DCIT 8(3), MUMBAI V. SYNTEL LTD, MUMBAI

ITA 6626/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8730 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTANU K SAIKIA
• Assessee Lawyers: DINESH VYAS
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUM BAI , BEFORE SHRI RAJENDRA, A.M. AND SHRI PAWAN SINGH,J.M . ./ITA NO.6626/MUM/2014, / ASSESSMENT YEAR: 2010-11 DCIT-8(3) ROOM NO.217, AAYAKAR BHAVAN, M.K. MARG,MUMBAI-400 020.. VS. M/S. SYNTEL LTD. UNIT 112, SDF IV, SEEPZ ANDHERI (E), MUMBAI-400 096. PAN: AAACS 8305 D ( /APPELLANT ) ( / RESPONDENT ) REVENUE BY: SHRI SANTANU K. SAIKIA-CIT-DR ASSESSEE BY: SHRI DINESH VYAS / DATE OF HEARING: 09.01.2017 !'#$ / DATE OF PRONOUNCEMENT: 18.01.2017 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) , / PER RAJENDRA A.M. - CHALLENGING THE ORDER DATED 22/08/2014 OF THE CIT ( A)-18, MUMBAI, THE ASSESSING OFFICER(AO) HAS FILED THE PRESENT APPEAL.ASSESSEE-C OMPNAY,ENGAGED IN THE BUSINESS OF DEVELOPMENT AND EXPORT OF COMPUTER SOFTWARE SERVICE S,WAS FORMED IN MAY 1992.IT FILED ITS RETURN OF INCOME ON 06.10.2011 DECLARING INCOME O F RS.80,29,87,670/- .THE AO COMPLETED THE ASSESSMENT U/S.143(3) OF THE ACT ON 21.02.2014, DETERMINING ITS INCOME AT RS.81,13,10,766/- 2.EFFECTIVE GROUND IS ABOUT ALLOWABILITY OF DEDUCTI ON U/S.10A/10AA OF THE ACT.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSES SEE HAD CLAIMED DEDUCTION U/S. 10A/10AA AMOUNTING TO RS.2,60.01,65,610/-,THAT IT I NCLUDED INTEREST INCOME OF RS. 26.22 CRORES.HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY T HE INTEREST INCOME SHOULD NOT BE EXCLUDED WHILE COMPUTING THE INCOME U/S.10 A/10AA OF THE ACT .AFTER CONSIDERING THE REPLY OF THE ASSESSEE, HE HELD THAT IT WAS NOT ENTITLED TO SAID DEDUCTION. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA),WHO FOLLOWING THE ORDER F OR THE EARLIER AY.,REVERSED THE ORDER OF THE AO AND ALLOWED THE APPEAL. 4. BEFORE US,REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE IDENTICAL ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDERS OF THE TRIBUNA L FOR EARLIER YEARS.WE FIND THAT THE 6626/M/14-SYNTEL 2 TRIBUNAL,WHILE DECIDING THE APPEALS FOR THE AY.S.20 03-04 TO 2007-08,HAS DELIBERATED UPON THE IDENTICAL ISSUE(ITA.S/3413 & OTHERS/MUM/2007,20 08 & 2010,DTD.31.08. 2015).WHILE DECIDING THE APPEAL NO.ITA/3413/MUM/2003-04,THE TRI BUNAL HAS HELD AS UNDER: 5. NEXT GROUND IS ABOUT NOT CONSIDERING THE CLAIM THAT THE INTEREST INCOME AGGREGATING TO RS.5, 40,69,769/-DERIVED BY THE ASSESSEEWAS DERIVED FROM THE INDUSTRIAL UNDERTAKING AND NOT ALLOWING DEDUCTION U/S 10A/10B OF THE ACT IN RESPEC T OF THE SAID INTEREST INCOME.BEFORE US,IT WAS AGREED BY THE DR AND AR THAT THE ISSUE IS DECID ED IN FAVOUR OF THE ASSESSEE BY TRIBUNALS ORDERS FOR OTHER AY.S. INCLUDING AY.02-0 3(SUPRA),THAT DEPARTMENTS APPEAL BEFORE THE HONBLE HIGH COURT PERTAINING TO ELIGIBILITY FO R DEDUCTION U/S. 10A OF THE ACT WAS DISMISSED. 5.1. WE FIND THAT WHILE DECIDING THE APPEALS NO.7544/754 6/MUM/04 AND ITA/8122-24/MUM/04 DT.11.02.2008,THE TRIBUNAL HAD DECIDED THE ISSUE AS UNDER: 19.AS REGARDS GROUNDS NOS. 4 & 6 RELATING TO INTEREST AN D OTHER INCOME CLAIMED AS EXEMPTION U/S. 10A AND 10B OF THE ACT, W E FIND THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECIS ION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AYRS. 99-2000 AND 2000- 01 WHEREIN IT HAS BEEN HELD TO HAVE A DIRECT NEXUS WITH THE BUSINESS AND D EVELOPMENT OF EXPORT OF SOFTWARE. RESPECTFULLY FOLLOWING THE DECISIONS OF T HE COORDINATE BENCH, THESE GROUNDS OF THE ASSESSEE ARE ALLOWED. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBU NAL AND CONSIDERING THE FACT-THAT THE APPEAL FILED BY THE DEPARTMENT WITH REGARD TO ELIGI BILITY OF 10A/10B DEDUCTION,BEFORE THE HONBLE HIGH COURT,HAS BEEN DISMISSED-WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. WHILE DECIDING THE APPEAL FOR THE AY.2004-05(ITA /2 263/MUM/2008)THE TRIBUNAL HAD DECIDED THE ISSUE AS FOLLOW: 12. LAST GROUND RAISED BY THE AO IS ABOUT CALCULATION O F INTEREST INCOME FOR DEDUCTION U/S.10A/ 10B OF THE ACT.WE FIND THAT WHILE DECIDING THE ISSUE OF ELIGIBILITY OF INTEREST INCOME FOR THE EARLIER YEAR AND IN THE APPEAL FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION,WE HAVE DECIDED THE ISSUE AGAINST THE AO AND IN FAVOUR OF THE ASSESSEE. FOLLOWING THE SAME,GROUND NO.3 IS DECIDED AGAINST T HE AO. RESPECTFULLY FOLLOWING THE ABOVE,WE DECIDE THE EFFE CTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH JANUARY 2017. %& ' 18 , 2017 SD/- SD/- ( /PAWAN SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; ' DATED : 18.01.2017. JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 6626/M/14-SYNTEL 3 3. THE CONCERNED CIT(A)/ () *+, , 4. THE CONCERNED CIT / () *+, 5. DR E BENCH, ITAT, MUMBAI / $- , , . . . 6. GUARD FILE/ ./ $ $ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.