ITO, WD-43(3), KOLKATA, Kolkata V. Vipul Gupta, Kolkata

ITA 868/KOL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 1399 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-06-2015
• Court: TRIBUNAL

Judgement Text

1 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 , A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA ( ) . . , . . ! , ' #$ ) [BEFORE SHRI P.M. JAGTAP, VICE PRESIDENT & SHRI A. T. VARKEY, JM] I.T.A. NO. 868/KOL/2015 ASSESSMENT YEAR: 2010-11 INCOME-TAX OFFICER, WD-43(3), KOLKATA VS. VIPUL GUPTA (PAN: AHQPG6542E) APPELLANT RESPONDENT DATE OF HEARING 07.01.2019 DATE OF PRONOUNCEMENT 20.03.2019 FOR THE APPELLANT SHRI C. J. SINGH, JCIT, SR. DR FOR THE RESPONDENT SHRI SUBASH AGARWAL, ADVOCATE ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-13, KOLKATA DATED 19.03.2015 FOR AY 2010-11. 2(A). THE FIRST GROUND OF APPEAL OF THE REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN LAW AND AS WELL AS IN FACTS IN ALLOWING THE ASSESSE ES CLAIM OF EXEMPTION U/S. 10B OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT) OF RS.71,41,875/- BY TAKING INTO ACCOUNT THE PARA 3 OF THE GUIDELINES T O SET UP A SOFTWARE EXPORT HOUSE, WHEREIN EXEMPTION IS ALLOWABLE U/S. 10A AND NOT U/S . 10B OF THE ACT. (B) THE SECOND GROUND OF APPEAL OF REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN LAW IN NOT CONSIDERING THE FACT THAT THE ASSESSEES PROPRIETARY CONCERN M/S. E- KNOWLEDGE MARKETING IS FORMED BY SPLITTING UP OR RE CONSTRUCTION OF THE BUSINESS ALREADY IN EXISTENCE AND THEREBY VIOLATED THE PROVI SIONS OF SEC. 10B(II) AND (III) OF THE ACT. THE THIRD GROUND OF APPEAL OF REVENUE IS THAT THE LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT CONSIDERING THE FACT THA T THE ASSESSEES BUSINESS ACTIVITIES 2 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 OF INFORMATION TECHNOLOGY WAS IN THE NATURE OF TRAD ING ACTIVITIES OF COMPUTER SOFTWARE AND NOT IN THE NATURE OF MANUFACTURING ACT IVITIES. 3. THEREFORE, WE NOTE THAT THE MAIN GRIEVANCE OF TH E REVENUE IS AGAINST THE ACTION OF THE LD. CIT(A) IN ALLOWING THE CLAIM OF T HE ASSESSEE U/S. 10B OF THE ACT. 4. BRIEF FACTS OF THE CASE ARE THAT THE AO NOTED TH AT THE ASSESSEE HAS SHOWN INCOME FROM PROPRIETARY CONCERN E-KNOWLEDGE MARKETI NG UNDER THE HEAD BUSINESS AND ALSO CLAIMED EXEMPTION U/S. 10B OF T HE ACT FOR AN AMOUNT OF RS.71,41,875/-. THE AO NOTED THAT THE ASSESSEE HAD FILED AUDIT REPORT IN FORM NO. 3CD ALONG WITH AUDITED ACCOUNTS AND BALANCE SHEET