BRANDSCAPES CONSULTANCY P.LTD, MUMBAI V. ITO 5(1)(2), MUMBAI

ITA 6508/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1463 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 09-01-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 27-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 10B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUM BAI , , , , ' BEFORE SHRI C.N.PRASAD, JM AND SHRI RAJESH KUMAR, AM / I.T.A. NO. 6508/MUM/2014 & I.T.A NO.7591/MUM/2014 ( # $# / ASSESSMENT YEAR: 2010-11 & 2011-12) BRANDSCAPES CONSULTANCY PVT. LTD. 2001/2002, ERA- 2, MARATHON NEXT GEN., OFF. G. K .MARG, LOWER PAREL, MUMBAI 400013 / VS. INCOME TAX OFFICER 5(1)(2) ROOM NO.570, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 ./ ./PAN/GIR NO. : AACCB7654E ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 09.01.2017 /DATE OF PRONOUNCEMENT: 04.04.2017 / O R D E R PER C.N.PRASAD, JM: THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE DIFFERENT ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-9, MU MBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] FOR THE A.YS.2010-11 A ND 2011-12. ASSESSEE BY: SHRI VISHWAS MEHENDALE REVENUE BY: SHRI H. M. WANARE ITA NO.6508&7591/M/14 A.Y.2010-11 & 2011-12 2 2. THE ONLY ISSUE IN BOTH THESE APPEALS IS REGARDIN G ALLOWABILITY OF CLAIM FOR EXEMPTION / DEDUCTION U/S.10B OF THE INCO ME TAX ACT, 1961 (IN SHORT THE ACT). THE ASSESSEE ALSO FILED ADDITION AL GROUND CLAIMING THAT ASSESSEE ORIGINALLY WHILE FILING OF RETURN OF INCOM E CLAIMED EXEMPTION / DEDUCTION UNDER 10A OF THE ACT. HOWEVER, SUBSEQUEN TLY, ON THE ADVICE OF THE AUDITORS RETURNED WAS AMENDED CLAIMING EXEMPTIO N / DEDUCTION U/S.10B OF THE ACT. NOW IN THE ALTERNATIVE THE ASS ESSEE CLAIMED DEDUCTION U/S.10A OF THE ACT, IN CASE, THE ASSESSEE WAS HELD THAT IT IS NOT ENTITLED FOR EXEMPTION U/S.10B OF THE ACT. 3. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY SUBMITS THAT ASSESSEE IS ENTITLED FOR EXEMPTION / DEDUCTION U/S. 10B OF THE ACT AND THE CIT(A) FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF M/S. REGENCY CREATIONS LTD. (27 TAXMAN 322) DISM ISSED THE APPEAL OF THE ASSESSEE HOLDING THAT IN ORDER TO CLAIM THE EXE MPTION U/S.10B OF THE ACT, THE ASSESSEE SHOULD HAVE OBTAINED THE APPROVAL FROM THE COMPETENT AUTHORITY I.E. BOARD OF APPROVAL WHICH HAS SPECIFIC ALLY SET UP FOR APPROVAL AN STE / EOU IN ORDER TO QUALIFY FOR THE EXEMPTION U/S.10B OF THE ACT. THE LEARNED COUNSEL SUBMITS THAT SINCE THE PETITION FILED BY THE ASSESSEE BEFORE THE BOARD OF APPROVAL IS STILL PENDING AND N O ORDERS PASSED, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND REJ ECTED THE CLAIM FOR EXEMPTION / DEDUCTION U/S.10B OF THE ACT. 4. THE LEARNED COUNSEL HOWEVER SUBMITS THAT THE ASS ESSEE IN THE ALTERNATIVE ALSO ELIGIBLE FOR EXEMPTION / DEDUCTION U/S.10A OF THE ACT, THEREFORE, THE LEARNED COUNSEL PRAYED BEFORE THIS T RIBUNAL TO GIVEN A DIRECTION TO THE ASSESSING OFFICER TO CONSIDER THE ALTERNATIVE PLEA FOR ITA NO.6508&7591/M/14 A.Y.2010-11 & 2011-12 3 ALLOWING EXEMPTION U/S.10A OF THE ACT. THE LEARNED COUNSEL SUBMITTED BEFORE US COPY OF THE AUDITORS CERTIFICATE CERTIFYI NG THAT ASSESSEE IS ELIGIBLE FOR EXEMPTION / DEDUCTION U/S.10A OF THE ACT. 5. THE LEARNED DR HAD NO SERIOUS OBJECTION IN CONSI DERING THE CLAIM FOR EXEMPTION / DEDUCTION U/S.10A OF THE ACT IF ASSESSE E IS ELIGIBLE SUBJECT TO VERIFICATION AND EXAMINATION BY THE ASSESSING OFFIC ER. 6. ON HEARING BOTH SIDES WE ARE OF THE CONSIDERED V IEW THAT THE CIT(A) HAS