M/s. PSI Data Systems Limited, Bangalore V. CIT-III, Bangalore

ITA 547/BANG/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2017 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-12-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREETHI GARG
• Assessee Lawyers: PRASHANTH
• Keywords: Depreciation; Unabsorbed depreciation
• Section: 80HH

Judgement Text

ITA.547/B/09 PAGE - 1 IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' BEFORE SHRI. K. P. T. THANGAL, VICE PRESIDENT AND SHRI. A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER I.T.A.NO.547/BANG/2009 (ASSESSMENT YEAR : 2001-02 ) M/S. PSI DATA SYSTEMS LTD., 2ND FLOOR, 'FAIRWINDS', EMBASSY GOLF LINKS BUSINESS PARK, INTERMEDIATE RING ROAD, BANGALORE 560 071 .. APPEL LANT V. COMMISSIONER OF INCOME TAX - III, BANGALORE .. RESPONDENT APPELLANT BY : SHRI. PRASHANTH RESPONDENT BY : SMT. PREETHI GARG O R D E R PER K. P. T. THANGAL, VICE PRESIDENT : THE ONLY EFFECTIVE GROUND OF OBJECTION BY THE ASSE SSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (A) U/S.263 IN DIRECTING THE ASSESSING OFFICER TO SET OFF THE BROU GHT FORWARD LOSSES WHILE CALCULATING BUSINESS PROFIT ELIGIBLE FOR DEDU CTION U/S.10A. 2. ON PERUSAL OF RECORDS, THE COMMISSIONER OF INCOM E-TAX FORMED THE OPINION THAT UNABSORBED BUSINESS LOSS AND DEPRE CIATION LOSS OF ITA.547/B/09 PAGE - 2 EARLIER YEARS WAS NOT SET OFF FROM THE PROFIT OF ST PI UNIT BEFORE ALLOWING DEDUCTION U/S.10A. CONSEQUENTLY EXCESSIVE DEDUCTION HAS BEEN ALLOWED AND, THEREFORE, HE HELD THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO T HE INTERESTS OF REVENUE. THUS, HE INVOKED THE JURISDICTION U/S.263 AND DIRECTED THE ASSESSING OFFICER TO SET OFF THE BUSINESS LOSS AND DEPRECIATION OF EARLIER YEARS FOR THE PURPOSE OF COMPUTING DEDUCTIO N U/S.10A. THE ASSESSEE'S CONTENTION WAS REJECTED BY THE COMMISSIO NER OF INCOME- TAX, DISTINGUISHING THE FOLLOWING CASES RELIED UPON BY THE ASSESSEE : I) ACIT V. YOKOGAWA INDIA LTD., - 13 SOT 470 (ITAT, BANGALORE) II) ITO V. M/S. SCT SOFTWARE SOLUTIONS (INDIA) P. L TD., IN ITA.1014/BANG/2004, DT.19.6.2006 III) TCS - BTS INDIA P. LTD., V. ACIT - ITA.590/BAN G/2009 IV) NOUS INFOSYSTEMS P. LTD., V. ITO-ITA.1042/BANG/ 2007, DT.30.6.08 V) I GATE GLOBAL SOLUTIONS P. LTD., - ITA.248 & 249 /BANG/2007, DT.27.11.07 3. WE FIND EXACTLY IDENTICAL ISSUES WERE CONSIDERED BY THE TRIBUNAL PARTICULARLY IN THE CASE OF GE INDIA EXPOR TS P. LTD., IN ITA.724/BANG/2008, DT.30.1.2009, WHEREIN IT WAS HEL D THAT DEDUCTION U/S.10A SHALL BE ALLOWED WITHOUT SETTING OFF OF BRO UGHT FORWARD LOSSES/UNABSORBED DEPRECIATION. WHILE COMING TO TH E ABOVE CONCLUSION THE TRIBUNAL ALSO RELIED ON THE DECISION OF THE BANGALORE BENCH IN THE CASE OF ACIT V. WEBSPECTRUM SOFTWARE P . LTD., IN ITA.547/B/09 PAGE - 3 ITA.387/BANG/2006, DT.26.6.2007 AND ALSO THE DECISI ON OF THE TRIBUNAL IN THE CASE OF NOUS INFOSYSTEMS P. LTD., V . ACIT IN ITA NOS.589 AND 666/BANG/2008, DT.7.11.08. IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN ALLOWING THE APPEAL BY THE AS SESSEE. 4. THE LEARNED DR ON THE OTHER HAND BROUGHT OUR ATT ENTION TO THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F SYNCO INDUSTRIES LTD., V. ASSESSING OFFICER (INCOME-TAX) AND ANOTHER IN (2008) 299 ITR 444 (SC) WHEREIN THE HON'BLE SUPREME COURT HELD THAT THE LOSS FROM ONE DIVISION WAS REQUIRED TO BE ADJUSTED BEFOR E DETERMINING GROSS TOTAL INCOME AND IF THE GROSS TOTAL INCOME AF TER THIS ADJUSTMENT IS NIL, THE ASSESSEE WAS NOT ENTITLED TO CLAIM DEDU CTION UNDER CHAPTER VIA WHICH INCLUDES DEDUCTIONS U/S.80HH AND 80I. WE ARE NOT INCLINED TO ACCEPT THE VIEW CANVASSED BY THE DR, AS THE HON'BLE SUPREME COURT WAS DEALING WITH SECITONS 80HH AND 80 I. 5. IN THE RESULT, APPEAL BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN OPEN COURT ON 11TH DAY OF DECEMBER, 2 009. SD/- SD/- (A. MOHAN ALANKAMONY) (K. P. T. THANGAL) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE DATED : 11TH DECEMBER, 2009 MCN* ITA.547/B/09 PAGE - 4 COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, NEW DELHI 7. GF, ITAT, BANGALORE