Spatial Info Lab, Pondicherry V. ITO, Pondicherry

ITA 624/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64340 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-09-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 26-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: M P SENTHIL KUMAR
• Keywords: Opportunity of being heard
• Section: 143(3); 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT ME MBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.624/MDS/2012 (ASSESSMENT YEAR: 2005-06 ) SPATIAL INFO LAB C/O.S.VAITHIANATHAN, 229, AMBALATHADAYAR MADAM STREET, PONDICHERRY-605 001. PAN: AAYFS5865R VS. INCOME TAX OFFICER, WARD-1(2) PONDICHERRY. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. M.P.SENTHIL KUMAR, A DVOCATE RESPONDENT BY : MR. S.DASGUPTA, JCIT DATE OF HEARING : 25 TH SEPTEMBER, 2012 DATE OF PRONOUNCEMENT : 25 TH SEPTEMBER, 2012 O R D E R PER VIKAS AWASTHY, JM: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE IMPUGNING THE ORDER OF THE CIT(A), CHENNAI DATED 31 .1.2012 RELEVANT TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE HAD FILED ITS RETURN OF INCOME RELE VANT TO THE ASSESSMENT YEAR 2005-06 ON 31.10.2005 ADMITTIN G TOTAL INCOME AS NIL AFTER CLAIMING DEDUCTION OF ` 39,02,049/- UNDER SECTION 80IB OF THE ACT. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATED 24.12.2007 MADE ADDITION OF ITA NO.624/MDS/2012 2 ` 39,02,049/- BY DISALLOWING THE CLAIM OF THE ASSESSE E UNDER SECTION 80IB OF THE ACT. 3. AGGRIEVED AGAINST THE ASSESSMENT ORDER THE ASSES SEE PREFERRED AN APPEAL BEFORE THE CIT(A). THE CIT(A) V IDE ORDER DATED 19.09.2008 ALLOWED THE APPEAL OF THE ASSESSEE . AGGRIEVED AGAINST THE ORDER OF THE CIT(A), THE REVE NUE PREFERRED SECOND APPEAL BEFORE THE TRIBUNAL ASSAILI NG THE ORDER OF THE CIT(A) DATED 19.9.2008. THE TRIBUNAL I N ITA NO.34/MDS/2009 DATED 9.10.2009 REMITTED THE MATTER BACK TO THE ASSESSING OFFICER WITH THE FOLLOWING DIRECTIONS :- THE MATTER NEEDS TO BE REMITTED TO THE FILE OF ASSESSING OFFICER TO EXAMINE IN DETAILS WITH THE FACTUAL RECORDS THE PROCESS AND ACTIVITY CARRIED ON BY THE ASSESSEE AND GIVE A FINDING THEREON. NEEDLESS TO ADD THE ASSESSEE SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 4. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATE D 20.9.2010 PASSED UNDER SECTION 143(3) READ WITH SEC TION 254 OF THE ACT DID NOT ACCEPT THE ARGUMENT OF THE ASSE SSEE FOR THE FOLLOWING REASONS:- THE ARGUMENT OF THE ASSESSEES REPRESENTATIVE IS NOT ACCEPTED. THE ASSESSEE WAS DOING THE ACTIVITIES OF SCANNING OF DOCUMENTS AND LAND RECORDS. THE DIGITAL SOFT COPIES OF CADASTRAL MAPS DATA OF LAND ITA NO.624/MDS/2012 3 RECORDS ARE MERE SCANNING OF DOCUMENTS, IT DOES NOT AMOUNT TO ANY MANUFACTURING ACTIVITIES. THE TRANSFORMATION OF A PRODUCT TO THE EXTENT THAT IT BECOMES A COMMERCIALLY DIFFERENT COMMODITY IS MANUFACTURE. THE DIGITAL MAPPING OR LAND PLANNING WILL NOT AMOUNT TO MANUFACTURE OR PRODUCTION OF NEW ARTICLE OR THING OF INDUSTRIAL UNDERTAKING. HENCE T HE CLAIM OF DEDUCTION U/S.80IB MADE BY THE ASSESSEE- FIRM IS REJECTED. THE ASSESSING OFFICER SUSTAINED THE ADDITIONS MADE EARLIER. THE ASSESSEE CARRIED APPEAL TO THE CIT(A). THE CIT( A) VIDE ORDER DATED 31.01.2012 UPHELD THE FINDINGS OF THE ASSESSING OFFICER AND DISMISSED THE APPEAL OF THE ASSESSEE. NOW, THE ASSESSEE HAS COME IN APPEAL BEFORE THE TRIBUNAL IN SECOND ROUND OF LITIGATION. 