India Healthcare Solutions Pvt Ltd., CHENNAI V. ITO, CHENNAI

ITA 826/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8929 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 01-04-2016
• Court: TRIBUNAL
• Department Lawyers: V VIVEKANANDAN
• Assessee Lawyers: T BANUSEKAR
• Section: 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ! ' , # '$ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER . /ITA NOS. 825 & 826/MDS/2016 / ASSESSMENT YEARS : 2006-07 & 2011-12 INDIA HEALTHCARE SOLUTIONS PVT. LTD., NO. 9D, 1 ST LANE, KARANEESHWARAR KOIL STREET, MYLAPORE, CHENNAI 600 004. PAN AABCI4741E ( /APPELLANT) V. THE INCOME-TAX OFFICER, COMPANY WARD-II(1), CHENNAI. RESPONDENT) / APPELLANT BY : SHRI T. BANUSEKAR, FCA / RESPONDENT BY : SHRI V. VIVEKANANDAN, CIT ! / DATE OF HEARING : 08.06.2016 '# ! / DATE OF PRONOUNCEMENT : 06.07.2016 % / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAIN ST THE COMMON ORDER OF THE COMMISSIONER OF INCOME-TAX(APPE ALS) DATED 4.2.2016 FOR THE ASSESSMENT YEARS 2006-07 AND 2011-12. - - ITA 825 & 826/16 2 2. THE FIRST COMMON ISSUE IN THESE APPEALS IS WITH REGARD TO NON-ALLOWING OF DEDUCTION UNDER SEC. 10B OF THE ACT . 3. AT THE TIME OF HEARING, THE LD. AR SUBMITTED THA T THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.10A OF THE A CT BUT WRONGLY CLAIMED DEDUCTION U/S.10B AND IT WAS A TECHNICAL MI STAKE. HE SUBMITTED THAT ALTERNATE CLAIM OF THE ASSESSEE U/S. 10A MAY BE ALLOWED, IN VIEW OF THE ORDER OF THIS TRIBUNAL IN A SSESSEES OWN CASE IN ITA NO.897/MDS/2015 FOR THE ASSESSMENT YEAR 2010-11. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED ON RECORD. THE LD. DR HAS NOT RAISED ANY SE RIOUS OBJECTION. SIMILAR ISSUE WAS CONSIDERED BY THIS TR IBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2010-11 IN ITA NO.897/MDS//2015. THE TRIBUNAL VIDE ITS ORDER DATED 29 TH OCTOBER, 2015 HAS HELD AS FOLLOWS: 10. ON GOING THROUGH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE DO NOT FIND ANY INFIRMITY IN UPHOLDING THE ASSESSMENT ORDER IN REJECTING THE DED UCTION UNDER SECTION 10B OF THE ACT. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE ALTERNATIVE CLAIM OF THE ASSESSEE THAT IT IS ELIGIBLE FOR DEDUCTION UNDER SE CTION 10A OBSERVING THAT AS PER THE PROVISIONS OF SECTION 10A ONLY THOSE INDUSTRIAL UNDERTAKINGS WHICH ARE ESTABL ISHED IN SEZ ON OR AFTER 01.04.2001 ARE ELIGIBLE FOR DEDU CTION. HE WAS OF THE VIEW THAT ASSESSEES UNDERTAKING WAS REGISTERED IN STPI AND NOT UNDER SEZ AND THEREFORE THE ASSESSING OFFICER HAS RIGHTLY REJECTED THE ALTERNAT IVE CLAIM - - ITA 825 & 826/16 3 OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 10A OF THE ACT. 11. COUNSEL FOR THE ASSESSEE REFERRING TO THE PROVI SIONS OF SUB-SECTION (2) (I)(B) OF SECTION 10A SUBMITS THAT AN UNDERTAKING WHICH BEGINS TO MANUFACTURE OR PRODUCE ARTICLES OR THINGS OR COMPUTER SOFTWARE DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON OR AFTER 01.04.1994 IN ANY ELECTRONIC HARDWARE TECHNOLOGY PARK, OR AS THE CASE MAY BE SOFTWARE TECHNOLOGY PARK, IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT. HE SUBMITS THAT THIS PROVIS ION WAS COMPLETELY IGNORED BY THE ASSESSING OFFICER AND HE WAS OF THE VIEW THAT AN UNDERTAKING COMMENCING ON OR AF TER 1ST DAY OF APRIL,1984 IN ANY SEZ AS MENTIONED IN CL AUSE (2)(I)(C) OF SECTION 10A ONLY IS ELIGIBLE FOR DEDUC TION. 12. ON GOING THROUGH THE PROVISIONS OF SECTION 10A AND SUB-CLAUSE 2(I)(B) AND ALSO SUB-SECTION (2)(I) (C) OF SECTION 10A, WE FIND CONSIDERABLE FORCE IN THE SUBMISSIONS OF THE COUNSEL FOR THE ASSESSEE. WE ARE OF THE VIEW THAT ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS) HAVE COMPLETELY OVERLOOKED THE PROVISIONS IN REJECTING THE CLAIM OF THE ASSESSEE THAT IT IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 10A OF THE ACT. THUS, WE RE STORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR THOROUGH EXAMINATION AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW I.E. WHETHER THE ASSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 10A OF THE ACT OR NOT. IN VIEW OF THE ABOVE ORDER OF THE TRIBUNAL, WE REMI T THIS ISSUE BACK TO THE FILE OF THE AO FOR THOROUGH EXAMINATION AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW I.E. WHETHER THE A SSESSEE IS ENTITLED FOR DEDUCTION UNDER SECTION 10A OF THE ACT OR NOT. - - ITA 825 & 826/16 4 5. THE NEXT ISSUE RAISED BY THE ASSESSEE IN ITA NO.825/MDS/2016 IS WITH REGARD TO REOPENING OF ASSE SSMENT IS BAD IN LAW. 6. AT THE TIME OF HEARING, THE LD. AR STATED THAT T HE ASSESSEE DID NOT THIS ISSUE FOR THE ASSESSMENT YEAR 2006-07. ACCORDINGLY, THIS GROUND IS DISMISSED IN ITA NO.825/MDS/2016. 7. THE NEXT ISSUE RAISED BY THE ASSESSEE IN ITA NO.826/MDS/2016 IS WITH REGARD TO INTERNET CHARGES OF 15,62,168/- IS NOT BE EXCLUDED FROM THE EXPORT TURN OVER OF THE ASSESSEE WHILE CALCULATING THE PROFITS ELIGIBLE FOR CLAIMING EXEMPTION U/S.10B/10A OF THE ACT. 8. WE HAVE HEARD BOTH THE PARTIES. AS HELD BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. SAK S OFT LTD.(30 SOT 55) FOR THE PURPOSE OF COMPUTATION OF EXEMPTION U/S.10A, WHEN THE EXPORT TURNOVER IS NUMERATOR TO BE ADJUSTE D AFTER EXCLUDING THE COMMUNICATION EXPENSES, THE SAME SHOU LD BE EXCLUDED FROM THE EXPORT TURNOVER AS A COMPONENT A S WELL AS FROM THE TOTAL TURNOVER, WHICH ARE THE NUMERATOR AN D THE DENOMINATOR, RESPECTIVELY, IN THE FORMULA. - - ITA 825 & 826/16 5 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF JULY, 2016 AT CHENNAI. SD/- SD/- ( $% & ) ( ' ( ) $ ) *%+,-,./01,2345,.62,+778,293 : ;< /JUDICIAL MEMBER ! ;<=>>70.?,.?@A1BA2 ': /CHENNAI, C; /DATED, THE 6 TH JULY, 2016. MPO* ;D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H3 /CIT(A) 4. H /CIT 5. FIJ K /DR 6. JLM /GF.