D.C.I.T.RG.8(3), MUMBAI V. XORIANT SOLUTIONS PVT. LTD., MUMBAI

ITA 6774/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3529 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 20-03-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 07-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M R
• Section: 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH, MUMBAI , BEFORE SHRI R.K.GUPTA, JM & SHRI N.K.BILLAIYA , AM ITA NO . 6774 / MUM/ 20 1 1 ( ASSESSMENT YEAR : 200 7 - 0 8 ) DCIT, RG.8(3), MUMBAI - 20 VS. XORIANT SOLUTIONS PRIVATE LIMITED, HI - TECH PLAZA, 3 RD FLOOR, MAHAKALI CAVES ROAD, ANDHERI (EAST), MUMBAI - 400 093 PAN/GIR NO. : A AACX 01 46 P ( APPELLANT ) .. ( RESPONDENT ) /REVENUE BY : MR. PAVAN VED /ASSESSEE BY : MR. PANKAJ TOPRANI DATE OF HEARING : 1 2 TH JUNE, 201 3 DATE OF PRONOU NCEMENT : 19 TH JUNE, 2013 O R D E R PER SHRI R.K.GUPTA, JM : TH IS APPEAL HA S BEEN PREFERRED BY THE DEPARTMENT AGAINST THE ORDER DATED 18 - 7 - 2011 PASSED BY THE LEANED CIT(A) - 18 , MUMBAI RELATING TO THE ASSESSMENT YEAR 200 7 - 0 8 . 2 . THE DEPARTMENT IS OBJECTING IN D ELETING THE DISALLOWANCE OF DEDUCTION UNDER SECTION 10B OF THE ACT. 3 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTED THAT FOR ASSESSMENT YEAR 2006 - 07 , THE CLAIM OF DEDUCTION UNDER SECTION 10B WAS REJECTED BY HOLDING THAT FOR BEING ELIGIBLE FOR DEDUCTION UNDER ITA NO . 6774 /2011 2 SECTION 10B, ASSESSEE SHOULD BE ENGAGED IN THE BUSINESS OF COMPUTER SOFTWARE DEVELOPMENT, HOWEVER, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING BPO SERVICES AND THAT THE ASSESSEE HAD NOT FILED ANY DETAILS IN RESPECT OF THE ACTIVITY CARRIED OUT DURING THE YEAR. THE AO ALSO NOTED THAT FOR THE ASSESSMENT YEAR 2002 - 03 ALSO THE DEDUCTION UNDER SECTION 80IB WAS NOT ALLOWED . THEREAFTER RECORDING A FINDING IN PARA 4.3 THAT TAKING THE CONSISTENT STAND OF THE DEPARTMENT ON THE ISSUE, IT IS HEREBY HELD THAT THE ASSESSEE COMPANY IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 10B AS IT IS ENGAGED IN PROVIDING BPO SERVICES AND NOT IN SOFTWARE DEVELOPMENT BUSINESS AND ALSO THE FACT THAT IT COULD NOT EXACTLY ESTABLISH THE ACTIVITIES CARRIED ON BY THE ASSESSEE COMPANY DURING THE YEAR. ACCORDINGLY, THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 10B WAS DISALLOWED. 4 . LEARNED CIT(A) IN APPEAL BY OBSERVING THAT SIMILAR CLAIM DENIED FOR ASSESSMENT YEAR 2006 - 07 HAS BEEN ALLOWED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY HE ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 5 . NOW, THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6 . LEARNED DR STATED THAT EACH YEAR IS INDEPENDENT AND THE AO HAS RECORDED A FINDIN G THAT THE ASSESSEE COULD NOT ESTABLISH THE ACTIVITIES CARRIED ON BY THE ASSESSEE COMPANY DURING THE YEAR. THEREFORE, THE CASE OF THE ASSESSEE SHOULD HAVE BEEN DECIDED BY THE ITA NO . 6774 /2011 3 CIT(A) BY CONSIDERING THE FACTS OF THE CASE OF THE YEAR UNDER CONSIDERATION. 7 . ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE STATED THAT IDENTICAL FACTS WERE INVOLVED IN EARLIER YEARS, THEREFORE, THE LEARNED CIT(A) WAS JUSTIFIED IN ALLOWING THE DEDUCTION TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE DECISION OF THE CIT(A) F OR ASSESSMENT YEAR 2006 - 07 HAS BEEN CONFIRMED BY THE TRIBUNAL WHILE PASSING THE ORDER IN ITA NO. 3179/M/ 2010 , VIDE ORDER DATED 16 - 12 - 2011. COPY OF THE SAME IS PLACED ON RECORD. 8 . AFTER CONSIDERING THE ORDER OF THE AUTHORITIES BELOW AND THE SUBMISSION OF THE PARTIES, WE FOUND NO INFI RMITY IN THE FINDING OF LEARNED CIT(A) . WE NOTED THAT FOR ASSESSMENT YEAR 2006 - 07 ON SIMILAR BASIS THE DEDUCTION WAS DENIED. FOR ASSESSMENT YEAR 2006 - 07 , THE CIT(A) PASSED A DETAILED ORDER BY WHICH THE CLAIM OF THE ASSESSEE WAS ALLOWED. THE ORDER OF THE CIT(A) HAS BEEN CONFIRMED BY THE TRIBUNAL BY RECORDING THE FINDING IN PARA 4 OF ITS ORDER. THE TRIBUNAL HAS RECORDED A FINDING THAT THE CIT(A) HAS ALLOWED THE CLAIM OF THE ASSESSEE FOLLOWING THE ORDER OF HIS PREDECESSOR FOR EARLI ER YEARS, WHICH WERE NOT CHALLENGED BY THE DEPARTMENT. THE TRIBUNAL FURTHER NOTED THAT ON OTHER ISSUES, THE CLAIM OF THE ASSESSEE WAS ALSO ALLOWED BY THE TRIBUNAL AND THE DEPARTMENT COULD NOT BRING ANY NEW MATERIAL TO ESTABLISH OTHERWISE. AS STATED ABOVE, SIMILAR FACTS ARE INVOLVED FOR THE YEAR UNDER CONSIDERATION. THEREFORE, WE SEE NO REASON TO INTERFERE IN THE FINDING OF ITA NO . 6774 /2011 4 THE LEARNED CIT(A) . ACCORDINGLY, WE CONFIRM THE ORDER OF THE LEARNED CIT(A) FOR THE YEAR UNDER CONSIDERATION ALSO. 9 . IN THE RESULT, AP PEAL OF THE DEPARTMENT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF JUN . 2013 . SD/ - ( ) ( N.K.BILLAIYA ) SD/ - ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 19/06/ 2013 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI. 4. / CIT 5. / DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/ / / BY ORDER, ( ASSTT. REGISTRAR) / ITAT, MUMBAI