DCIT, Hyderabad V. M/s Intelligroup Asia P.Ltd., Hyderabad

ITA 796/HYD/2007

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61927 (ITAT-HYDERABAD)
• Duration Of Justice: 4 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 04-07-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 29-06-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GNANAPRAKASH
• Assessee Lawyers: R VIJAY RAGHAVAN
• Keywords: Reopening of assessment; Business income; Depreciation; Business expenditure; Bad and doubtful debts; Assessment record; Revenue expenditure
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER. SL. NO. ITA NO. AY APPELLANT RESPONDENT 1. 796/HYD/07 2003 - 04 DY. COMMISSIONER OF INCOME-TAX, CIRCLE- 2(1), HYDERABAD M/S INTELLIGROUP ASIA PVT. LTD., HYDERABAD. (PAN/GIR NO. AAAC17064 D /1-127 2 808/HYD/07 2003-04 M/S INTELLIGROUP ASIA PVT. LTD., HYDERABAD (PAN/GIR NO. AAAC17064 D / 1-127) DY. COMMISSIONER OF INCOME-TAX, CIRCLE-2(1), HYDERABAD 3 46/HYD/09 2000-01 -DO- -DO- 4 863/HYD/10 2001 - 02 - DO - - DO - REVENUE BY : SHRI K. GNANA PRAKASH ASSESSEE BY : S HRI R. VIJAY RAGHAVAN DATE OF HEARING 19 /0 6 /2012 DATE OF PRONOUNCEMENT 22/06/2012 O R D E R PER VIJAY PAL RAO, J.M.: THESE THREE APPEALS BY THE ASSESSEE AND ONE BEING CROSS APPEAL BY THE REVENUE ARE DIRECTED AGAINST THE RESP ECTIVE ORDERS OF THE CIT(APPEALS) FOR THE ASSESSMENT YEAR 200001 , 2001-02 AND 200304 RESPECTIVELY. 2. FIRST WE TAKE UP THE ASSESSEE'S APPEALS FOR THE ASSESSMENT YEAR 2000-01 AND 2001-02. THE ASSESSEE HAS RAISED ADDITIONAL GROUNDS FOR THE ASSESSMENT YEAR 2000-01 REGARDING T HE VALIDITY OF REOPENING OF THE ASSESSMENT UNDER SECTION 147 OF INCOME-TAX ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 2 ACT AFTER EXPIRY OF FOUR YEARS. THE ADDITIONAL GROU NDS RAISED FOR THE ASSESSMENT YEAR 2000-01 ARE AS UNDER: 1. THE LEARNED ACIT ERRED BY REOPENING THE ASSESSME NT U/S 147 OF THE INCOME TAX ACT, 1961, AFTER FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, WHEN ALL THE M ATERIAL FACTS NECESSARY FOR ASSESSMENT WERE DISCLOSED AT TH E TIME OF ORIGINAL ASSESSMENT. 2. THE LEARNED ACIT ERRED IN REOPENING THE ASSESSME NT BASED ON THE REVIEW OF TDS CERTIFICATES, WHICH WERE FILED ALONG WITH THE RETURN OF INCOME AND NOT ON RECEIPT OF ANY FRESH EVIDENCE, SUBSEQUENT TO COMPLETION OF ASSESSM ENT U/S 143(3) OF THE ACT. IT IS ONLY A MERE CHANGE OF OPIN ION BY ACIT. 3. THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 14 7 OF THE ACT MAY BE SET ASIDE AS BEING WITHOUT JURISDICTION. 4. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR A MEND ANY OF THE AFOREMENTIONED GROUNDS OF APPEAL. IT IS ALSO REQUESTED THAT THE APPELLANT MAY BE GRANTED OPPORTU NITY FOR ORAL HEARING ALSO. 3. WE HAVE HEARD THE LEARNED AR OF THE ASSESSEE AS WELL AS THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD ON THE POINT OF ADMITTING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. THE LEARNED A.R. OF THE ASSESSEE HAS SUBM ITTED THAT INADVERTENTLY THE ASSESSEE OMITTED TO RAISE THIS GR OUND IN THE MEMO OF APPEALS. HE HAS FURTHER SUBMITTED THAT SINC E THIS IS PURELY A LEGAL ISSUE AND GOES TO THE ROOT OF THE MA TTER, THEREFORE, THIS ISSUE CAN BE DECIDED WITHOUT ANY INVESTIGATION OF FACTS. IN SUPPORT OF HIS CONTENTION, THE LEARNED A.R. HAS REL IED UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F NATIONAL THERMAL POWER CORPORATION LTD. VS. CIT ( 229 ITR 38 3) (SC). ON THE OTHER HAND THE LEARNED DR HAS VEHEMENTLY OBJECTED T O THE PRAYER OF THE ASSESSEE FOR ADMITTING THE ADDITIONAL GROUND AT THIS STAGE. ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 3 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAR EFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. THERE IS N O DISPUTE THAT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PUR ELY LEGAL IN NATURE AND GOES TO THE ROOT OF THE MATTER. THIS ISS UE CAN BE DECIDED ON THE BASIS OF THE FACTS ALREADY AVAILABLE ON RECORD AND NO NEW FACTS ARE REQUIRED TO BE VERIFIED OR INVESTI GATED FOR THE PURPOSE OF DECIDING THE ISSUE RAISED IN THE ADDITIO NAL GROUND. ACCORDINGLY IN VIEW OF THE DECISION OF HONBLE SUPR EME COURT IN CASE OF NTPC (SUPRA) AND IN THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR ADJUDICATION. 5. THE ADDITIONAL GROUND FOR THE ASSESSMENT YEAR 20 00-01 AND THE GROUND NO. 3 FOR THE ASSESSMENT YEAR 200102 A RE COMMON. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE THE GROUN D NO. 3 RAISED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2001 -02:- 3) I) . THE LEARNED CIT(A) FAILED TO APPRECIATE THE FACT THAT, REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME T AX ACT, 1961, AFTER FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, WHEN ALL THE MATERIAL FACTS NECESS ARY FOR ASSESSMENT WERE DISCLOSED AT THE TIME OF ORIGINAL ASSESSMENT NOT VALID IN LAW. II) THE LEARNED CIT(A) ALSO FAILED TO APPRECIATE TH E FACT THAT RE-OPENING OF ASSESSMENT ON THE BASIS OF REVIEW OF TDS CERTIFICATES, WHICH WERE FILED ALONG WITH THE RETUR N OF INCOME AND NOT ON RECEIPT OF ANY FRESH EVIDENCE, IS NOT VA LID IN LAW. III) FOR THESE OR ANY OTHER GROUND/GROUNDS OF APPEA L THAT MAY BE URGED AT THE TIME OF HEARING, IT IS PRAYED T HAT THE HONBLE TRIBUNAL MAY BE PLEASED THAT THE ORDER MAY BE SET ASIDE AND THE ORIGINAL ASSESSMENT ORDER PASSED UNDE R SECTION 143 OF THE ACT MAY BE RESTORED. 6. THE LEARNED A.R. OF THE ASSESSEE HAS SUBMITTED T HAT THE ORIGINAL ASSESSMENT COMPLETED UNDER SECTION 143(3) OF THE ACT. SINCE THE ASSESSMENTS HAVE BEEN REOPENED AFTER THE EXPIRY OF ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 4 FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS, THEN, THE REOPENING IS NOT PERMITTED WHEN THERE IS NO FAI LURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY AL L THE RELEVANT MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE FURNISHED AND DISCLOSED ALL THE RELEVANT INFORMATION, DETAILS, AND MATERIAL WITH RE GARD TO THE PROFESSIONAL FEES RECEIVED BY THE ASSESSEE DURING T HE PREVIOUS YEARS RELEVANT TO THE ASSESSMENT YEARS UNDER CONSID ERATION. THE ASSESSEE ALSO PRODUCED THE TDS CERTIFICATES ISSUED BY THE PARTIES AGAINST THE PROFESSIONAL RECEIPTS. IN THE ORIGINAL ASSESSMENT, THESE RECEIPTS WERE ALLOWED AS A DOMESTIC SALE UNDE R THE PROVISO TO SECTION 10A(1) OF THE ACT AND, SUBSEQUENTLY, THE ASSESSING OFFICER DECIDED TO REOPEN THE ASSESSMENT ON THE GRO UND THAT THE PROFESSIONAL FEE CANNOT BE CONSIDERED AS INCOME FRO M SALE OF SOFTWARE UNDER THE PROVISO TO SECTION 10A(1) OF THE INCOME-TAX ACT. HE HAS FURTHER SUBMITTED THAT NO NEW INFORMATI ON OR MATERIAL CAME TO THE KNOWLEDGE OF THE ASSESSING OFFICER AFTE R COMPLETION OF THE ORIGINAL ASSESSMENT UNDER SECTION 143(3), TH EREFORE, THE REOPENING OF THE ASSESSMENT AFTER EXPIRY OF FOUR YE ARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS IS NOT PERMITT ED WHEN THE ASSESSEE HAS ALREADY DISCLOSED ALL THE RELEVANT MAT ERIAL FACTS AS WELL AS INFORMATION NECESSARY FOR THE ASSESSMENT AN D, PARTICULARLY, ON THE POINT OF PROFESSIONAL FEE. HE HAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS REOPENED T HE ASSESSMENT ON THE BASIS OF MATERIAL ON THE RECORD F ILED BY THE ASSESSEE AND WAS PART OF THE ASSESSMENT RECORD. THE LEARNED A.R. HAS POINTED OUT THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE BASIS OF THE TDS CERTIFICATES, WH ICH WERE FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME AND IT IS VERY MUCH AVAILABLE WITH THE ASSESSING OFFICER AT THE TI ME OF THE ORIGINAL ASSESSMENT PASSED UNDER SECTION 143(3) OF THE ACT. THE ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 5 LEARNED A.R. HAS FURTHER SUBMITTED THAT DURING THE ORIGINAL ASSESSMENT PROCEEDINGS THE AO RAISED A QUERY FOR GI VING THE DETAILS OF TOTAL TURNOVER AND, IN REPLY TO THE SAME , THE ASSESSEE FILED THE DETAILS GIVING THE BREAK-UP OF THE TOTAL RECEIPTS. ONCE THE ASSESSING OFFICER HAS EXAMINED THE ISSUE OF TOT AL TURNOVER AND ACCEPTED THE CLAIM OF THE ASSESSEE, THEN, REOPE NING OF THE ASSESSMENT ON THE SAME ISSUE AFTER EXPIRY OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS IS NOT PERMITT ED. 7. ON THE OTHER HAND, THE LEARNED DR HAS SUBMITTED THAT MERELY FILING THE DETAILS OF DOMESTIC TURNOVER WITH OUT EXPLAINING THE FACT THAT THE PROFESSIONAL RECEIPTS ARE NOT FRO M DOMESTIC SALE OF COMPUTER SOFTWARE WOULD NOT AMOUNT TO DISCLOSURE FULLY AND TRULY ALL THE RELEVANT MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. HE HAS RELIED UPON THE ORDER OF THE CIT(APPEALS) FO R THE ASSESSMENT YEAR 2001-02. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE RE OPENING OF THE ASSESSMENT FOR THESE TWO YEARS IS AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. WHEN THE ORIGI NAL ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) AND THE ASSESSING OFFICER HAS ISSUED A NOTICE UNDER SECTION 148 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEARS, THEN, IT IS A PRE-CONDITION AS STIPULATED B Y THE PROVISO TO SECTION 147 THAT ACTION UNDER SECTION 147 CANNOT BE TAKEN UNTIL AND UNLESS THERE IS A FAILURE ON THE PART OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NEC ESSARY FOR THE ASSESSMENT AND, CONSEQUENTLY, THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE ASSESSING OFFICER RECORDED THE FOLLOWING REASONS FOR REOPENING OF THE ASSESSMENT: ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 6 YOU HAD AN EXPORT TURNOVER OF RS. 29.72 CRORES AND DOMESTIC INCOME FROM PROFESSIONAL FEE OF RS. 1.92 C RORES. AS PER THE TDS CERTIFICATES ISSUED BY THE DOMESTIC PAR TIES, THE PAYMENT IS CLASSIFIED AS PROFESSION FEE. THUS, THE RECEIPT IS NOT TOWARDS SALE OF ANY COMPUTER SOFTWARE. AS PER T HE PROVISIONS OF SECTION, 10A DEDUCTION IS AVAILABLE T O THE ASSESSEE IN RESPECT OF THE PROFITS AND GAINS DERIVE D BY AN INDUSTRIAL UNDERTAKING FROM THE EXPORT OF AN ARTICL E OR THING OR COMPUTER SOFTWARE THAT DO NOT EXCEED 25% OF THE TOTAL SALES SUCH PROFITS SHALL BE DEEMED TO BE THE PROFIT S AND GAINS DERIVED FROM EXPORT. HOWEVER, WHILE COMPLETIN G THE SCRUTINY ASSESSMENT, THE DOMESTIC TURNOVER RELATING TO PROFESSIONAL SERVICES RECEIVED FROM DOMESTIC PARTIE S WAS INCLUDED IN THE EXPORT TURNOVER BASED ON THE SAID P ROVISO. HOWEVER, RENDERING OF PROFESSIONAL SERVICES DOES NO T AMOUNT TO SALE OF COMPUTER SOFTWARE. AS IS CLEAR FR OM THE TDS CERTIFICATES, THE SERVICES PROVIDED ARE PROFESS IONAL SERVICES. APPARENTLY, THERE WAS NO SALE OF COMPUTER SOFTWARE. AS SUCH, THE SUM OF RS. 1.92 CRORES SHOUL D NOT HAVE BEEN TAKEN AS EXPORT TURNOVER. ON DOING SO, TH E PROPORTION OF THE INCOME NOT QUALIFYING FOR EXEMPTI ON U/S 10A INCREASES AND THE SOURCE OF REVENUE WHICH QUALI FIES FOR DEDUCTION U/S 10A ALSO REDUCES. 9. AS IT IS CLEAR FROM THE REASONS RECORDED BY THE AO THAT THE SAME DOES NOT DISCLOSE OR STATE THAT THERE WAS A FA ILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE AL L MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. IT IS SETTLED PROPOS ITION OF LAW THAT THE ASSESSMENT WAS SOUGHT TO BE REOPENED AFTER THE EXPIRY OF A PERIOD OF FOUR YEARS FROM THE END OF THE RELEV ANT ASSESSMENT YEAR, THE JURISDICTION CAN BE INVOKED UNDER SECTION 147 ONLY WHEN THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO F ULLY AND TRULY DISCLOSE ALL THE MATERIAL FACTS NECESSARY FOR THE A SSESSMENT. THE REASONS RECORDED BY THE AO DOES NOT EXHIBIT THAT TH E ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL THE RELEVANT MATERIAL FACTS NECESSARY FOR ASSESSMENT AND RESULTING THE INCOME ASSESSABLE TO TAX HAS ESCAPED ASSESSMENT. EVEN OTHERWISE, IT IS N OT A CASE OF WRONG PRESUMPTION OF FACTS BUT THE ISSUE ON WHICH T HE ASSESSMENT HAS BEEN REOPENED IS TREATMENT OF PROFES SIONAL ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 7 RECEIPTS AS DOMESTIC SALES AS PER THE PROVISION TO SECTION 10A(1). THUS, IT IS NOT THE CASE OF THE AO THAT ALLOWING TH E DEDUCTION UNDER SECTION 10A WHILE FRAMING THE ORIGINAL ASSESS MENT IS A PATENT ILLEGALITY RATHER THERE IS A POSSIBILITY OF TWO VIEWS ON THE ISSUE IN QUESTION. FURTHER, WHEN THE ASSESSING OFFI CER HAS EXAMINED THE ISSUE OF TOTAL TURNOVER AND ACCEPTED T HE CLAIM OF THE ASSESSEE WHILE FRAMING THE ASSESSMENT UNDER SEC TION 143(3), THEN, EVEN IF IT IS FOUND THAT THE CLAIM ALLOWED I N THE ORIGINAL ASSESSMENT SHOULD NOT HAVE BEEN ALLOWED THE SAME IT SELF, IS NOT A VALID REASON TO REOPEN THE ASSESSMENT BEYOND THE PERIOD OF FOUR YEARS AFTER THE END OF THE RELEVANT ASSESSMEN T YEARS. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE ABOVE DISCUSSION, WE ARE OF THE CONSIDERED OPINION THAT THE CONDITION PRECEDENT TO THE EXERCISE OF POWER TO REO PEN THE ASSESSMENT BEYOND A PERIOD OF FOUR YEARS OF EXPIRY OF THE RELEVANT ASSESSMENT YEAR IS NOT SATISFIED IN THE CA SE IN HAND. ACCORDINGLY, WE HOLD THAT THE REOPENING OF THE ASS ESSMENT FOR THE ASSESSMENT YEAR 2000-01 AS WELL AS FOR THE ASSE SSMENT YEAR 2001-02 ARE INVALID AND LIABLE TO BE SET ASIDE. 10. SINCE THE REOPENING OF ASSESSMENT FOR THE ASSES SMENT YEAR 2000-01 AND 2001-02 IS INVALID AND, CONSEQUENTLY, T HE ASSESSMENTS ITSELF ARE SET ASIDE, THEREFORE, WE DO NOT PROPOSE TO GO INTO THE ISSUES RAISED ON MERITS. NOW WE TAKE UP THE CROSS APPEALS BEING ITA NO. 808/HYD/07 AND 796/HYD/07 FOR THE ASSESSMENT YEAR 2003-04 11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS I N THESE APPEALS: 1.0 THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISA LLOWANCE OF BAD DEBTS WRITTEN OFF DURING THE YEAR OF RS.2,19 ,23,080/-, ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 8 WITHOUT FULLY APPRECIATING THE FACTS AND CIRCUMSTAN CES OF THE CASE. 1.1 THE LD. CIT(A) ERRED IN HOLDING THAT THE APPELL ANT HAD FAILED TO SUBSTANTIATE ITS CLAIM THAT THE DEBTS ALL OWABLE U/S 36(1)(VII) OF THE ACT WAS NOT ANY DEBT BUT A BAD DE BT TO BE WRITTEN OFF. 1.2 THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE FACT THAT THE DEBTS HAD ACTUALLY BECOME BAD DURING THE YEAR A ND WERE WRITTEN OFF AS BAD DEBTS IN ITS BOOKS OF ACCOUNT. 2.0 THE LD CIT(A) ERRED IN CONFIRMING THE DISALLOWA NCE OF ADVANCES OF RS. 14,60,121/-, WRITTEN OFF DURING THE YEAR WITHOUT APPRECIATING THE FACT THAT THE SAID AMOUNTS WERE ADVANCED DURING THE COURSE OF THE BUSINESS. 2.1 THE LD. CIT(A) ERRED IN CONFIRMING THAT THE ADV ANCES FOR ACQUISITION OF BUSINESS ASSETS OF RS. 1,29,900/- AN D RENTAL SECURITY DEPOSIT/ADVANCE OF RS. 8,85,734/- WERE ON CAPITAL ACCOUNT AND ERRED IN NOT APPRECIATING THE FACT THAT SUCH PAYMENTS WERE MADE DURING THE COURSE OF THE APPELLA NTS BUSINESS AND THEREFORE ALLOWABLE AS BUSINESS EXPENS ES. 2.2 THE LD. CIT(A) ERRED IN HOLDING THAT THE ADVANC ES GIVEN TO EMPLOYEES WRITTEN OFF OF RS. 2,76,703/- WOULD NO T QUALIFY FOR DEDUCTION FROM BUSINESS RECEIPTS IN THE FINANCI AL YEAR 2002-03. 2.3 THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF ADVANCES WRITTEN OFF OF RS. 1,77,784/- ON ACCOUNT O F TDS CERTIFICATES NOT RECEIVED BY THE APPELLANTS, SUMMAR ILY, WITHOUT CONSIDERING THE FACTS OF THE CASE. 2.4 WITHOUT PREJUDICE TO THE ABOVE, THE APPELLANTS SUBMIT THAT THE ADVANCES WRITTEN OFF DURING THE YEAR WERE ADVANCED AS PART AND PARCEL OF BUSINESS OPERATIONS AND THERE FORE SHOULD BE ALLOWED U/S 28/29 OF THE ACT. 3.0 THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOW ANCE OF SOFTWARE EXPENSES OF RS. 14,78,219/- ON THE BASIS T HAT IT WILL GIVE AN ENDURING BENEFIT TO THE APPELLANT AND THEREFORE IS OF CAPITAL IN NATURE. ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 9 3.1 THE LD. CIT(A) ERRED IN NOT CONSIDERING THE FAC T THAT THE ENTRIES IN THE BOOKS OF ACCOUNT IS NOT RELEVANT FOR DETERMINING THE NATURE OF EXPENDITURE. 3.2 WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) OUGHT TO HAVE ALLOWED DEPRECIATION @60% ON THE SAID SOFTWARE EXPENSES. 4.0 THE APPELLANTS PRAY THAT THE ORDER OF THE AO BE AMENDED TO GRANT THE RELIEFS CLAIMED ABOVE. 5.0 THE APPELLANTS CRAVE LEAVE TO ADD TO, ALTER OR AMEND, ANY OF THE FOREGOING GROUNDS OF APPEAL, IF AND WHEN NECESSARY. 12. GROUND NO. 1 IS REGARDING DISALLOWANCE OF BAD D EBTS WRITTEN OFF DURING THE YEAR. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE CLAIMED AN AMOUNT OF RS. 2,19,23,080/-TOWA RDS BAD DEBTS WRITTEN OFF. THE AO ASKED THE ASSESSEE TO PRO DUCE CERTAIN DETAILS IN RESPECT OF THE CLAIM OF BAD DEBTS WRITTE N OFF. THE ASSESSING OFFICER HAS NOTED IN THE ASSESSMENT ORDER THAT THE ASSESSEE WAS ASKED TO FURNISH THE COMPLETE DETAILS IN RESPECT OF THE CLAIM OF BAD DEBTS WRITTEN OFF BUT, IN RESPONSE , THE ASSESSEE HAS FILED ONLY THE DETAILS OF NAMES OF THE CONCERNS WHICH ARE TREATED AS BAD DEBTS. FINALLY, THE ASSESSING OFFICE R HAS OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED THE COPIES OF C ONTRACT AGREEMENT ENTERED INTO WITH THE ABOVE CONCERNS, COR RESPONDENCE AND EVIDENCE TO SHOW THAT THE ABOVE BAD DEBTS HAVE REALLY BECOME BAD. ACCORDINGLY, THE CLAIM OF THE ASSESSEE REGARDING BAD DEBTS WRITTEN OFF WAS DISALLOWED BY THE AO. ON APPE AL THE ASSESSEE FILED CERTAIN RECORDS IN SUPPORT OF THE CL AIM BEFORE THE CIT(APPEALS). 13. WE HAVE HEARD THE LEARNED AR OF THE ASSESSEE A S WELL AS THE LEARNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LEARNED AR OF THE ASSESSEE HAS SUBMITTED THAT T HE AO HAS ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 10 DISALLOWED THE CLAIM OF THE BAD DEBTS OF THE ASSESS EE ON THE GROUND THAT THE ASSESSEE FAILED TO ESTABLISH THAT T HE DEBTS WRITTEN OFF BY THE ASSESSEE HAVE ACTUALLY BECOME BAD. HE HA S RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF TRF LIMITED V. CIT, 323 ITR 397 (SC) AND SUBMITTED THAT AS HELD BY THE HONBLE SUPREME COURT THERE IS NO REQUIREMENT OF ESTABLISHI NG THAT THE DEBTS HAVE ACTUALLY BECOME BAD ONCE THE ASSESSEE HA S WRITTEN OFF THE DEBTS AS UNRECOVERABLE DURING THE YEAR UNDER CO NSIDERATION. HE HAS FURTHER POINTED OUT THAT THE CIT(APPEALS) FA ILED TO CONSIDER THE RELEVANT MATERIAL FILED BY THE ASSESSE E IN SUPPORT OF THE CLAIM. ON THE OTHER HAND, THE LEARNED DR HAS SU BMITTED THAT MERELY WRITING OFF THE DEBT IS NOT SUFFICIENT FOR C LAIMING THE DEDUCTION BUT THE DECISION OF WRITING OFF THE DEBTS AS BAD SHOULD BE AN HONEST DECISION OF THE ASSESSEE. HE HAS RELIE D UPON THE ORDERS OF THE AUTHORITIES BELOW. 14. AFTER CONSIDERING THE RIVAL CONTENTIONS AND GOI NG THROUGH THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE A SSESSING OFFICER HAS DISALLOWED THE CLAIM OF BAD DEBTS ON TW O COUNTS, NAMELY, I) THE ASSESSEE FAILED TO PRODUCE THE COMPL ETE DETAILS REGARDING THE DEBTS WRITTEN OFF BY THE ASSESSEE AND II) THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE DEBT HAS ACTUALLY BECOME BAD. AS FAR AS THE REQUIREMENT OF ESTABLISHING THAT THE DEBT HAS ACTUALLY GONE BAD, THE SAME IS NOT ESSENTIAL FOR CL AIMING THE DEDUCTION OF BAD DEBTS IN VIEW OF THE DECISION OF H ONBLE SUPREME COURT IN CASE OF TRF LIMITED V. CIT (SUPRA). HOWEVER, WHEN THE ASSESSEE HAS FILED THE ADDITIONAL MATERIAL BEFORE T HE CIT(APPEALS), WHICH HAS NOT BEEN PROPERLY EXAMINED , THEREFORE, IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE RECORD OF THE ASSESSING OFFICER FOR VERIFICATION AND EXAMINATION OF THE RECORD FILED BY THE ASSESSEE AND THEN DECIDE THE ISSUE AF RESH IN THE ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 11 LIGHT OF THE DECISION OF HONBLE SUPREME COURT IN C ASE OF TRF LTD. (SUPRA). 15. GROUND NO.2 IS REGARDING DISALLOWANCE OF ADVANC ES OF RS. 14,60,121/- WRITTEN OFF DURING THE YEAR. 16. WE HAVE HEARD THE LEARNED AR AS WELL AS THE LEA RNED DR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THIS I SSUE IS ALSO SIMILAR TO THE DISALLOWANCE OF BAD DEBTS WRITTEN OF F AS IN GROUND NO.1. SINCE THE ISSUE OF DISALLOWANCE OF BAD DEBTS WRITTEN OFF HAS BEEN SET ASIDE TO THE RECORD OF THE ASSESSING OFFIC ER, THEREFORE, THIS ISSUE IS ALSO REMITTED TO THE RECORD OF THE AS SESSING OFFICER FOR DECIDING AFRESH AFTER CONSIDERING ALL RELEVANT MATERIAL FILED BY THE ASSESSEE. 17. GROUND NO.3 IS REGARDING DISALLOWANCE OF SOFTWA RE EXPENSES BEING CAPITAL IN NATURE: 18. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFIC ER THAT THESE EXPENSES WERE INCURRED BY THE ASSESSEE FOR DE VELOPMENT OF SYNERGY AND INCIDENTAL MANAGEMENT SOFTWARE. SINCE T HE SOFTWARE WAS NOT READY UP TO THE END OF THE YEAR THE EXPENDI TURE INCURRED WAS SHOWN AS CAPITAL WORK-IN-PROGRESS IN THE BOOKS OF ACCOUNT. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE A SSESSEE BY TREATING THE SAME AS CAPITAL IN NATURE. ON APPEAL, THE CIT(APPEALS) SUSTAINED THE DISALLOWANCE MADE BY THE AO. 19. BEFORE US, THE LEARNED AR OF THE ASSESSEE HAS R EITERATED THE CONTENTIONS AS RAISED BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE CLAIMED THE SAID EXPENDITURE AS R EVENUE IN NATURE SINCE THE LIFE OF THE SOFTWARE WAS NOT MORE THAN ONE YEAR AND WOULD BECOME OBSOLETE IN THE NEXT YEAR ITSELF. THE LEARNED AR HAS FURTHER SUBMITTED THAT EVEN THE DEPRECIATION WAS ALSO NOT ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 12 ALLOWED BECAUSE THE ASSET WAS SHOWN IN WORK-IN-PROG RESS. ON THE OTHER HAND THE LEARNED DR HAS ADMITTED THAT THE ASS ESSEE HAS INCURRED THE EXPENDITURE IN QUESTION FOR DEVELOPMEN T OF SOFTWARE WHICH HAS BEEN SHOWN AS WORK-IN-PROGRESS. SINCE THE SOFTWARE WAS TO BE USED BY THE ASSESSEE FOR ITS BUSINESS AND HAVING AN ENDURING BENEFIT, THEREFORE, THE EXPENDITURE CANNOT BE ALLOWED AS REVENUE AND THE ASSESSEE ITSELF HAS SHOWN THE SAME AS CAPITAL WORK-IN-PROGRESS IN THE BOOKS OF ACCOUNT. AS REGARD S THE DEPRECIATION ON THE SAID EXPENDITURE, THE LEARNED DR HAS SUBMITTED THAT SINCE THE ASSETS HAS NOT COME INTO E XISTENCE AND IT HAS NOT BEEN USED FOR THE BUSINESS OF THE ASSESS EE THE CLAIM OF DEPRECIATION IS NOT ALLOWABLE. HE HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW. 20. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE TH AT THE EXPENDITURE WAS INCURRED BY THE ASSESSEE FOR DEVELO PMENT OF SOFTWARE TO BE USED IN THE ASSESSEE'S BUSINESS OF S OFTWARE. THIS IS EVIDENT FROM THE ASSESSEE'S BOOKS OF ACCOUNT THA T THE ASSESSEE HAS SHOWN THE SAID EXPENDITURE AS WORK-IN-PROGRESS BEING CAPITAL IN NATURE. HAVING REGARD TO THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT WHEN TH E ASSESSEE HAS INCURRED THE EXPENDITURE FOR BRINGING A NEW ASS ET INTO EXISTENCE TO BE USED FOR THE BUSINESS OF THE ASSESS EE, THEN, THE SAME CANNOT BE ALLOWED AS REVENUE EXPENDITURE. SINC E THE ASSET WAS NOT YET COME INTO EXISTENCE, THEREFORE, THERE I S NO QUESTION OF ALLOWING ANY DEPRECIATION FOR THE YEAR UNDER CON SIDERATION AND, HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW ON THIS ISSUE. THE IMPUGNED O RDER OF THE CIT (APPEALS) IS UPHELD ON THIS ISSUE. ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 13 21. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL FOR THE ASSESSMENT YEAR 2003-04: 1. THE LEARNED CIT(A) ERRED IN ALLOWING THE ASSESSE ES APPEAL IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) OUGHT TO HAVE CONSIDERED THE FOLLOWIN G FACTS THAT A. THE INCOME TAX ACT HAS NOT DEFINED THE TERM TOT AL TURNOVER. B. ON THE BASIS OF COMMON PARLANCE THE TOTAL TURNOV ER IS NOTHING BUT THE REAL INVOICE VALUE. THIS REAL INVOI CE VALUE CAN NEVER EXCLUDE ANY LOSS ON ACCOUNT OF EXCHANGE FLUCTUATION. C. AS PER THE INCOME-TAX ACT, THE SAME AMOUNT OF LO SS ON ACCOUNT OF EXCHANGE FLUCTUATION CAN BE ALLOWED AS N ORMAL ALLOWABLE BUSINESS EXPENDITURE. IT MEANS IT IS THE CLAIM OF EXPENDITURE BUT NOT AN EXCLUSION FROM TOTAL TURNOVE R. 22. WE HAVE HEARD THE LEARNED DR AS WELL AS THE LEA RNED AR OF THE ASSESSEE AND CONSIDERED THE RELEVANT MATERIAL O N RECORD. FOR COMPUTATION OF DEDUCTION UNDER SECTION 10A THE ASSE SSEE HAS REDUCED THE TOTAL TURNOVER BY THE AMOUNT OF FOREIGN EXCHANGE LOSS OF RS. 57,08,958/-. THE ASSESSING OFFICER ADOP TED THE TOTAL TURNOVER AS TAKEN IN THE PROFIT AND LOSS ACCOUNT AN D ACCORDINGLY QUANTIFIED THE ELIGIBLE DEDUCTION UNDER SECTION 10A . ON APPEAL, THE CIT( APPEALS) HAS ALLOWED THE CLAIM OF THE ASSE SSEE BY HOLDING THAT THE TOTAL TURNOVER FOR THE PURPOSE OF COMPUTATION OF 10A DEDUCTION HAS TO BE TAKEN AFTER EXCLUDING THE FOREIGN EXCHANGE LOSS FROM THE TOTAL TURNOVER SHOWN IN THE PROFIT AND LOSS ACCOUNT. THE LEARNED A.R. OF THE ASSESSEE HAS BROUG HT TO OUR NOTICE THAT THIS ISSUE IS COVERED BY THE DECISION O F SPECIAL BENCH OF THIS TRIBUNAL IN CASE OF SAK SOFT LTD 313 ITR (A T) 353 (CHENNAI) (SB). HE HAS FURTHER POINTED OUT THAT THE DECISION OF THE SPECIAL BENCH IN THE CASE OF SAK SOFT LIMITED H AS BEEN UPHELD BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. M/S TATA ELXSI LTD AND GROUP OF OTHER CASES REPORTED IN 2011-TIOL- ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 14 684-HC-KAR-I T. A COPY OF THE DECISION OF HONBLE K ARNATAKA HIGH COURT HAS BEEN FILED BY THE LEARNED AR OF THE ASSES SEE. WE NOTE THAT AFTER CONSIDERING THE DECISION OF SPECIAL BENC H IN CASE OF SAK SOFT LTD., THE HONBLE KARNATAKA HIGH COURT HAS HEL D IN THE CASE OF CIT VS TATA ELXSI LTD AND OTHER GROUP CASES(SUPR A) AS UNDER: FROM THE AFORESAID JUDGMENTS, WHAT EMERGES IS THAT, THERE SHOULD BE UNIFORMITY IN THE INGREDIENTS OF BOTH THE NUMERATOR AND THE DENOMINATOR OF THE FORMULA, SINCE OTHERWISE IT WOULD PRODUCE ANOMALIES OR ABSURD RESU LTS. SECTION 10A IS A BENEFICIAL SECTION. IT IS INTENDED TO PROVIDE INCENTIVES TO PROMOTE EXPORTS. THE INCENTIVE IS TO EXEMPT PROFITS RELATABLE TO EXPORTS. IN THE CASE OF COMBIN ED BUSINESS OF AN ASSESSEE, HAVING EXPORT BUSINESS AND DOMESTIC BUSINESS, THE LEGISLATURE INTENDED TO HAVE A FORMULA TO ASCERTAIN THE PROFITS FROM EXPORT BUSINE SS BY APPORTIONING THE TOTAL PROFITS OF THE BUSINESS ON T HE BASIS OF TURNOVERS. APPORTIONMENT OF PROFITS ON THE BASIS OF TURNOVER WAS ACCEPTED AS A METHOD OF ARRIVING AT EXPORT PROF ITS. IN THE CASE OF SECTION 80HHC, THE EXPORT PROFIT IS TO BE DERIVED FROM THE TOTAL BUSINESS INCOME OF THE ASSESSEE, WHE REAS IN SECTION 10-A, THE EXPORT PROFIT IS TO BE DERIVED FR OM THE TOTAL BUSINESS OF THE UNDERTAKING. EVEN IN THE CASE OF BUSINESS OF AN UNDERTAKING, IT MAY INCLUDE EXPORT B USINESS AND DOMESTIC BUSINESS, IN OTHER WORDS, EXPORT TURNO VER AND DOMESTIC TURNOVER. THE EXPORT TURNOVER WOULD BE A COMPONENT OR PART OF A DENOMINATOR, THE OTHER COMPO NENT BEING THE DOMESTIC TURNOVER. IN OTHER WORDS, TO THE EXTENT OF EXPORT TURNOVER, THERE WOULD BE A COMMONALITY, T HE UNDERSTANDING SHOULD ALSO BE THE SAME. IN OTHER WOR DS, IF THE EXPORT TURNOVER IN THE NUMERATOR IS TO BE ARRIV ED AT AFTER EXCLUDING CERTAIN EXPENSES, THE SAME SHOULD A LSO BE EXCLUDED IN COMPUTING THE EXPORT TURNOVER AS A COMP ONENT OF TOTAL TURNOVER IN THE DENOMINATOR. THE REASON BE ING THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER. THE COMPON ENTS OF THE EXPORT TURNOVER IN THE NUMERATOR AND THE DENOMI NATOR CANNOT BE DIFFERENT. THEREFORE, THOUGH THERE IS NO DEFINITION OF THE TERM TOTAL TURNOVER IN SECTION 10A, THERE IS NOTHING IN THE SAID SECTION TO MANDATE THAT, WHAT IS EXCLUD ED FROM THE NUMERATOR THAT IS EXPORT TURNOVER WOULD NEVERTH ELESS FORM PART OF THE DENOMINATOR. THOUGH WHEN A PARTICU LAR WORD IS NOT DEFINED BY THE LEGISLATURE AND AN ORDIN ARY MEANING IS TO BE ATTRIBUTED TO THE SAME, THE SAID O RDINARY MEANING TO BE ATTRIBUTED TO SUCH WORD IS TO BE IN C ONFORMITY WITH THE CONTEXT IN WHICH IT IS USED. WHEN THE STAT UTE ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 15 PRESCRIBES A FORMULA AND IN THE SAID FORMULA, EXP ORT TURNOVER IS DEFINED, AND WHEN THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER, THE VERY SAME MEANING GIVEN TO THE EXPORT TURNOVER BY THE LEGISLATURE IS TO BE ADOPTED WHILE UNDERSTANDING THE MEANING OF THE TOTAL TURNOVER, WH EN THE TOTAL TURNOVER INCLUDES EXPORT TURNOVER. IF WHAT IS EXCLUDED IN COMPUTING THE EXPORT TURNOVER IS INCLUDED WHILE ARRIVING AT THE TOTAL TURNOVER, WHEN THE EXPORT TURNOVER IS A COMPONENT OF TOTAL TURNOVER, SUCH AN INTERPRETATION WOULD RUN COUNTER TO THE LEGISLATIVE INTENT AND IMPERMISS IBLE. IF THAT WERE THE INTENTION OF THE LEGISLATURE, THEY WO ULD HAVE EXPRESSLY STATED SO. IF THEY HAVE NOT CHOSEN TO EXP RESSLY DEFINE WHAT THE TOTAL TURNOVER MEANS, THEN, WHEN TH E TOTAL TURNOVER INCLUDES EXPORT TURNOVER, THE MEANING ASSI GNED BY THE LEGISLATURE TO THE EXPORT TURNOVER IS TO BE RES PECTED AND GIVEN EFFECT TO, WHILE INTERPRETING THE TOTAL TURNO VER WHICH IS INCLUSIVE OF THE EXPORT TURNOVER. THEREFORE THE FOR MULA FOR COMPUTATION OF THE DEDUCTION U/S 10A, WOULD BE AS U NDER: PROFITS OF THE BUSINESS EXPORT TURNOVER OF THE UNDERTAKING X_________________ (EXPORT TURNOVER + DOMESTIC TURNOVER TOTAL TURN OVER IN THAT VIEW OF THE MATTER, WE DO NOT SEE ANY ERROR COMMITTED BY THE TRIBUNAL IN FOLLOWING THE JUDGMENT S RENDERED IN THE CONTEXT OF SECTION 80 HHC IN INTERP RETING SECTION 10A WHEN THE PRINCIPLE UNDERLYING BOTH THES E PROVISIONS IS ONE AND THE SAME. THEREFORE, WE DO NO T SEE ANY MERIT IN THESE APPEALS. THE SUBSTANTIAL QUESTIO N OF LAW FRAMED IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE. 23. SINCE THE ISSUE IS COVERED BY THE DECISION OF S PECIAL BENCH IN THE CASE OF SAK SOFT LTD. AS WELL AS THE DECISI ON OF HONBLE KARNATAKA HIGH COURT CIT VS TATA ELXSI LTD AND OTHE R GROUP CASES(SUPRA), THEREFORE, RESPECTFULLY FOLLOWING THE SAME, THIS ISSUE IS DECIDED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE ORDER OF CIT(APPEALS) ON THIS ISSUE I S UPHELD AND THE GROUND RAISED BY THE REVENUE IS DISMISSED. ITA NOS. 796 & 808/HYD/07 AND 863/HYD/10 & 46/HYD/ 09 M/S INTELLIGROUP ASIA PVT. LTD. 16 24. IN THE RESULT, ASSESSEES APPEALS BEING 46/HYD/ 09, & 863/HYD/10 FOR ASSESSMENT YEARS 2000-01 AND 2001-02 ARE ALLOWED, THE APPEAL BEING ITA NO. 808/HYD/07 IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND REVENUES APPEAL BEING ITA NO. 796/HYD/07 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 22/06/2012. SD/- SD/- (CHANDRA POOJARI) (VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DT/- 22 ND JUNE, 2012. KV COPY FORWARDED TO: 1. THE DCIT, CIRCLE 2(1) 5 TH FLOOR, AAYAKAR BHAVAN, HYDERBAD. 2. M/S INTELLIGROUP ASIA PVT. LTD., 5 - 9 - 22, MANAS SAROVAR COMPLEX, OPP. SECRETARIAT, HYDERBAD. 3. COMMISSIONER OF INCOME - TAX(APPEALS) - V I , HYDERABAD 4. COMMISSIONER OF INCOME - TAX - I I , HYDERABAD 5. THE D.R., ITAT, HYDERABAD.