Somnath Kundu, Kolkata V. D.C.I.T Cir - 7,kolkata., Kolkata

ITA 680/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100247 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN KANTI SINHA JCITSRDR
• Keywords: Corroborative evidences
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 680 / KOL / 2013 ASSESSMENT YEAR :2008-09 SOMNATH KUNDU 44/A MADHU ROY LANE, KOLKATA 700 006 [ PAN NO.AFRPK 4718 F ] V/S . DCIT, CIRCLE-7, AAYAKAR BHAWAN, 5 TH FLOOR, KOLKATA /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SUBASH AGARWAL, ADVOCATE /BY RESPONDENT SHRI ARUN KANTI SINHA, JCIT-SR-DR /DATE OF HEARING 23-11-2015 /DATE OF PRONOUNCEMENT 11-12-2015 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-VIII, KOLKATA IN APPEAL NO.222 /CIT(A)-VIII/KOL/10-11 DATED 07.01.2013. ASSESSMENT WAS FRAMED BY DCIT, CI RCLE-7, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REF ERRED TO AS THE ACT) VIDE HIS ORDER DATED 28.12.2010 FOR ASSESSMENT YEAR 2008 -09. 2. SOLE ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN NOT ALLOWING THE DEDUCTION OF 46,11,220/- U/S. 10A OF THE ACT ON ACCOUNT OF PROFIT IN BUSINESS OF EXPORT, SOFTWARE, MANUFACTURE D / PRODUCED BY ASSESSEE. ITA NO.680/KOL/2013 A.Y. 2008-09 SOMNATH KUNDU V. DCIT CIR-7, KOL. PAGE 2 THE FACTS OF CASE ARE THAT ASSESSEE IS AN INDIVIDUA L RUNNING HIS PROPRIETARY CONCERN UNDER NAME AND STYLE OF M/S TECHSOFT. DURIN G THE YEAR UNDER CONSIDERATION, ASSESSEE HAS EARNED INCOME FROM HIS BUSINESS AND INTEREST ON FIXED DEPOSIT/NSC BOND AND SAVINGS BANK ACCOUNT. TH E ASSESSEE ENGAGED IN THIS BUSINESS OF EXPORT OF SOFTWARE AND HAVING REGI STRATION WITH SOFTWARE EXPORT TECHNOLOGY PARK (STP FOR SHORT). THE AGREEME NT WITH STP WAS REGISTERED ON 14.10.2006 WHICH GRANTED THE STATUS O F 100% EXPORT ORIENTED UNIT UNDER STP. DURING THE YEAR, ASSESSEE CLAIMED E XEMPTION U/S. 10A OF THE ACT FOR THE PROFIT ARISING OUT OF SOFTWARE EXPORT B USINESS, HOWEVER, AO HAS DISREGARDED THE CLAIM OF ASSESSEE ON THE GROUNDS TH AT THE CLAIM MADE BY ASSESSEE U/S. 10A WAS DENIED IN THE AY 2007-08 WHIC H IS IMMEDIATELY PRECEDING YEAR TO THE RELEVANT ASSESSMENT YEAR. 3. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO UPHELD THE ACTION OF ASSESSING OFFICER BY OBSERVING AS UND ER:- I HAVE CAREFULLY CONSIDERED THE SUBMISSION PUT FOR TH ON BEHALF OF THE APPELLANT ALONG WITH THE SUPPORTING EVIDENCES FURNI SHED PERUSED THE FACTS OF THE CASE INCLUDING THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER AND OTHER MATERIALS BROUGHT ON RECORD. THIS I SSUE OF APPEAL HAS ALSO COME UP BEFORE ME FOR ADJUDICATION IN THE APPE LLANTS OWN CASE WHILE DECIDING THE APPEAL FOR AY 2007-08. THERE IS ABSOLUTELY NO CHANGE IN THE FACTS OF THE CASE THIS YEAR FROM THE FACTS OF THE PREVIOUS AY 2007-08. THE APPELLANT HAS ALSO MOSTLY RELIED UP ON THE SUBMISSION MADE FOR THE APPEAL OF THE AY 2007-08 IN THE PRESEN T APPEAL ALSO. AFTER CONSIDERING THE FACTS OF THE CASE AND RELYING ON TH E DECISION OF THE HON'BLE ITAT, MUMBAI IN THE CASE OF CHENAB INFORMAT ION TECHNOLOGIES (P) LTD., V. INCOME TAX OFFICER, (2008) 25 SOT 432, I HAVE DECIDED THIS ISSUE OF APPEAL IN APPELLATE ORDER NO. 315/CIT(A)-VIII/KOL DATED 22.07.2011 FOR THE AY 2007-08 AGAINST THE APPELLANT. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASSESSE E PREFERRED SECOND APPEAL BEFORE US ON THE FOLLOWING GROUND:- 1) THAT THE LD. ASSESSING OFFICER AS WELL AS LD. C IT(APPEALS) GROSSLY ERRED IN NOT ALLOWING DEDUCTION U/S 10A OF RS.46,11 ,220/- ON ACCOUNT OF PROFIT IN BUSINESS OF EXPORT OF SOFTWARE MANUFACTUR ED/PRODUCED BY THE APPELLANT. ITA NO.680/KOL/2013 A.Y. 2008-09 SOMNATH KUNDU V. DCIT CIR-7, KOL. PAGE 3 2) THAT THE LD. ASSESSING OFFICER AS WELL AS LD. CI T(APPEALS) GROSSLY ERRED IN HOLDING THAT BUSINESS OF M/S TECHSOFT WAS FORMED BY SPLITTING UP OR RECONSTRUCTION OF BUSINESS OF M/S TECHSOFT PV T. LTD. 3) THAT THE CONCLUSION ARRIVED AT BY LD. A.O AS WEL L AS LD CIT(APPEALS)IS ARBITRARY, UNJUSTIFIED AND/OR MISAPP LICATION OF THE FACTS, AND THUS LIABLE TO BE REVERSED. SHRI SUBASH AGARWAL, LD. AUTHORIZED REPRESENTATIVE APPEARING ON BEHALF OF ASSESSEE AND SHRI ARUN KANTI SINHA, LD. DEPARTMENTA L REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 4. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. AR SUBMITTED THAT AO DISALLOWED THE CLA IM OF ASSESSEE U/S. 10A OF THE ACT ON THE GROUND THAT HIS PREDECESSOR HAS DISA LLOWED THE CLAIM IN THE PRECEDING YEAR OF THE SAME ASSESSEE AND THE SAME WA S CONFIRMED BY THE LD. CIT(A) AS WELL BUT THE SAME ISSUE HAS BEEN DECIDED BY THIS HONBLE TRIBUNAL IN ITA NO.1209/KOL/2011 DATED 15.09.2015 FOR A.Y 2007-08 IN ASSESSEES OWN CASE IN HIS FAVOUR. LD. DR ON THE OTHER HAND, V EHEMENTLY RELIED ON THE ORDERS OF AUTHORITIES BELOW. FROM THE AFORESAID DIS CUSSION AND WE FIND THAT IN ASSESSEES OWN CASE IN ITA NO. 1209/KOL/2011 (SUPRA ), WHEREIN THIS TRIBUNAL ALLOWED THE APPEAL OF ASSESSEE AND THE RELEVANT EXT RACT OF THIS ORDER IS REPRODUCED BELOW:- 5.8 WE FIND THAT SECTION 10A OF THE ACT IS A SPECI AL INCENTIVE INTRODUCED BY LEGISLATURE IN ORDER TO PROMOTE EXPORTS OF COMPU TER SOFTWARE, IT ENABLED SERVICES AND THEREFORE, THE SAME HAS TO BE CONSTRUED LIBERALLY. IT HAS BEEN HELD BY HON'BLE SUPREME COURT IN THE CA SE OF BAJAJ TEMPO TEMPO LTD. VS. CIT REPORTED IN (1992) 196 ITR 188 (SC) A PROVISIONS IN A TAXIING STATUE GRANTING INCENTIVES FOR PROMOTI NG GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY; AND SINC E A PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIB ERALLY, THE RESTRICTION ON IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PROVISION AND NOT TO FRUSTRATE IT. 5.9 IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCE S OF THE CASE WE HOLD THAT ALL THE CONDITIONS STIPULATION SECTION 10A OF THE ACT HAS BEEN SATISFIED BY THE ASSESSEE AND ACCORDINGLY, HE IS EN TITLED FOR CLAIMING ITA NO.680/KOL/2013 A.Y. 2008-09 SOMNATH KUNDU V. DCIT CIR-7, KOL. PAGE 4 DEDUCTION U/S. 10A OF THE ACT. ACCORDINGLY, THE GRO UNDS RAISED BY THE ASSESSEE ARE ALLOWED. FROM THE ABOVE DISCUSSION WE FIND THAT THE ASSESSEE IS ENTITLED FOR THE DEDUCTION UNDER SECTION 10A OF THE ACT. TAKING A CO NSISTENT VIEW IN ASSESSEES OWN CASE (SUPRA) WE ALLOW THE GROUND RAI SED BY ASSESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 11/ 12/2015 SD/- SD/- (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 11 /1 2 /2015 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-SOMNATH KUNDU, 44/A, MADHU ROY LANE, KOL KATA-700 006 2. /RESPONDENT-DCIT, CIR-7, AAYAKAR BHAWAN, 5 TH FLOOR, KOLKATA700 006 3. * +, - - . / CONCERNED CIT KOLKATA 4. - - .- / CIT (A) KOLKATA 5. 012 33+,, - +, , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ - , /TRUE COPY/ / - +, ,