F OR THE YEAR ENDING 31.03.2010 IN RESPECT OF PROPRIETARY CONCERN E-KNOWLEDGE MARKE TING. THE AO ACKNOWLEDGES THAT A REPORT IN FORM NO. 56G (RULE 16E) WAS ALSO F ILED DURING THE ASSESSMENT PROCEEDINGS. THE AO NOTED FROM THE AUDIT REPORT TH AT THE NATURE OF THE BUSINESS OR PROFESSION OF THE ASSESSEE IS WEB DEVELOPMENT & E- COMPUTER MARKETING. FROM THE BUSINESS THE ASSESSEE HAS SHOWN A NET PROFIT OF RS.71,41,874.92 IN ITS P&L ACCOUNT. THE AO NOTED FROM THE ANNEXURE-A OF FORM 56G THAT THE DATE OF REGISTRATION AS 100% EOU AND THE DATE OF COMMENCEME NT OF MANUFACTURE IS CLAIMED FROM 17.11.2008 AND AS PER THE AUDIT REPORT THE ASS ESSEE IS CLAIMING DEDUCTION U/S. 10B OF THE ACT FOR THE SECOND YEAR I.E. IN RESPECT OF AY 2010-11. THE AO NOTED THAT THE ASSESSEES PROPRIETORSHIP UNIT M/S. E-KNOWLEDGE MARKETING WAS APPROVED AS 100% EOU UNDER THE STP SCHEME VIDE LOP NO. STPI-KOL /577/2008-09/1883 DATED 17.11.2008 AT AE-90, RABINDRA PALLY, KESTOPUR , KOLKATA-700 101. IT WAS NOTED BY THE AO THAT FROM A REPLY RECEIVED FROM STP I, KOLKATA VIDE LETTER DATED 26.09.2011, THE UNIT WAS ALREADY EXISTING IN DTA, T HE COMMENCEMENT OF PRODUCTION WAS TAKEN FROM 17.11.2008 AND IT WAS ALSO STATED IN THE SAID LETTER THAT THE UNIT OF THE ASSESSEE SHIFTED TO ITS LOCATION TO AB-65, PROFULLA KANON, KESTOPUR, KOLKATA-700 101 WHICH WAS ALSO APPROVED IN THE RECORD OF STPI, KOLK ATA ON 29.04.2009. ACCORDING TO AO, THAT THOUGH THE ASSESSEE CLAIMS EXEMPTION U/ S. 10B OF THE ACT IT HAD NO APPROVAL FROM THE BOARD APPOINTED IN THIS BEHALF AS CLARIFIED BY THE CBDT VIDE INSTRUCTION NO. 02/2009 DATED 09.03.2009 AND CORRIG ENDUM DATED 08.05.2009. THE 3 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 AO ALSO DID NOT AGREE WITH THE CONTENTION OF THE AS SESSEE THAT IT IS A MANUFACTURING UNIT WHEN IT IS ONLY DOING WEB DEVELOPMENT AND E-C OMPUTER MARKETING. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE AO REJEC TED THE CLAIM OF DEDUCTION U/S. 10B OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO ALLOW THE SAME. AGGRIEVED, THE REVENUE IS BEFORE US. 5. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE FIRST G ROUND OF APPEAL OF THE REVENUE IS ERRONEOUS FOR THE SIMPLE REASON THAT THOUGH THE ASS ESSEE CLAIMED DEDUCTION BEFORE THE AO U/S. 10B OF THE ACT, THE ASSESSEE HAD FILED AN A DDITIONAL GROUND OF APPEAL BEFORE THE LD. CIT(A) TO CONSIDER ITS CLAIM U/S. 10A INSTE AD OF U/S. 10B SINCE IT FULFILLED ALL THE CONDITIONS FOR CLAIMING DEDUCTION U/S. 10A OF T HE