ITO, New Delhi V. M/s. Mosaic ITES Services (P) Ltd., Noida

ITA 5600/DEL/2014

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5562 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 15-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R SENAPATI SENIOR
• Keywords: Revised return
• Section: 10AA; 115JB; 10B; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.5600/DEL./2014 (ASSESSMENT YEAR : 2011-12) ITO, WARD 5 (4), VS. M/S. MOSAIC ITES SERVICES (P) LTD., NEW DELHI. SDF 9 & 10, NSEZ PHASE II, NOIDA 201 305 (U.P.) (PAN : AAECM4391F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ATUL PURI, CA REVENUE BY : SHRI S.R. SENAPATI, SENIOR DR DATE OF HEARING : 09.04.2018 DATE OF ORDER : 13.04.2018 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, INCOME-TAX OFFICER, WARD 5 (4), NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) BY FILIN G THE PRESENT APPEAL, SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATE D 11.07.2014 PASSED BY LD. CIT(APPEALS)-VIII, NEW DELHI QUA THE ASSESSMENT YEAR 2011-127 ON THE GROUNDS INTER ALIA THAT :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS OF RS.69,89,940/- MADE BY THE AO ON ACCOU NT OF WITHDRAWING THE CLAIM OF DEDUCTION UNDER SECTION 10B OF THE I.T. ACT 1961? ITA NO.5600/DEL./2014 2 2 WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) HAS IGNORED THAT THE ASSESSEE COMPANY ITSELF HAD WITHDRAWN THE DEDUCTION CLAIMED U/S 10B OF THE I.T. ACT 1961? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) HAS IGNORED THAT THE AUDITOR OF THE COMPANY HAD SUBMITTED ITS REPORT THA T THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10 B OF THE I.T. ACT 1961 BUT NOT ELIGIBLE WHEN CALCULATING THE BOOK PROFIT FOR TAX UNDER SECTION 115JB OF THE I.T. ACT 1961? 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) HAS ERRED IN ALLOWIN G THE DEDUCTION UNDER SECTION 10AA OF THE I.T. ACT 1961 F OR WHICH ASSESSEE COMPANY WAS NOT ELIGIBLE? 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) HAS IGNORED THAT THE ASSESSEE COMPANY HAD NOT FURNISHED THE AUDIT REPORT IN FORM 56 FOR ITS CLAIM OF DEDUCTION UNDER SECTION 10 AA OF THE I.T. 1961? 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT (A) HAS IGNORED THAT THE ASSESSEE COMPANY HAD NOT CLAIMED THE DEDUCTION IN I TS RETURN OF INCOME WHICH IS BASIC CONDITION FOR CLAIM ING THE DEDUCTION U/S 10AA OF THE I.T. ACT, 1961? 7. THAT THE ORDER OF THE LD. CIT (A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 8. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDIC E TO EACH OTHER. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND ARE : DURING THE YEAR UNDER ASS ESSMENT, THE ASSESSEE COMPANY CLAIMED DEDUCTION TO THE TUNE OF R S.41,70,029/- ITA NO.5600/DEL./2014 3 UNDER SECTION 10A OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) AND FURTHER CLAIMED DEDUCTION U/S 10B OF THE ACT AM OUNTING TO RS.69,89,935/- AND FURTHER CLAIMED DEDUCTION WHILE CALCULATING THE TAX ON BOOK PROFIT U/S 115JB OF THE ACT TO THE TUNE OF RS.69,89,935/-. SUBSEQUENTLY, THE ASSESSEE COMPANY HAD WITHDRAWN THE DEDUCTION U/S 10B CLAIMED IN THE RETU RN OF INCOME BY VIRTUE OF THE LETTER DATED 28.02.2014 AND CLAIME D DEDUCTION U/S 10AA OF THE ACT. AO REJECTED THE CLAIM MADE BY THE ASSESSEE COMPANY FOR CLAIMING DEDUCTION U/S 10AA OF THE ACT AND THEREBY ASSESSED THE TOTAL INCOME OF THE ASSESSEE COMPANY A T RS.69,89,940/-. 3. ASSESSEE COMPANY CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION MADE BY THE AO BY ALLOWING THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PR ESENT APPEAL. 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, GR OUNDS RAISED BY THE REVENUE, ORDER PASSED BY THE LOWER REVENUE A UTHORITIES AND ARGUMENTS ADDRESSED BY THE LD. AUTHORIZED REPRESENT ATIVES OF BOTH ITA NO.5600/DEL./2014 4 THE PARTIES, THE SOLE QUESTION ARISES FOR DETERMINA TION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE COMPANY IS ENTITLED FOR WITHDRAWING THE CLAIM OF DEDUCTION MADE U/S 10B OF THE ACT AND SUBSEQUENTLY CLAIMING DEDUCTION U/S 10AA OF THE ACT WITHOUT FURNISHING AUDITED REPORT IN FORM 5 6 FOR ITS CLAIM OF DEDUCTION U/S 10AA OF THE ACT? 6. UNDISPUTEDLY, ASSESSEE COMPANY HAS WITHDRAWN ITS EARLIER CLAIM OF DEDUCTION MADE U/S 10B QUA CALCULATION OF INCOME UNDER PROVISIONS OF SECTION 115JB ONLY. IT IS ALSO NOT I N DISPUTE THAT DURING THE EARLIER YEARS, THE ASSESSEE COMPANY HAS BEEN ALLOWED DEDUCTION U/S 10B IN COMPUTING ITS INCOME UNDER NOR MAL PROVISIONS, THE DETAILS OF WHICH HAS BEEN DULY DESC RIBED BY LD. CIT (A) AT PAGE 7 OF THE IMPUGNED ORDER. 7. WHEN THE ASSESSEE COMPANY HAS WITHDRAWN THE CLAI M OF DEDUCTION U/S 10B OF THE ACT ON THE GROUND THAT THE SAME HAS BEEN ERRONEOUSLY FILED, WE ARE OF THE CONSIDERED VIEW TH AT THE ASSESSEE COMPANY IS ENTITLED TO CLAIM THE SAME UNDER NORMAL PROVISIONS IF THE CLAIM IS OTHERWISE ADMISSIBLE. 8. HONBLE HIGH COURT OF MADRAS IN CASE CITED AS CIT VS. M/S. ABHINITHA FOUNDATION PVT. LTD. IN T.C. (A) NO.811 O F 2016 ORDER DATED 06.06.2017 AFTER DISCUSSING VARIOUS DECISION RENDERED BY HONBLE SUPREME COURT AS WELL AS HONBLE HIGH COURT CAME TO THE ITA NO.5600/DEL./2014 5 CONCLUSION THAT, EVEN IF THE CLAIM MADE BY THE ASSESSEE COMPANY DOES NOT FORM PART OF THE ORIGINAL RETURN OR EVEN T HE REVISED RETURN, IT COULD STILL BE CONSIDERED, IF THE RELEVANT MATER IAL WAS AVAILABLE ON RECORD EITHER BY THE APPELLATE AUTHORITIES BY TH EMSELVES OR ON REMAND BY THE AO. 9. BUT, IN THE INSTANT CASE, THE ASSESSEE COMPANY H AS RECTIFIED ITS MISTAKE BY WITHDRAWING THE CLAIM WRONGLY FILED U/S 10B FOR THE PURPOSE OF CALCULATING THE BOOK PROFIT FOR TAX U/S 115JB VIDE LETTER DATED 28.02.2014 DURING THE ASSESSMENT PROCEEDINGS