNIT. IN THE INSTANT CASE, THE ASSESSEE HAS DEMONSTRATED THAT FIRST INVOICE HAS BEEN RAISED AFTER IT HAS OBTAINED THE APPROVAL OF STPI. THUS, THE ISSUE OF CLAIM OF EXEMPTION U/S 10A IS COVERED BY THE DECISIONS OF THIS BENCH VIDE ORDER DT. 5 TH JULY, 20005 IN ITA NO . 101/BANG/140 FOR THE ASST. 1997 - 98 IN THE CASE OF M/S INFOSYS TECHNOLOGIES LTD. FOLLOWING THAT ORDER, WE HOLD THAT THE ID. CIT(A) WAS JUSTIFIED IN ALLOWING EXEMPTION U/S 10A FOR UNITS 2, 3 AND 4. IN RESPECT OF UNIT 4, THE DEDUCTION IS HELD AS ADMISSIBLE AS THE FIRST INVOICE IS RAISED AFTER STPI APPROVAL. AS THE FACTS AND CIRCUMSTANCES ARE IDENTICAL, THEREFORE, THE ABOVE DECISION OF HON BLE 1TAT IN THE ASSESSEE S OWN CASE IS SQUARELY APPLICABLE TO THE ISSUE IN THE APPEAL. THEREFORE, RESPECTFULLY FOLLOWI NG THE ABOVE DECISION IT IS HELD THAT UNIT 4 IS ADMISSIBLE FOR DEDUCTION U/S 10A AND THE GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. THE APPEAL IS ALLOWED IN GROUND, NOS. 2 & 3 OF APPEAL. 5 ITA NO . 5197/DEL/2014 7. THE LD. CIT ( DR ) COULD NOT BRING ANY ADVERSE FINDING OF THE HIGHER APPELLATE COURT ON THE ISSUE IN DISPUTE AND IN ABSENCE OF WHICH, WE FIND NO ERROR IN THE ORDER OF THE LD. CIT - A IN FOLLOWING THE ORDER OF THE TRIBUNAL. IN OUR OPINION, THE ORDER OF THE LD. CIT - A ON THE ISSUE IN DISPUTE IS WELL REASONED AND N O INTERFERENCE ON OUR PART IS REQUIRED. ACCORDINGLY , GROUNDS OF THE APPEAL S RAISED BY THE R EVENUE ARE DISMISSED. 8. IN THE RESULT , APPEAL OF THE R EVENUE IS DISMISSED. THE DECISION IS PRONOUN CED IN THE OPEN COURT ON 3 1 S T JULY , 201 7 . S D / - S D / - ( H.S. SIDHU ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 3 1 S T JULY , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI