DATA COMP WEB TECHOLOGIES (I) P. LTD, MUMBAI V. ITO 8(1)(3), MUMBAI

ITA 8134/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79349 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 05-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 10B; 10

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) . . , , ./I.T.A. NO.526 & 527/MUM/2011 ( ! ' # / ASSESSMENT YEARS : 2006-07 & 2007-08) M/S DATA C OMP WEB TECHNOLOGIES (INDIA) PVT LTD., C-205/206, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 / VS. ASSTT. COMMISSIONER OF INCOME TAX, 8(1), 369, AAYAKAR BHAVAN, M K ROAD, MUMBAI-400020 ( $% / APPELLANT) .. ( &'$% / RESPONDENT) ./I.T.A. NO.8134/MUM/2011 ( ! ' # / ASSESSMENT YEAR : 2008-09) M/S DATA C OMP WEB TECHNOLOGIES (INDIA) PVT LTD., 2 ND FLOOR, TECHNIPLEX II, JN.VEER SAVAREKAR FLYOVER AND S V ROAD, GOREGAON (W), MUMBAI-400062 / VS. INCOME TAX OFFICER - 8(1)(3), MUMBAI. ( $% / APPELLANT) .. ( &'$% / RESPONDENT) $ ./ ( ./PAN/GIR NO. : AABCD1668B $% ) / APPELLANT BY : SHRI MAHAVIR JAIN &'$% * ) /RESPONDENT BY : SHRI SANJEEV JAIN + , * - . / DATE OF HEARING : 16.7.2014 /0#' * - . /DATE OF PRONOUNCEMENT : 16.7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: ALL THESE THREE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE LD. CIT(A)-16, MUMBAI AND THEY RELATE TO THE ASSESSMENT YEARS 2006-07 TO 2008-09. I.T.A. NO.526 & 527/MUM/2011 I.T.A. NO.8134/MUM/2011 2 2. SINCE THE ISSUE BEFORE US FOR OUR ADJUDICATION I N THESE APPEALS IS IDENTICAL IN NATURE, THERE WERE HEARD TOGETHER A ND ARE BEING DISPOSED OF BY THIS COMMON ORDER, FOR THE SAKE OF C ONVENIENCE. 3. IN ALL THESE THREE APPEALS, THE ASSESSEE IS AGGR IEVED BY THE DECISION OF LD. CIT(A) IN CONFIRMING THE ACTION OF AO IN REDUCING THE DEDUCTION ELIGIBLE U/S 10A OF THE INCOME TAX ACT, 1961 OF THE INCOME TAX ACT, 1961 (THE ACT) BY ALLOCATING A PORT ION OF GENERAL EXPENSES TO THE UNIT ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT. 4. FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF DEVELOPMENT OF COMPUTER SOFTWARE AN D ALSO ENGAGED IN THE BUSINESS OF TRADING IN COMPUTER SOFTWARE AND HARDWARE. IN THE RETURN OF INCOME FILED FOR ALL THE THREE YEARS UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION U/S 1 0A OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO FILE SEPARATE PROFIT AND LOSS ACCOUNT F OR THE UNIT ELIGIBLE FOR DEDUCTION U/S 10A AND OTHER UNIT. TH E AO NOTICED THAT THE ASSESSEE DID NOT APPORTION DIRECTORS TRAVELLIN G EXPENSES AND TELEPHONE EXPENSES ETC TO THE UNIT ELIGIBLE FOR DED UCTION U/S 10A. THE AO TOOK THE VIEW THAT A PORTION OF THEM SHOULD HAVE BEEN ALLOCATED TO THE UNIT ELIGIBLE FOR DEDUCTION U/S 10 A OF THE ACT AND ACCORDINGLY ALLOCATED A PORTION OF GENERAL EXPENSES IN ALL THE THREE YEARS, WHICH RESULTED IN REDUCTION OF THE PROFIT FR OM THE UNIT ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT AND CONSEQUENT RED UCTION OF DEDUCTION UNDER THAT SECTION. THE LD. CIT(A) ALSO C ONFIRMED THE I.T.A. NO.526 & 527/MUM/2011 I.T.A. NO.8134/MUM/2011 3 SAME IN ALL THE THREE YEARS. AGGRIEVED, THE ASSESS EE HAS FILED THESE APPEALS BEFORE US. 5. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS WRONGLY CLAIMED DED UCTION U/S 10A OF THE ACT AND FURTHER SUBMITTED THAT IT IS ELIGIBL E FOR DEDUCTION U/S 10B OF THE ACT. ACCORDINGLY, HE SUBMITTED THAT THE IMPUGNED ISSUE SHOULD BE CONSIDERED WITH REFERENCE TO THE PROVISIO NS OF SECTION 10B OF THE ACT. 6. THE LD. DR, HOWEVER, OBJECTED TO THE PLEA MADE B Y THE LD. AR. THE LD. DR SUBMITTED THAT THE AO AS WELL AS THE LD. CIT(A) HAS CONSIDERED THE IMPUGNED ISSUE IN ALL THE THREE YEAR S IN THE CONTEXT OF PROVISIONS OF SECTION 10A ONLY. 7. IN THE REJOINDER, THE LD. AR ADMITTED THAT THE M ATTER RELATING TO DEDUCTION U/S 10B OF THE ACT WAS NOT EXAMINED BY THE TAX AUTHORITIES. WHEN IT WAS POINTED OUT THAT THE CLAI M NOW MADE BEFORE THE BENCH FOR SUBSTITUTION OF DEDUCTION U/S 10A WITH SEC. 10B IS A NEW CLAIM, BEING MADE FOR THE FIRST TIME, THE LD A.R AGREED THAT THE MATTER MAY BE SET ASIDE TO THE FILE OF THE AO A ND ALSO SUBMITTED THAT THE ASSESSEE WOULD BE IN A POSITION TO EXPLAIN BEFORE THE AO AS TO WHY THERE IS NO NECESSITY OF ALLOCATING THE GENE RAL EXPENSES AGAINST THE ELIGIBLE UNIT. THE LD. DR, ALSO DID NO T OBJECT TO THE PLEA OF THE ASSESSEE THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE AO. I.T.A. NO.526 & 527/MUM/2011 I.T.A. NO.8134/MUM/2011 4 8. HAVING HEARD RIVAL CONTENTIONS, WE ARE OF THE VI EW THAT THE PLEA MADE BY THE LD. AR FOR DEDUCTION U/S 10B NEEDS TO BE EXAMINED AFRESH AT THE END OF THE AO, SINCE THE CRI TERIA FOR ALLOWING DEDUCTION U/S 10A AND 10B ARE DIFFERENT. ACCORDING LY, WE SET ASIDE THE ORDER OF LD. CIT(A) ON THIS ISSUE IN ALL THE TH REE YEARS AND RESTORE THE SAME TO THE FILE OF AO WITH A DIRECTIO N TO CONSIDER THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 10B OF THE ACT IN PLACE OF SECTION 10A OF THE ACT. IN THE SET ASIDE PROCEEDIN GS, THE AO IS FREE TO EXAMINE THE QUESTION OF ALLOCATION OF GENERAL EX PENSES TO THE ELIGIBLE UNIT BY DULY CONSIDERING THE INFORMATION/E XPLANATION THAT MAY BE FURNISHED BY THE ASSESSEE. AFTER AFFORDING N ECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 9. IN THE RESULT, ALL THE THREE APPEALS FILED BY TH E ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16TH JULY , 2014. /0#' + 1 2 3 16 TH JULY, 2014 0 * , 4 SD SD ( /SANJAY GARG) ( . . / B.R. BASKARAN ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER + , MUMBAI: 16TH JULY,2014. . . ./ SRL , SR. PS I.T.A. NO.526 & 527/MUM/2011 I.T.A. NO.8134/MUM/2011 5 ! ' / COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &'$% / THE RESPONDENT. 3. + 6- ( ) / THE CIT(A)- CONCERNED 4. + 6- / CIT CONCERNED 5. 78 &-9! , . 9! ' , + , / DR, ITAT, MUMBAI CONCERNED 6. : , / GUARD FILE. ; + / BY ORDER, TRUE COPY < (ASSTT. REGISTRAR) . 9! ' , + , /ITAT, MUMBAI