ACT. WE NOTE THAT THE LD. CIT(A) AT PAGE 25 OF THE ORDER AFTER TAKING NOTE OF THE HONBLE SUPREME COURT DECISION IN THE CASE OF GOETZ INDIA LTD. VS. CIT (2 006) 204 CTR (SC) 182 AND THE DIVISION BENCH DECISION OF THE HONBLE DELHI HIGH C OURT IN THE CASE OF CIT VS. JAI PARABOLIC SPRINGS LTD. (2008) 306 ITR 42 WHEREIN TH E HONBLE DELHI HIGH COURT HELD AT PARA 17 OF THE ORDER THAT THE HONBLE SUPRE ME COURT DISMISSED THE APPEAL IN THE CASE OF GOETZ INDIA LTD. MAKING IT CLEAR THAT T HE DECISION RENDERED IN THE GOETZ INDIA LTD. IS IN RESPECT TO THE POWER OF THE AO TO ENTERTAIN A CLAIM FOR REDUCTION OTHERWISE THAN BY A REVISED RETURN AND DID NOT IMPI NGE ON THE POWERS OF THE TRIBUNAL. FURTHER, IN PARA 19 THE HONBLE HIGH COURT HELD THA T THERE IS NO PROHIBITION ON THE POWERS OF THE TRIBUNAL TO ENTERTAIN ADDITIONAL GROU ND WHICH ACCORDING TO TRIBUNAL ARISES IN THE MATTER AND FOR THE JUST DECISION OF T HE CASE. THEREAFTER, THE LD. CIT(A) ACCEPTED THE ASSESSEES ADDITIONAL GROUND AND THE A SSESSEES CLAIM OF DEDUCTION U/S. 10A OF THE ACT WAS EXAMINED SINCE THE ASSESSEE HAS WRONGLY CLAIMED DEDUCTION U/S. 10B INSTEAD OF 10A OF THE ACT. THEREFORE, THE LD. C IT(A) OBSERVED THAT THE CLAIM MADE BY ASSESSEE CANNOT BE DENIED TO ASSESSEE, IF T HE ASSESSEE IS OTHERWISE ELIGIBLE FOR DEDUCTION U/S. 10A OF THE ACT BY FULFILLING ALL THE CONDITIONS STIPULATED UNDER LAW. THEREAFTER, THE LD. CIT(A) TAKING NOTE OF THE FACT THAT ASSESSEE HAD FULFILLED ALL THE CONDITIONS TO FULFILL THE ELIGIBILITY FOR DEDUCTION U/S. 10A HAD ALLOWED DEDUCTION U/S. 10A ON THE EXPORT EARNING FOR ITS ITES BUSINESS CAR RIED OUT BY THE ASSESSEE TO EARN 4 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 INCOME. WE NOTE THAT THE LD. CIT(A) AT PARA 6.1 RE JECTED THE CONTENTION OF THE REVENUE THAT THE ASSESSEES PROPRIETARY CONCERN WAS FORMED BY SPLITTING UP OR RECONSTRUCTION OF BUSINESS AND IS HIT BY SEC. 10B(2 )(III) OF THE ACT BY HOLDING AS UNDER: 6.1. THE OTHER GROUND FOR REJECTION OF CLAIM U/S. 10B(2)(II) AND 10B(2)(III) OF THE IT ACT. IN THIS CASE AN EXISTING UNIT HAS SUBSEQUENTLY BEEN AP PROVED AS 100% EOU UNDER STPI SCHEME W.E.F. 17.11.2008 . IN THE LETTER CLARIFYING THE ABOVE FAC T TO ITO JOINT DIRECTOR ,STPI HAS STATED AS UNDER : - TO SRI MRITYUNJAY MALAKAR , INCOME TAX OFFICER, WARD-43 (3) OFFICER OF THE INCOME TAX OFFICER, WARD - 43(3) 3,GOVT. PLACE (WEST) ,GROUND FLOOR KOLKATA- 700001. SUB:: INFORMATION W.R.T. VIPUL GUPTA: PAN AHQPG6542 E UNIT: M/S. EKNOWLEDGE MARKETING. REF :: YOUR LETTER NO.ITO, WD -43 (3)/KOL/SCRUTINY ASST.2011- 12/553 DATED 17.08.2011. AS REQUIRED WE ARE SUBMITTING HEREWITH OUR REPLY TO YOUR QUERIES W.R.T. VIPUL GUPTA PAN AHQPG6542E UNIT: M/S. EKNOWLEDGE MARKETING, A UNIT REGISTERED UNDER STP SCHEME. 1. MR. VIPUL GUPTA APPLIED AT STPI KOLKATA FOR RE GISTRATION OF HIS PROPRIETORSHIP UNIT M/S. EKNOWLEDGE MARKETING UNDER STP SCHEME. 2. THE UNIT (M/S. EKNOWLEDGE MARKETING) WAS APPROVE D AS 100% EXPORT ORIENTED UNIT UNDER STP SCHEME VIDE LOP NO.STPI-KOL/577/2008-09/1883 DATED 17.11.2008 AT AE90, RABINDRA PALLY, TALIBAGAN, KRISHNAPUR (KESTOPUR), KOLKATA - 700 101 . SINCE THE UNIT WAS ALREADY EXISTING IN DTA THE COMMENCEMENT OF PRODUCTION WAS TAKEN W.E.F AT 1 7.11.2008. 3. LATER ON THE UNIT SHIFTED ITS OPERATION TO AB-65 , PRAFULLA KANAN, KRISHNAPUR (KESTOPUR- WEST) KOLKATA - 700101 , WHICH WAS APPROVED IN OUR RECORD S ON 29.04.2009. 4. AS PER PARA 2.2 OF NOTIFICATION NO. 33/9RE)/92-9 7 DATED 22.03.1994 AS AMENDED BY FURTHER NOTIFICATION AND/OR EXIM POLICY/FOREIGN TRADE POLIC Y AS STP UNIT MAY BE SETUP BY THE CENTRAL GOVERNMENT, STATE GOVERNMENT, PUBLIC SECTOR UNDERTA KINGS OR ANY COMBINATION THEREOF. A STP MAY BE AN INDIVIDUAL UNIT BY ITSELF OF IT MAY BE ONE OF SUCH UNITS LOCATED IN AN AREA DESIGNATED AS STP COMPLEX. THUS IT'S APPARENT THAT AN INDIVIDUAL UNIT APPROVED UNDER THE SCHEME BECOMES AN INDIVIDUAL STP UNIT . HENCE , THE OPERATION OF M/S. EKNOWLEDGE MARKETING FROM THE APPROVED LOCATION IS TREATED AS A STP LOCATION UNDER THE JURISDICTION OF DIRECTOR, SOFTWARE TECHNOLOGY PARKS OF INDIA, KOLKATA. 5. THE UNIT HAS EXISTED FROM STP SCHEME W.E.F. 30.0 6.2010. ' SD/- 5 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 JOINT DIRECTOR OF STPI FURTHER, IN CIRCULAR NO 01/2005 DATED 06.0L.2005 WH ILE CLARIFYING PROVISION OF SECTION 10B IT HAS BEEN STATED THAT A UNIT IN DTA (DOMESTIC TARIFF ARE A) CAN CLAIM DEDUCTION AS 100% EOU FROM THE DATE IT IS APPROVED AS SUCH. THEREFORE, ASSESSEE'S CLAIM CANNOT BE REJECTED U/S. 10B(2)(II) AND (2)(II I), IN VIEW OF THE FACTS AS CLARIFIED BY JOINT DIRECTO R, STPI. 6. WE NOTE THAT THE OTHER GROUND OF REJECTION BY TH E AO WAS THAT THE ASSESSEE WAS A TRADING CONCERN AND THE NATURE OF BUSINESS WA S NOT EXPLAINED DURING THE COURSE OF ASSESSMENT. THE LD. CIT(A) HAS DEALT THIS ISSUE IN PARA 6.2 AS UNDER: 6.2 THE OTHER GROUND OF REJECTION BY AO WAS THAT A SSESSEE WAS A TRADING CONCERN AND NATURE OF BUSINESS WAS NOT EXPLAINED AND DURING THE