DCIT, New Delhi V. M/s. Oracle (OFSS) BPO Services Ltd., Gurgaon

ITA 6974/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3778 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 24-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K YADAV SENIOR
• Assessee Lawyers: SHUBHAM GUPTA
• Keywords: Bad and doubtful debts; Revised return
• Section: 43B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE HONBLE PRESIDENT, SHRI G.D. AGRAWAL AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6974/DEL./2014 (ASSESSMENT YEAR : 2009-10) DCIT, CIRCLE 19 (1), VS. M/S. ORACLE (OFSS) BPO SER VICES LTD, NEW DELHI. DLF INFINITY TOWER A, 3 RD FLOOR, DLF CYBER CITY, PHASE II, GURGAON 122 002. (PAN : AABCE1201F) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI TARANDEEP SINGH, CA AND SHRI SHUBHAM GUPTA, ADVOCATE REVENUE BY : SHRI A.K. YADAV, SENIOR DR DATE OF HEARING : 30.10.2017 DATE OF ORDER : 31.10.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 19 (1), NEW DELHI (HEREINAFTER REFERRED TO AS THE REVENUE) IN BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE I MPUGNED ORDER DATED 30.09.2014 PASSED BY THE COMMISSIONER OF INCO ME-TAX (APPEALS)-XVI, NEW DELHI QUA THE ASSESSMENT YEAR 20 09-10 ON THE GROUNDS INTER ALIA THAT :- ITA NO.6974/DEL./2014 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE ASSE SSING OFFICER TO GRANT DEDUCTION IN RESPECT OF (1) PROVIS ION FOR BONUS OF RS.1,01,701/-, (2) SALE OF FIXED ASSETS OF RS.21,607/- AND (3) FOREIGN EXCHANGE GAIN ON CAPITA L EXPENDITURE OF RS.5358/- WHICH WERE CLAIMED BY THE ASSESSEE BY FILING REVISED COMPUTATION OF INCOME DU RING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH IS NOT PERMISSIBLE UNDER THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO T O GRANT DEDUCTION U/S 10A IN RESPECT OF (1) UNPAID BO NUS INADMISSIBLE U/S 43B OF RS. 87,98,002/-, (2) PROVIS ION FOR DOUBTFUL DEBTS OF RS. 1,24,67,570/- AND PAYMENT OF EMPLOYEES CONTRIBUTION OF PF OF RS.1,85,038/- WHICH WAS NOT CLAIMED BY THE ASSESSEE IN THE RETURN INCOM E OR BY FILI9NG REVISED RETURN BUT WAS CLAIMED BY WAY FI LING A REVISED COMPUTATION OF INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHICH IS NOT PERMISSIBLE UND ER THE ACT. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICATION OF THE CONTROVERSY AT HAND ARE : ASSESSEE COMPANY IS INTO THE BUSINESS OF PROVIDING BUSINESS PROCESSING OUTSOURCING SERVICES (BPO) TO THE MORTGAGE INDUSTRY. ASSESSEE COMPANY DEBITED FOREIG N EXCHANGE LOSS OF RS.8,54,87,777/- IN PROFIT & LOSS ACCOUNT W HICH HAS BEEN DISALLOWED BY THE AO BY FOLLOWING THE ORDER PASSED BY HIS PREDECESSORS QUA AY 2008-09 AND CBDT INSTRUCTION NO .3 OF 2010 DATED 23.03.2010. ASSESSEE COMPANY MADE DISALLOWAN CE OF RS.87,98,002/- AS UNPAID BONUS INADMISSIBLE U/S 43B OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) BUT VIDE REVISED COMPUTATION, ASSESSEE ADDED AN AMOUNT OF RS.2,14,50 ,610/- AND ITA NO.6974/DEL./2014 3 REDUCED AN AMOUNT OF RS.6,13,047/- FROM THE INCOME DECLARED IN THE RETURN. HOWEVER, AO DISALLOWED THE SAME ON THE GROUND THAT THESE DISALLOWANCE RESULT IN THE INCREASE OF ASSESS EES CLAIM OF DEDUCTION U/S 10A OF THE ACT. BY FILING REVISED CO MPUTATION, THE ASSESSEE COMPANY ALSO CLAIMED PROVISION FOR DOUBTFU L DEBTS TO THE TUNE OF RS.1,24,67,570/- AND PAYMENT OF EMPLOYEES C ONTRIBUTION TO PF AFTER DUE DATE TO THE TUNE OF RS.1,85,038/- WHIC H HAVE ALSO BEEN DISALLOWED BY THE AO ON THE SAME GROUND THAT IT WIL L INCREASE ASSESSEES CLAIM OF DEDUCTION U/S 10A OF THE ACT. 3. ASSESSEE CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS PARTLY ALLOWED THE APPEAL. FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE THE TRIBU NAL BY WAY OF CHALLENGING THE IMPUGNED ORDER PASSED BY LD. CIT (A ) . 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LD. DR FOR THE REVENUE CHALLENGING THE IMPUG NED ORDER PASSED BY THE LD. CIT (A) RELIED ON THE ORDER OF TH E AO. 6. PERUSAL OF PARA 4 OF THE ASSESSMENT ORDER APPARE NTLY GOES TO PROVE THAT THE AO HAS PARTLY ACCEPTED THE REVISED C OMPUTATION OF INCOME FILED BY THE ASSESSEE COMPANY. UNDISPUTEDLY , THE ASSESSEE ITA NO.6974/DEL./2014 4 HAS EARNED NET PROFIT EXCHANGE FLUCTUATION GAIN OF RS.8,54,87,777/- AND CREDITED THE SAME TO PROFIT & LOSS ACCOUNT WHIC H HAS BEEN CONSIDERED AS PART OF INCOME WHILE COMPUTING THE TA XABLE INCOME. HOWEVER, THE ASSESSEE COMPANY HAS FAILED TO CLAIM T HE DEDUCTION OF RS.5,358/- AS FOREIGN EXCHANGE EARNED ON CAPITAL AMOUNT AND CLAIMED THE SAME VIDE REVISED RETURN. WHEN THE ASS ESSEE COMPANY IS UNDISPUTEDLY ELIGIBLE FOR DEDUCTION U/S 10A OF T HE ACT, IT IS ENTITLED FOR CONSEQUENTIAL DEDUCTION U/S 10A ALSO. SO, THE FOREIGN EXCHANGE GAIN TO THE TAXABLE INCOME OF THE ASSESSEE COMPANY CANNOT BE ADDED WHICH AMOUNTS TO DOUBLE TAXATION AN D AS SUCH, THE LD. CIT (A0 HAS RIGHTLY DELETED THE SAME. 7. ASSESSEE MADE SUO MOTU DISALLOWANCE ON ACCOUNT O F UNPAID INADMISSIBLE BONUS U/S 43B OF THE ACT TO THE TUNE O F RS.87,98,002/- AND MADE CLAIM OF RS.1,01,701/- ON ACCOUNT OF BONUS IN THE REVISED COMPUTATION OF INCOME. WHEN THE AO HAS ACCEPTED TH E SUO MOTU DISALLOWANCE MADE BY THE ASSESSEE COMPANY IN THE RE VISED COMPUTATION OF INCOME, THE SUO MOTU CLAIM MADE BY T HE ASSESSEE COMPANY ON ACCOUNT OF BONUS CANNOT BE DISALLOWED. AO HAS SELECTIVELY ACCEPTED THE REVISED COMPUTATION OF INC OME TO THE EXTENT OF THE BENEFIT TO THE REVENUE WHILE COMPLETI NG THE ASSESSMENT. ITA NO.6974/DEL./2014 5 8. SO, ALL THESE FACTS HAVE BEEN THRASHED BY LD. CI T (A) IN GRANTING DEDUCTION U/S 10A TO THE TUNE OF RS.87,98, 002/-, RS.1,24,67,570/- AND RS.1,85,038/- ON ACCOUNT OF UN PAID BONUS INADMISSIBLE U/S 43B, PROVISION FOR DOUBTFUL DEBTS AND PAYMENT OF EMPLOYEES CONTRIBUTION TO PF RESPECTIVELY CLAIMED BY THE ASSESSEE COMPANY BY FILING REVISED COMPUTATION OF INCOME DUR ING THE ASSESSMENT PROCEEDINGS. WHEN ASSESSMENT PROCEEDING S WERE GOING ON, FILING OF RETURN WAS NOT NECESSARY RATHER RETURN FILED BY THE ASSESSEE COMPANY HAS BEEN DULY EXPLAINED BY REV ISED COMPUTATION OF INCOME WHOSE GENUINENESS HAS OTHERWI SE BEEN NOT DISPUTED BY THE AO. AO HAS RATHER SELECTIVELY USED THE REVISED COMPUTATION OF INCOME TO THE EXTENT OF BENEFIT IN F AVOUR OF THE REVENUE WHICH IS NOT SUSTAINABLE IN THE EYES OF LAW . 9. HONBLE BOMBAY HIGH COURT IN JUDGMENT CITED AS CIT VS. GEM PLUS JEWELLERY INDIA LTD. 330 ITR 175 (BOM.) HAS CATEGORICALLY HELD THAT EXEMPTION U/S 10A HAS TO BE GRANTED ON ENHANCED INCOME ON ACCOUNT OF EMPLOYEES CONTRIBUTI ON TOWARDS PROVIDENT FUND/ESIC. 10. FURTHERMORE HONBLE MADRAS HIGH COURT IN JUDGME NT CITED AS CIT VS. ABHINITHA FOUNDATION (P.) LTD. 396 ITR 25 1 (MADRAS) HELD THAT, EVEN IF A CLAIM MADE BY ASSESSEE-COMPANY DOES NOT FORM PART OF ORIGINAL RETURN OR EVEN REVIS ED RETURN, IT CAN ITA NO.6974/DEL./2014 6 STILL BE CONSIDERED BY ASSESSING OFFICER AS WELL AS APPELLATE AUTHORITIES IF, RELEVANT MATERIAL IS AVAILABLE ON R ECORD HELD, YES. 11. SO, WHEN THE ELIGIBILITY OF THE ASSESSEE COMPAN Y TO GET DEDUCTION U/S 10A OF THE ACT IS NOT IN DISPUTE, THE AO WAS NOT JUSTIFIED IN DISALLOWING THE DEDUCTION U/S 10A OF T HE ACT. 12. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE A RE OF THE CONSIDERED VIEW THAT THERE IS NO ILLEGALITY OR INFI RMITY IN THE IMPUGNED ORDER PASSED BY THE LD. CIT (A), HENCE PRE SENT APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 31 ST DAY OF OCTOBER, 2017. SD/- SD/- (G.D. AGRAWAL) (KULDIP SINGH) PRESIDENT JUDICIAL MEMBER DATED THE 31 ST DAY OF OCTOBER, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A)-XVI, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.