4. SHRI M.P.SENTHIL KUMAR APPEARING ON BEHALF OF TH E ASSESSEE SUBMITTED THAT THE ASSESSEE IS IN THE BUSI NESS OF COMPUTERIZATION AND DIGITIZATION OF FIELD MAPS AND LAND RECORDS. HE FURTHER SUBMITTED THAT DIGITAL MAPS ARE NOT JUST SCANNED COPIES OF MANUAL MAPS. THEY ARE BASED ON VE CTOR GRAPHICS WHICH USES GEOMETRICAL PRIMITIVES SUCH AS POINTS, LINES, CURVES AND SHAPES OR POLYGONS WHICH ARE ALL BASED UPON MATHEMATICAL EQUATIONS TO REPRESENT IMAGES. I N ORDER ITA NO.624/MDS/2012 4 TO UNDERTAKE THE COMPUTERIZATION AND DIGITIZATION O F MAPS, THE ASSESSEE IS USING COMPUTERS AND TECHNICAL STAFF. T HE PROCESS OF DIGITIZATION OF MAPS IS HIGHLY TECHNICAL AND IS NOT MERELY SCANNING OF MANUAL MAPS. THE COUNSEL APPEARING ON B EHALF OF THE ASSESSEE SUBMITTED THAT IN THE CASE OF THE A SSESSEE ITSELF, THE CO-ORDINATE BENCH OF THE TRIBUNAL IN IT A NO.1472/MDS/2011 RELEVANT TO THE ASSESSMENT YEAR 20 04-05 HAS DECIDED AN IDENTICAL ISSUE IN FAVOUR OF THE ASS ESSEE VIDE ORDER DATED 16 TH MARCH, 2012. HE PLACED ON RECORD A COPY OF THE ORDER IN THE SAID APPEAL. 5. SHRI S.DASGUPTA, APPEARING ON BEHALF OF THE REVE NUE SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THA T THE PROCESS UNDERTAKEN BY THE ASSESSEE DOES NOT AMOUNT TO MANUFACTURING OF NEW PRODUCT AND THUS THE ASSESSEE IS NOT ENTITLED TO BENEFIT UNDER SECTION 80IB OF THE ACT. 6. WE HAVE HEARD THE SUBMISSION MADE BY THE RIVAL PARTIES. WE FIND THAT IN ITA NO.1472/MDS/2011 RELEV ANT TO THE ASSESSMENT YEAR 2004-05 DECIDED ON 16 TH MARCH, 2012 IN THE CASE OF THE ASSESSEE ITSELF, SIMILAR ISSUE HAS BEEN ITA NO.624/MDS/2012 5 ADJUDICATED IN FAVOUR OF THE ASSESSEE . THE RELEVAN T EXTRACT OF THE ORDER IS REPRODUCED HEREIN BELOW:- 7. TAKING INTO CONSIDERATION OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE CASE LAWS RELIED ON BY BOTH SIDES, WE ARE OF THE CONSIDERED OPINION THAT AFTER THE PROCESSING OF DAT A A NEW PRODUCT COMES INTO EXISTENCE AND THUS THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE CAN BE TERMED AS MANUFACTURE. THE ASSESSEE USES SPECIALIZED METHODS AND TECHNICAL STAFF FOR COMPUTERIZATION OF LAND RECORDS AND DIGITIZATION OF MAPS. THE PHYSICAL RAW DATA AFTER PROCESSING TAKES A NEW SHAPE, WHICH CAN BE TRANSPORTED/STORED BY MEANS OF CDS AS WELL AS HARD COPY PRINT OUTS. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT OF INDIA IN ORACLE SOFTWARE INDIA LTD.(SUPRA). THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE FALL WITHIN T HE AMBIT OF DEDUCTION ALLOWABLE UNDER THE PROVISIONS O F SECTION 80IB OF THE ACT. IN VIEW OF OUR ABOVE FINDINGS, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL FILED BY THE REVENUE. 8. IT WOULD NOT BE OUT OF PLACE TO MENTION HERE THA T THE CIT(A) IN THE ASSESSMENT YEAR 2004-05 HAD COME TO T HE CONCLUSION THAT THE ASSESSEE IS ENTITLED FOR DEDUCT ION UNDER SECTION 80IB OF THE ACT, IN VIEW OF THE FACT THAT T HE ACTIVITIES UNDERTAKEN BY THE ASSESSEE AMOUNTS TO PRODUCTION OR MANUFACTURING OF A NEW PRODUCT. WHEREAS, IN THE ASS ESSMENT YEAR UNDER CONSIDERATION, THE CIT(A) HAS TAKEN A CO NTRARY VIEW. ITA NO.624/MDS/2012 6 9. IN VIEW OF OUR ABOVE FINDINGS AND OBSERVATIONS, AND FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH OF THE TRIBUNAL, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE CIT(A ) AND ALLOW THE APPEAL OF THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 25 TH DAY OF SEPTEMBER, 2012 AT CHENNAI. SD/- SD/- (ABRAHAM P.GEORGE) (VIK AS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 25 TH SEPTEMBER, 2012. SOMU COPY TO: (1) APPELLANT (4) CIT(A) (2) RESPONDENT (5) D.R. (3) CIT (6) G.F.