COURSE OF ASSESSMENT. ASSESSMENT RECORD WAS CALLED FOR AND VERIFIED. AS S EEN FROM THE RECORD, DURING THE COURSE OF ASSESSMENT ASSESSEE HAD EXPLAINED THE DET AILS OF HIS BUSINESS AS UNDER :- ' SUBJECT TO THE ABOVE, I WOULD LIKE TO TAKE THIS O PPORTUNITY TO EXPLAIN HOW OUR BUSINESS BASICALLY WORKS :- UNLIKE TRADITIONAL IT-& LTES COMPANIES, EKNOWLEDGE MARKETING ENTERS INTO PERFORMANCE DRIVEN CONTRACT WITH THE CLIENT WHERE W E ARE RESPONSIBLE BOTH PRODUCT CREATION AS WELL AS MARKETING OF E-PRODUCTS. WE ARE A PAID ON PER LEAD OR, PER SALE BASIS. HERE IS A STEP BY STEP OVERVIEW. 1. WE ENTER INTO AN AGREEMENT WITH A CLIENT AND NEG OTIATE A PAYMENT THAT WE WILL RECEIVE AGAINST EACH LEAD THAT WE GENERATE FOR THE CLIENT. 2. TO DO THIS WE ARE REQUIRED TO BUILD SITES, AS WE LL AS DIGITAL BOOKS (EBOOKS) OF VARYING SIZE AND CONTENT AS SPECIFIED BY THE CLIENT THAT IS THEN MARKETED GLOBALLY. 3. WE SUB-CONTRACT THE PROCESS OF LEAD GENERATION T O COMPANIES LIKE INTEGRA CLICK WHICH ACT AS OUR CHANNEL PARTNERS. THEY ARE THEN RE SPONSIBLE FOR THE GENERATION OF TRAFFIC TO THE WEBSITES THAT WE HAVE BUILT FOR THE CLIENT. 4. ALL SALES AND CREDIT CARD PROCESSING HAPPEN DIRE CTLY ON THE CLIENT'S WEBSITE AND IT IS LOGGED WITH THEIR CRM. 5. CLIENTS VERIFIES THE SALE/LEAD AND THEN PAY US T HE FEE THAT WE HAVE AGREED UPON. 6. PAYMENT IS MADE TO THE MARKETING CHANNEL PARTNER S FROM OUR END AT DIFFERENT INTERVALS AS AGREED UPON IN SEPARATE TERMS WITH THE M. I HOPE I HAVE BEEN ABLE TO CLARIFY THE PROCESS. FURTHER, HE HAD GIVEN ALL THE AGREEMENT WITH PARTIE S TO WHOM HE HAD SOLD HIS PRODUCTS AND ALSO THE PARTIES TO WHO PAYMENT HAS BEEN MADE F OR MARKETING HIS PRODUCT ALSO BY GIVING THEIR FULL PARTICULARS. THE DETAILS OF PAYM ENTS MADE AND RECEIVED WAS ALSO GIVEN. IN VIEW OF THE ABOVE ASSESSEES CLAIM OF EARNING IN COME FROM ITES CANNOT BE DENIED ON MERE SUSPICION. 6 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 7. WE NOTE THAT IN ORDER TO SUBSTANTIATE ITS CLAIM OF DEDUCTION U/S. 10A OF THE ACT, THE ASSESSEE HAD FILED THE FOLLOWING DOCUMENTS: I) COPY OF LETTER OF REGISTRATION UNDER STP SCHEME FROM THE AUTHORITY OF STPI DATED 17.11.2008 PLACED AT PAGE 24 AND 25 OF PAPER BOOK. II) COPY OF LEGAL AGREEMENT FOR SOFTWARE TECHNOLOGY PARK UNITS UNDER STP SCHEME PLACED AT PAGE 26 TO 29 OF THE PAPER BOOK. III) COPY OF LETTER DATED 26.11.2008 ISSUED BY AUTH ORITY OF STPI IN RESPECT OF COMMENCEMENT OF PRODUCTION AND VALIDITY OF REGISTRA TION PLACED AT PAGE 30 OF THE PAPER BOOK. IV) COPY OF GREEN CARD ISSUED BY STPI PLACED AT PAG E 31 TO 31A OF THE PAPER BOOK. V) COPY OF LETTER DATED 21.03.2013 FROM STPI PLACED AT PAGE 32 OF THE PAPER BOOK. VI) COPY OF FORM 56G ALONG WITH AUDITED FINAL ACCOU NTS FOR THE AY 2009-10 PLACED AT PAPER BOOK PAGES 33 TO 34. VII) COPY OF ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT FOR THE AY 2009-10 PLACED AT PAPER BOOK PAGES 45 TO 47. VIII) COPY OF LETTER DATED 26.09.2011 FROM STPI PLA CED AT PAPER BOOK PAGES 50 TO 51. 8. FROM THE AFORESAID DOCUMENTS FILED AS WELL AS WE TAKE NOTE FROM THE ASSESSMENT ORDER PASSED U/S. 143(3) FOR AY 2009-10 WHEREIN THE AO HAS GRANTED THE BENEFIT OF SECTION 10B FOR THE PERIOD FROM 17.11.20 08 TO 31.03.2009. FROM A PERUSAL OF THE LIST OF NOTIFIED INFORMATION TECHNOLOGY ENAB LED PRODUCTS OR SERVICES U/S. 10A/10B EXTRACT FROM THE TAXMAN MASTER GUIDE OF INC OME TAX ACT IS PLACED FROM PAGES 48 TO 49 OF THE PAPER BOOK WHEREIN WE NOTE TH AT THE CONTENTS DEVELOPMENT OR ANIMATION, DATA PROCESSING, CALL CENTERS, BACK OFFI CE OPERATIONS HAVE ALSO BEEN NOTIFIED AS INFORMATION TECHNOLOGY ENABLED PRODUCTS OR SERVICE U/S. 10A/10B BY THE CBDT IN EXERCISE OF POWER CONFERRED BY CLAUSE (B) O F ITEM (I) OF EXPLANATION 2 OF SECTION 10A AND CLAUSE (B) OF ITEM (I) OF EXPLANATI ON 2 TO SECTION 10B. WE NOTE THAT THE ASSESSEES PROPRIETORSHIP CONCERN IS ENGAGED IN THE BUSINESS OF WEB DEVELOPMENT AND E-COMPUTER MARKETING AND RUNNING ITS BUSINESS UNDER THE NAME 7 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 AND STYLE OF E-KNOWLEDGE MARKETING. WE NOTE THAT T HIS ENTITY WAS REGISTERED WITH THE SOFTWARE TECHNOLOGY PARK, KOLKATA (STP) W.E.F. 17.11.2008. IN THIS ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE HAD SHOWN NE T PROFIT OF RS.71,41,875/- SO, THE SAME WAS CLAIMED AS EXEMPT U/S. 10B OF THE ACT. TH E AO REJECTED THE CLAIM U/S. 10B OF THE ACT ON THE GROUND THAT THE ASSESSEE DID NOT OBTAIN ANY APPROVAL FROM THE BOARD APPOINTED ON THIS BEHALF FOR AVAILING BENEFIT U/S. 10B FOR ITS BUSINESS UNIT. ACCORDING TO AO, AN APPROVAL GRANTED BY THE DEVELOPMENT COMMI SSIONER IN CASE OF 100% EOU UNIT WILL BE CONSIDERED VALID ONLY ONCE SUCH APPROV AL IS RATIFIED BY THE BOARD AND APPROVAL OF EOU SCHEME. WE NOTE THAT THE ASSESSEE HAS APPLIED FOR THE RATIFICATION AS REQUIRED BY CBDT CIRCULAR FOR CLAIMING EXEMPTION U/S. 10B OF THE ACT PURSUANT TO WHICH THE ASSESSEE WAS IN RECEIPT OF A LETTER DATED 21.03.2012 FROM THE STPI WHICH STATE THAT NO