DCIT 9(1), MUMBAI V. DIVYA DRISHTI MEDICAL P.LTD, MUMBAI

ITA 6657/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2346 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 14-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVRAM
• Keywords: Revised return
• Section: 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO 6657/MUM/2013 ASSESSMENT YEAR: 2010-11 THE DCIT - 9(1), ROOM NO. 223, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI- 400 020. VS. M/ S. DIVYA DRISHTI MEDICAL PVT. LTD., 1 ST FLOOR, ANGELO HOUSE, S.V.ROAD, KHAR (W), MUMBAI- 400 052. PAN:- AACCD7016L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. NITIN WAGHMODE. RESPONDENT BY : SHRI. DR.K.SHIVRAM. DATE OF HEARING: 18/07/ 2016 DATE OF PRONOUNCEMENT: 29/07/20 16 O R D E R PER RAM LAL NEGI, JM THE PRESENT APPEAL HAS BEEN PREFERRED BY THE R EVENUE AGAINST ORDER DATED 19/09/2013 PASSED BY THE LD. CIT(APPEALS)-19 MUMBAI FOR THE ASST. YEAR 2010-11. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE CO MPANY ENGAGED IN PROVIDING MEDICAL CONSULTANCY SUCH AS TO INTERPRET X-RAYS, CT -SCANS, MRIS AND ULTRASOUNDS FOR US AND EUROPE BASED HOSPITALS, FILE D ITS RETURN OF INCOME FOR THE ASST. YEAR 2010-11 ON 05/07/2010 DECLARING TOTA L INCOME AT NIL UNDER NORMAL PROVISIONS OF THE ACT, AFTER CLAIMING EXEMPT ION U/S 10A OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) AMOUNTING TO RS . 40,12,267/-. THE ASSESSEE ALSO MENTIONED THE BOOK PROFIT U/S 115JB AT RS. 38, 63,521/-. THE ASSESSEE 2 ITA NO 6657/MUM/2013 ASSESSMENT YEAR: 2010-11 ALSO FILED REVISED RETURN ON 06/08/2010. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT AND THE A.O ASSESSED THE TOTA L INCOME OF THE ASSESSEE AT RS. 40,12,267/- AFTER DISALLOWING THE DEDUCTION CLA IMED BY THE ASSESSEE UNDER THE NORMAL PROVISIONS OF THE ACT. IN APPEAL THE LD . CIT(A) ALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE U/S 10A OF THE AC T. THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE IMPUGNED ORDER ON T HE FOLLOWING EFFECTIVE GROUND:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CA SE IN LAW, THE LD. CIT(A) WAS RIGHT IN ALLOWING THE DEDUCTION CLAI MED U/S 10A AMOUNTING TO RS. 40,12,267/- WITHOUT APPRECIATING T HE FACT THAT WITH AID OF SPECIALLY DESIGNED SOFTWARE, THE WORK OF MED ICAL CONSULTATION CAN BE MADE WITHOUT INVOLVEMENT OF A MEDICAL PRACTI TIONER AND STPI CERTIFICATION IS NOT A QUALIFICATION FOR CLAIMING D EDUCTION U/S 10A OF THE IT ACT, 1961? 3. BEFORE US THE LD. DEPARTMENTAL REPRESENTATIVE (D R) SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY ALLOWED THE CLAIM U/S 10A WITHOU T APPRECIATE THE FACTS THAT WITH THE AID OF SPECIALLY DESIGNED SOFTWARE, THE WO RK OF MEDICAL CONSULTATION CAN BE MADE WITHOUT INVOLVEMENT OF A MEDICAL PRACTI TIONER AND STPI CERTIFICATION IS NOT A QUALIFICATION FOR CLAIMING D EDUCTION U/S 10A OF THE IT ACT, 1961. 4. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT THE SIMILAR CLAIM FOR THE A.Y. 2009-10, HAS BEEN ACCEPT ED BY THE REVENUE. THE CBDT ITSELF HAS INTERPRETED THE TERM COMPUTER SOFTW ARE APPEARING IN EXPLANATION 2 TO SECTION 10A OF THE ACT IN AN EXTEN SIVE RATHER THAN NARROW MANNER. ONCE DATA IS STORED IN AN ELECTRONIC FORM, IT BECOMES A CUSTOMIZED ELECTRONIC DATA FALLING UNDER THE AMBIT OF EXPLANAT ION 2(I)(B) TO SEC. 10A WHICH CAN BE EXPORTED TO QUALIFY FOR DEDUCTION UNDER SECT ION 10A. 3 ITA NO 6657/MUM/2013 ASSESSMENT YEAR: 2010-11 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE DOCUMENTS IN THE LIGHT OF RESPECTIVE SUBMISSIONS OF THE PARTIES. THE ASSESSEE IS ENGAGED IN COMPUTER SOFTWARE/ IT ENABLED SERVICES OF ACTING AS A DATA PROCESSING CENTRE TO INTERNATIONAL COMPANIES. THE ASSESSEE USED TO RE CEIVE DICOM IMAGES AND THROUGH SOFTWARE, PROCESSES THE SAME INTO 3D & MIO IMAGES WHICH ARE USED BY DOCTORS IN HOSPITALS. AS PER THE DIRECTIONS OF LD. CIT(A) THE A.O PHYSICALLY VISITED THE BUSINESS PREMISES OF THE COMPANY AND VE RIFIED BOTH THE BUSINESS AS WELL AS STP REGISTRATION OF THE ASSESSEE AND INC ORPORATED THE FOLLOWING WORDS:- ON VERIFICATION, IT WAS FOUND THAT ASSESSEE RECEIV ES MEDICAL IMAGES FROM US AND IT CONVERTS THEM INTO READABLE FORM AND THEN TRANSMITS THE SAME BACK TO US. FURTHER, THE UNDERSIGNED STILL FEELS THAT THE NATURE OF THE BUSINESS OF THE ASSESSEE FALLS WITHIN THE AMBIT OF CONSULTATION.. 6. THE REMAND REPORT SUBMITTED BY THE ASSESSEE FURT HER CORROBORATES THE CONTENTION OF THE APPELLANT THAT DURING THE RELEVAN T PERIOD APPELLANT WAS USING CERTAIN SOFTWARE TO PROCESS CERTAIN DATA IN THE FOR M OF IMAGES WHICH WERE BEING RECEIVED FROM FOREIGN HOSPITALS. THE LD CIT(A) HAS FURTHER POINTED OUT THAT SOME OF THE RAW IMAGES SENT BY THE FOREIGN HOSPITAL S AND THE PROCESSED IMAGES FINALLY CREATED AFTER USING SOFTWARE WERE ALSO PROD UCED BY THE ASSESSEE DURING APPELLATE PROCEEDINGS. AFTER TAKING INTO CONSIDERAT ION, THE LD. CIT(A) HAS COME TO THE CONCLUSION THAT NO ELEMENT OF HUMAN INTERVEN TION IS INVOLVED IN THE SAID WORK. THE CIT(A) FURTHER MENTIONED THAT THIS IS THE THIRD YEAR OF APPELLANTS BUSINESS AND BENEFIT UNDER SECTION 10A OF THE ACT H AS BEEN GRANTED TO THE APPELLANT IN THE EARLIER TWO YEARS. THE CLAIM COULD STILL BE DENIED EVEN IN THE THIRD YEAR, IF THE MATERIAL FACTS ARE AVAILABLE WHI CH POINT TOWARDS THE APPELLANTS DISENTITLEMENT. HOWEVER, IT CAN BE SEEN THAT THE APPELLANT IS 4 ITA NO 6657/MUM/2013 ASSESSMENT YEAR: 2010-11 REGISTERED WITH THE STPI AT MUMBAI WHICH HAS ALSO G RANTED THE PERMISSION TO OPERATE OUT OF ITS PREMISES. AS SUCH REGISTRATION C ANNOT BE GRANTED BY STPI IN CASE OF ACTUAL MEDICAL CONSULTATION. HENCE IN OUR C ONSIDERED VIEW THE LD. CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE AFTER PROPERLY APPRECIATING EVIDENCE ON RECORD IN THE LIGHT OF THE PROVISIONS O F THE LAW. 7. IN VIEW OF THE ABOVE DISCUSSION, THE ORDER PAS SED BY THE LD. CIT(A) IS FOUNDED ON SOUND REASONING AND EVIDENCE ON RECORD. HENCE, THE IMPUGNED ORDER DOES NOT SUFFER FROM ANY LEGAL OR FACTUAL INF IRMITY TO INTERFERE WITH. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER AND DISMISSED THE GROUND OF APPEAL OF THE REVENUE. 8. IN THE RESULT APPEAL FILED BY THE REVENUE FOR A. Y. 2010-11 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH JULY, 2016 SD/- SD/- ( B.R.BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:29/07/2016 5 ITA NO 6657/MUM/2013 ASSESSMENT YEAR: 2010-11 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA