Asst.CIT,Circle - 4(1), Hyderabad V. M/s Vision 2K + INC, Hyderabad

ITA 648/HYD/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7622 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 08-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAVI SESHAGIRI RAO
• Keywords: Revision of order
• Section: 10B; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA.NO.648/HYD/2014 ASSESSMENT YEAR: 2010-2011 ACIT, CIRCLE-4(1) HYDERABAD VS. M/S. VISION 2K +INC HYDERABAD PAN AACFV 4642H (APPELLANT) (RESPONDENT) FOR REVENUE : MR. SOLGY JOSE T. KOTTARAM FOR ASSESSEE : MR. RAVI SESHAGIRI RAO DATE OF HEARING : 13.08.2014 DATE OF PRONOUNCEMENT : 20.08.2014 ORDER PER B. RAMAKOTAIAH, A.M. THIS IS A REVENUE APPEAL AGAINST ORDER OF THE CIT( A)-V, HYDERABAD DATED 23.12.2013. THE ISSUE INVOLVED IN THIS CASE IS ABOUT ALLOWABILITY OF DEDUCTIONS U/S 10B OF THE INCOME-TAX ACT. 2. THE ASSESSING OFFICER WHILE COMPLETING THE ASSES SMENT WAS OF THE VIEW THAT APPROVAL OF THE BOARD APPOINTE D BY CENTRAL GOVERNMENT AS REQUIRED U/S 14 OF THE INDUST RIES (DEVELOPMENT & REGULATION) ACT, 1951 IS NOT AVAILAB LE. IT WAS THE SUBMISSION OF THE ASSESSEE THAT ASSESSEE HAS OB TAINED THE PERMISSION FROM THE DIRECTOR, STPI WHICH APPROVED T HE ASSESSEES FIRM AS 100% EOU VIDE LETTER DATED 29.5. 2000 WHICH IS ALSO FURTHER EXTENDED FOR ANOTHER 5 YEARS AND THIS WAS RATIFIED BY THE BOARD APPOINTED BY THE CENTRAL GOVERNMENT. THE A.O. HOWEVER DID NOT AGREE ON THE REASON THAT THE RATIFICATION WAS NOT SUBMITTED AND HE DENI ED THE CLAIM. 2 ITA.NO.648/HYD/2014 M/S. VISION 2K +INC, HYDERABAD 3. BEFORE THE LD. CIT(A), IT WAS SUBMITTED THAT THE ASSESSEE WAS GRANTED DEDUCTION U/S 10B OF THE ACT IN EARLIER YEARS BY THE ORDERS OF THE CIT(A) IN ITA NO.320/ACIT-4(1)/CI T(A)- V/2010-11 DATED 23.2.2012 AND ALSO BY THE ITAT IN I TA NO.696/HYD/2010 DATED 21.01.2011 FOR THE SAME ASSES SMENT YEAR AGAINST ORDERS U/S 263 OF THE ACT. IN VIEW OF THE ABOVE, LD. CIT(A) HELD THAT THE ASSESSEE IS ELIGIBLE U/S 1 0B OF THE ACT. HE ALSO NOTED THAT CLAIM IN ASSESSMENT YEAR 2008-09 WAS ALSO ALLOWED BY THE PREDECESSOR CIT(A). 4. EVEN THOUGH REVENUE HAS RAISED THE GROUNDS THAT CIT(A) WAS NOT CORRECT IN HOLDING THAT ASSESSEE WAS ELIGIB LE FOR EXEMPTION, NOTHING WAS BROUGHT ON RECORD WHY THE DE DUCTION U/S 10B OF THE ACT SHOULD BE DISALLOWED, AS THE ASS ESSEE HAD VALID APPROVALS FROM THE AUTHORITIES. NOT ONLY THA T WHEN PROCEEDING U/S 263 OF THE ACT WAS UNDERTAKEN FOR AS SESSMENT YEAR 2005-06, THE ISSUE WAS EXAMINED BY THE ITAT IN THE ABOVE REFERRED ORDER AND HELD AS UNDER: WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS ADMITTED FACT THAT THE ASSESSEE HAS OBTAINED THE APPROVAL FROM ST PI, HYDERABAD AS 100% EOU. THE CITS FINDING IS THAT T HE ASSESSEE IS NOT ELIGIBLE FOR RELIEF UNDER SECTION 1 0B OF THE ACT ONLY ON THE GROUND THAT 100% EOU UNDER STPI SCHEME CANNOT BE EQUATED WITH THE 100% EOU APPROVED BY THE BOARD. SINCE WE HAVE ALREADY HELD IN THE CASE OF SUDHARANI (SUPR A) THAT THE APPROVAL OF 100% EOU BY THE BOARD AND STPI IS ONE A ND THE SAME AND HENCE THE ASSESSEE IS ELIGIBLE FOR EXEMPTI ON UNDER SECTION 10B OF THE ACT. IT IS TO BE NOTED THAT THE VALIDITY OF AN ORDER UNDER SECTION 263 OF THE ACT HAS TO BE TESTED WITH REGARD TO THE POSITION OF LAW AS IT EXISTS ON THE DATE ON WHICH SUCH AN ORDER IS PASSED BY THE CIT. IN THE CASE UNDER CONS IDERATION, IT IS CLEAR THAT ON THE DATE, WHEN THE CIT PASSED HIS ORD ER UNDER SECTION 263 OF THE ACT, THE VIEW TAKEN BY THE TRIBU NAL IN THE CASE OF SUDHARANI (SUPRA). IT IS SETTLED LAW THAT WHEN TWO VIEWS ARE POSSIBLE ON THE DATE OF THE ORDER PASSED BY THE COMMISSIONER, THE CIT SHOULD AGREE WITH THE VIEW TA KEN BY THE ASSESSING OFFICER WAS IN CONSONANCE WITH VIEW TAKEN BY THIS TRIBUNAL, EVEN IF THERE HAS BEEN A LOSS OF REVENUE. HENCE, 3 ITA.NO.648/HYD/2014 M/S. VISION 2K +INC, HYDERABAD POWERS UNDER SECTION 263 OF THE ACT CANNOT BE EXERC ISED BY THE CIT. OUR VIEW IS FORTIFIED BY THE JUDGEMENT OF DEL HI HIGH COURT IN THE CASE OF CIT VS. HONDA SIEL POWER PRODUCTS PR IVATE LIMITED IN ITA NOS.1376/2009 AND 1382/2009 DATED 5.7.2010. IN VIEW OF THE ABOVE, WE REVERSE THE ORDER OF THE CIT AND A LLOW THE APPEAL FILED BY THE ASSESSEE. 5. AS MENTIONED BY THE CIT(A), THE ASSESSEE WAS ALL OWED DEDUCTION U/S 10B OF THE ACT IN EARLIER YEARS ALSO. IN VIEW OF THESE FACTS, SINCE ASSESSEE WAS ALLOWED DEDUCTION I N EARLIER YEARS ON A VALID APPROVAL OBTAINED BY IT, WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). THERE IS N O MERIT IN REVENUE GROUNDS. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH AUGUST , 2014. SD/- SD/- (SAKTIJIT DEY) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACOUNTANT MEMBE R HYDERABAD, DATE 20 TH AUGUST, 2014 VG/SPS COPY TO : 1. THE ACIT CIRCLE-4(1), HYDERABAD 2. M/S. VISION 2K + INC, 6-2-929/A, BESIDE ZEE TELU GU CHANNEL, KHAIRATABAD, HYDERABAD 3. THE CIT(A) - V , HYDERABAD 4. THE CIT-IV, HYDERABAD 5. D.R. ITAT, B BENCH, HYDERABAD.