RIGHTLY REJECTED THE CLAIM OF THE ASSESSEE FOR EXEMPTION / DEDUCTION U/S.10B OF THE ACT OBSERVING AS UNDER:- 5.1 I HAVE CAREFULLY CONSIDERED THE FACTS AND CIRC UMSTANCES OF THE CASE, STATEMENT OF FACTS, RELEVANT ASSESSMENT ORDER, WRIT TEN SUBMISSION, RELIED UPON CASE LAWS AND THE ARGUMENTS MADE BY THE LAR BE FORE THE UNDERSIGNED. THE ONLY SUBSTANTIVE GROUND IN THIS APPEAL IS THE DENIAL OF EXEMPTION CLAIMED BY THE APPELLANT U/S.10B OF THE I.T.ACT. THE AO HAS PRIMARILY DENIED THE EXEMPTION CLAIMED BY THE APPELLANT ON TH E GROUND THAT IN THE CASE OF THE APPELLANT THERE IS NO APPROVAL FROM THE COMPETENT AUTHORITY I.E. BOARD OF APPROVAL, WHICH HAS BEEN SPECIFICALLY SET UP FOR APPROVALS FOR AN STE / EOU IN ORDER TO QUALIFY FOR THE EXEMPT ION U/S.10B OF I.T.ACT. WHILE COMING TO THIS CONCLUSION THE AO HA S RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF M/S.REGENCY CREATIONS LTD. 27 TAXMAN 322, WHEREIN IT IS CATEGOR ICALLY HELD THAT IN WANT OF APPROVAL FROM THE COMPETENT AUTHORITY I.E. BOARD OF APPROVAL IN THE INSTANT CASE, EXEMPTION U/S.10B IS NOT AVAILABL E TO THE ASSESSEE. THOUGH THE APPELLANT HAS VEHEMENTLY RELIED ON THE D ECISION OF ITAT CHANDIGARH IN THE CASE OF M/S.BEBO TECHNOLOGIES PVT . LTD. (SUPRA) ALONGWITH SOME OTHER DECISIONS, BUT THE SAME ARE NO T RELEVANT BECAUSE IN THE JUDICIAL HIERARCHY THE DECISION OF HONBLE HIGH COURT WILL PREVAIL UPON THE DECISION OF ITAT. THE APPELLANT HAS ALSO ARGUED THAT IT HAS APPLIED FOR THE APPROVAL TO THE BOA AND HIS APPLICA TION HAS NOT BEEN REJECTED SO FAR. IN THIS REGARD, IT IS STATED THAT UNTIL THE FINAL DECISION OF THE BOARD OF APPROVAL IS NOT RECEIVED IT CANNOT BE PRESUMED THAT ULTIMATELY THE SAME WILL BE IN FAVOUR OF THE APPELL ANT. SINCE TILL DATE NO APPROVAL HAS BEEN RECEIVED FROM THE BOA, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ITA NO.6508&7591/M/14 A.Y.2010-11 & 2011-12 4 M/S.REGENCY CREATIONS LTD., IT IS HELD THAT IN WANT OF APPROVAL OF BOA, THE AO HAS CORRECTLY DENIED THE EXEMPTION CLAIMED B Y THE APPELLANT. THE GROUND OF APPEAL IS THEREFORE DISMISSED. 7. HOWEVER, AT THE SAME TIME WE ARE OF THE VIEW THA T THE ALTERNATIVE CLAIM OF THE ASSESSEE FOR EXEMPTION / DEDUCTION U/S .10A OF THE ACT SHOULD BE CONSIDERED AS THE ASSESSEE HAS CLAIMED 10A OF TH E ACT EXEMPTION / DEDUCTION ORIGINALLY IN THE RETURN OF INCOME FILED BUT LATER MODIFY TO 10B OF THE ACT. THE ASSESSING OFFICER SHALL EXAMINE THE A LLOWABILTY OF THE CLAIM U/S.10A OF THE ACT THOROUGHLY AND IF IT IS FOUND TH AT THE ASSESSEE IS ELIGIBLE FOR THE EXEMPTION / DEDUCTION U/S.10A OF THE ACT TH E SAME SHALL BE ALLOWED. THEREFORE ADMIT THE ADDITIONAL GROUND AND RESTORE T HIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL DECIDE THE ALLOWABI LITY OF CLAIM U/S.10A OF THE ACT IN ACCORDANCE WITH LAW AND THE ASSESSEE SHA LL PROVIDE ALL NECESSARY DETAILS IN RESPECT OF ITS CLAIM INCLUDING THE AUDIT REPORT ETC. THE ASSESSING OFFICER SHOULD GIVEN PROPER OPPORTUNITY OF BEING HE ARD TO THE ASSESSEE. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEE ARE HEREBY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH APRIL, 2017 . SD/- SD/- (RAJESH KUMAR) (C.N.PRASAD) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 4 TH '% , 2017 MP ITA NO.6508&7591/M/14 A.Y.2010-11 & 2011-12 5 % &$% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , ( ) / THE CIT(A)- 4. , / CIT 5. / , / , / DR, ITAT, MUMBAI 6. . 01 / GUARD FILE. / BY ORDER, % % //TRUE COPY// / /(DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI