DCIT, Hyderabad V. M/s DQ Entertainment Ltd., Hyderabad

ITA 728/HYD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9856 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 01-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K KAMAKSHI
• Assessee Lawyers: C N PRASAD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1611/HYD/08 : ASSTT . YEAR 2004-05 ITA NO.728/HYD/09 : ASST. YEAR - 2006-07 DY. COMMISSIONER OF INCOME- TAX, CIRCLE-1(2), HYDERABAD V/S. M/S. D.Q. ENTERTAINMENT LIMITED, HYDERABAD ( PAN AABCD 1845 L ) (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. K.KAMAKSHI RESPONDENT BY : SHRI C.N.PRASAD O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THESE TWO APPEALS BY THE REVENUE FOR THE ASSESSMENT YEA RS 2004-05 AND 2006-07 ARE DIRECTED AGAINST SEPARATE ORD ERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II, HYDERABAD DATED 15.9.2008 FOR THE ASSESSMENT YEAR 2004-05 AND DATED 23.3.2009 FOR THE ASSESSMENT YEAR 2006-07. SINCE ONLY A COMMON ISSUE IS INVOLVED, BO TH THESE APPEALS ARE BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. EFFECTIVE GROUNDS OF THE REVENUE IN ITS APPEAL IT A NO.1611/HYD/2008 FOR ASSESSMENT YEAR 2004-05 READ AS FOLL OWS- ITANO.1611/HYD/08 & ANR M/S. D.Q. ENTERTAINMENT LIMITED, HYD 2 1. THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE DEDUCT ION U/S. 10A IS TO BE ALLOWED BEFORE SET OFF OF B/F BUSINES S LOSSES. 3. THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION U/S. 10A OF RS.1,74,36,998. GROUNDS OF THE REVENUE IN ITS APPEAL FOR ASSESSMENT YEAR 2006-07, VIZ. ITA NO.728/HYD/2009, ARE IDENTICAL, EXCEPT FOR THE AMO UNT SPECIFIED IN GROUND NO.3 ABOVE, WHICH FOR THAT YEAR IS RS.3,62,55,5 98. 3. THUS, THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IN THESE TWO APPEALS OF THE REVENUE IS WHETHER DEDUCTION UNDER S.1 0A OF THE ACT HAS TO BE ALLOWED TO AN ASSESSEE BEFORE ALLOWING SET OFF OF THE BROUGHT FORWARD BUSINESS LOSSES OR AFTER THE SET OFF OF THE BROUGH T FORWARD BUSINESS LOSSES. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTI NG THE ORDER OF THE ASSESSING OFFICER, HAS RELIED ON THE DECISION OF THE TRIBUNAL DATED 21.5.2010 ON THE CROSS-APPEALS IN THE CASE OF BODH TREE CONSULTING LTD., HYDERABAD, FOR THE ASSESSMENT YEAR 2004-05, DULY F ILING A COPY THEREOF BEFORE US. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS STRONGLY RELIED ON THE ORDER OF THE CIT(A) , AND HAS PLACED RELIANCE ON THE SPECIAL BENCH DECISION OF THE TRIBUNAL I N THE CASE OF SCIENTIFIC ATLANTA INDIA TECHNOLOGY (P)LTD V/S. ACIT (2 010) 129 TTJ 273, DULY FURNISHING A COPY OF THE SAID DECISION OF THE SPE CIAL BENCH BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE FIND THAT THE CI T(A), WHILE CONCLUDING THAT THE ASSESSEE IS ENTITLED TO EXEMPTION/DEDUCTION UNDE R S.10A BEFORE ITANO.1611/HYD/08 & ANR M/S. D.Q. ENTERTAINMENT LIMITED, HYD 3 THE SET OFF OF THE BROUGHT FORWARD BUSINESS LOSSES, FOLLOW ED HIS APPELLATE ORDER DATED 18.8.2008 FOR THE ASSESSMENT YEAR 2004-05 IN THE CASE OF BODHTREE CONSULTING LTD. (ITA NO.0416/CIT(A)-II/06-0 7). IT HAS BEEN BROUGHT TO OUR NOTICE THAT ON CROSS APPEALS AGAINST THE O RDER OF THE CIT(A) IN THAT CASE DATED 18.8.2008, THIS TRIBUNAL VID E ITS ORDER DATED 21.5.2000 IN ITA NO.1591/HYD/2008 OF THE REVENUE AND ITA NO.1554/HYD/2008 OF THE ASSESSEE, HAS SET ASIDE THE ORDER O F THE CIT(A) DATED 18.8.2008, APPROVING THE VIEW TAKEN BY THE ASSE SSING OFFICER OF ALLOWING DEDUCTION UNDER S.10B OF THE ACT ONLY AFTE R THE SET OFF OF THE BROUGHT FORWARD BUSINESS LOSSES. THE TRIBUNAL IN THAT CAS E HAS FOLLOWED ITS STILL EARLIER DECISION DATED 11.9.2009 IN THE CASE OF M/S. CCL PRODUCTS (I) LTD. IN ITA NOS.150/HYD/2009 AND 949/HYD/2009 FOR THE ASSESSMENT YEARS 2000-01 AND 2004-05, EXTENSIVELY QUOTING THE OP ERATIVE PORTION OF THAT DECISION ON PAGES 11 AND 12 OF ITS ORDER DATED 21 .5.2010. FOR THE REASONING GIVEN IN THAT ORDER DATED 21.5.2000 IN THE CASE OF BODHTREE CONSULTING LTD., CITED SUPRA, TO WHICH BOTH OF US ARE P ARTIES, WE HOLD THAT SET OFF OF BROUGHT FORWARD BUSINESS LOSSES HAVE TO BE ALLO WED FIRST AND IT IS ONLY IN RELATION TO THE BALANCE AMOUNT OF INCOME, THAT DEDUCTION UNDER S.10A HAS TO BE COMPUTED. WE ACCORDINGLY SET ASIDE THE IMPUGNED ORDERS OF THE CIT(A) ON THIS ISSUE AND RESTORE THE ORDER S OF THE ASSESSING OFFICER ON THE ASPECT, ALLOWING THE GROUNDS OF THE REV ENUE IN THIS APPEAL. 6. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE A RE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 31.1.2011 SD/- SD/- (G.C.GUPTA) (CHANDRA POOJARI) VICE PRESIDENT ACCOUNTANT MEMBER DT/- 31ST JANUARY, 2011 ITANO.1611/HYD/08 & ANR M/S. D.Q. ENTERTAINMENT LIMITED, HYD 4 COPY FORWARDED TO: 1. M/S. D.Q. ENTERTAINMENT LIMITED, 8-2-268/1/A, PL OT NO.644, ARORA COLONY, ROAD NO.3, BANJARA HILLS, HYDERABAD 500 034 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1(2), HYDE RABAD 3. COMMISSIONER OF INCOME-TAX(APPEALS)-III HYDERABAD. 4. COMMISSIONER OF INCOME-TAX II , HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S