ITSELF. IN OTHER WORDS, THE ASSESSEE COMPANY IS ENTITLED FOR D EDUCTION ADMISSIBLE UNDER THE ACT EVEN IF NOT CLAIMED AND AO IS DUTY BOUND TO ALLOW SUCH LEGITIMATE CLAIM. SO, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT (A) HAS RIGHTLY DIRECTED THE AO TO ALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE COMPANY U/S 10AA BY COMPUTING THE INCOME UNDER NORMAL PROVISIONS. CONS EQUENTLY, QUESTION FRAMED IS ANSWERED IN AFFIRMATIVE. 10. SO FAR AS QUESTION OF CLAIMING DEDUCTION BY THE ASSESSEE COMPANY U/S 10AA OF THE ACT AMOUNTING TO RS.70,11,5 42/- DISALLOWED BY THE AO AND ALLOWED BY THE LD. CIT (A) IS CONCERNED, WHEN THE ASSESSEE COMPANY IS OTHERWISE ELIGIBLE FOR CLAIMING DEDUCTION U/S 10AA OF THE ACT, BEING A NEW SEZ UNIT , AS IS EVIDENT FROM APPROVAL LETTER DATED 22.04.2010 BROUG HT ON RECORD BY ITA NO.5600/DEL./2014 6 THE ASSESSEE COMPANY, THE CLAIM CANNOT BE DISALLOWE D ON THE BASIS OF SURMISES. 11. AO HAS DISALLOWED THE DEDUCTION U/S 10AA MAINLY ON TWO GROUNDS VIZ. :- (I) BOOKS OF ACCOUNT OF THE TAXPAYER SHOULD BE AUDI TED. THE TAXPAYER SHOULD SUBMIT AUDIT REPORT IN FORM 56F ALONG WITH THE RETURN OF INCOME. (II) DEDUCTION U/S 10AA IS NOT AVAILABLE UNLESS IT IS CLAIMED IN THE RETURN OF INCOME. IN OTHER WORDS, I F ASSESSEE FAILS TO MAKE A CLAIM IN HIS RETURN OF INC OME OF THIS DEDUCTION, THE SAME WILL NOT BE ALLOWED. 12. SO FAR AS QUESTION OF DISALLOWING THE CLAIM OF DEDUCTION ON GROUND OF NOT CLAIMING IN THE RETURN OF INCOME IS C ONCERNED, FOR THE SAKE OF REPETITION, IT IS REITERATED THAT THE CLAIM OF DEDUCTION IF OTHERWISE ADMISSIBLE CANNOT BE DENIED EVEN IF NOT C LAIMED IN THE RETURN OF INCOME OR EVEN IN REVISED RETURN OF INCOM E BECAUSE AO IS DUTY BOUND TO ALLOW THE LEGITIMATE CLAIM. AO HAS O THERWISE NOT DISPUTED THE FACT THAT THE ASSESSEE COMPANY IS ELIG IBLE FOR DEDUCTION U/S 10AA OF THE ACT. 13. SO FAR AS QUESTION OF SUBMITTING THE AUDITED BO OKS OF ACCOUNT IN FORM 56 IS CONCERNED, UNDISPUTEDLY THIS IS REQUI REMENT FOR CLAIMING DEDUCTION U/S 10A OF THE ACT AND THERE IS NO PRESCRIBED ITA NO.5600/DEL./2014 7 FORM TO CLAIM DEDUCTION U/S 10AA OF THE ACT AND THI S FACTUAL AND LEGAL POSITION IS ALSO NOT DISPUTED BY THE LD. DR F OR THE REVENUE. 14. SO, WE ARE OF THE CONSIDERED VIEW THAT LD. CIT (A) HAS RIGHTLY DIRECTED THE AO TO ALLOW THE DEDUCTION U/S 10AA OF THE ACT, BUT IT WOULD BE SUBJECT TO VERIFICATION OF THE AUDI T REPORT TO BE PRODUCED BY THE ASSESSEE COMPANY. 15. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, FINDI NG NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER, PRE SENT APPEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF APRIL, 2018. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 13 TH DAY OF APRIL, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-VIII, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.