RATIFICATION WAS REQUIRED FOR UNITS A PPROVED BY THE DIRECTORS, STPI AFTER 31.03.1999 UNDER STP SCHEME. RELYING ON THIS RATIF ICATION LETTER, THE ASSESSEE CLAIMED THE EXEMPTION U/S. 10B. WE NOTE THAT THE AS SESSEE HAS RECEIVED THE GREEN CARD ISSUED BY THE SOFTWARE TECHNOLOGY PARKS OF IND IA (STPI) IN SUPPORT OF ITS CLAIM U/S. 10B AND HAS NOTED EARLIER IN THE EARLIER AY 20 09-10 THE ASSESSEES CLAIM U/S. 10B WAS ALLOWED BY THE AO IN THE SCRUTINY ASSESSMENT U/ S. 143(3). OUR ATTENTION WAS DRAWN TO THE DECISION OF THE COORDINATE BENCH OF TH IS TRIBUNAL IN HYDERABAD WHEREIN THE CASE OF ITO VS. M/S. SECUNDERABAD SOFTWARE SERV ICES PVT. LTD. ITA NO. 1501/HYD/2011 DATED 10.04.2012 THE TRIBUNAL HELD AS UNDER: WE HEARD THE PARTIES AND PERUSED THE IMPUGNED ORD ERS OF THE LOWER AUTHORITIES. THE ONLY QUESTION THAT CLINECHES THE ISSUE INVOLVED IN THIS APPEAL IS WHETHER FOR BECOMING ELIGIBLE TO THE DEDUCTION UNDER S.10B OF THE ACT, W HETHER IT IS ENOUGH IF THE ASSESSEE IS REGISTERED WITH SOFTWARE TECHNOLOGY PARK OF INDIA A S A 100% EOU OR IT IS ALSO NECESSARY FOR THE ASSESSEE TO HAVE THE APPROVAL OF THE BOARD CONSTITUTED BY THE CENTRAL GOVERNMENT UNDER S. 14 OF THE INDUSTRIES (D EVELOPMENT AND REGULATION) ACT, 1951. THE CIT(A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE, AND HELD THE ASSESSEE AS ELIGIBLE FOR DEDUCTION UNDER S. 10B OF THE ACT, FOLLOWING THE DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL IN THE FOLLO WING CASES: (A) VSN MAKRO TECHNOLOGY P. LTD. VIS. ACIT (ITA NO. 1057/HYD/2010) DATED 13.1.2011, WHEREIN THE STILL EARLIER DECISION OF TH E TRIBUNAL IN THE CASE OF INFOTECH ENTERPRISES LTD. (SUPRA), RELIED BY THE ASSESSING O FFICER IN THE IMPUGNED ASSESSMENT ORDER HAS BEEN CONSIDERED AND THE SAME HAS BEEN HEL D TO BE INAPPLICABLE AS THE SAME HAS BEEN RENDERED PRIOR TO ISSUANCE OF INSTRUCTION NO. 1 DATED 31.3.2006 BY THE CBDT AND LETTER DATED 23.3.2006 ISSUED BY THE MINISTRY O F COMMUNICATIONS AND TECHNOLOGIES. 8 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 (B) DCIT VIS. VALLIANT COMMUNICATION LTD. (ITA NO.2 706/DE1/2008 DATED 23.4.2010) (2010-TIOL-452- ITAT-DEL), WHEREIN THE STILL EARLIE R DECISION OF THE DELHI BENCH IN THE CASE OF ITO VS. REGENCY CREATIONS LTD. (ITA NO. 4006IDEI12006) DATED 13.4.2006 HAS BEEN FOLLOWED. (C) SMT. K. SUDHA RANI VIS. ITO (ITA NO.1750IHYDL20 08) DATE 30.10.2009 CONSISTENT WITH THE VIEW TAKEN BY VARIOUS BENCH OF THE TRIBUNA L, INCLUDING THE BENCHES AT HYDERABAD, IN SIMILAR MATTERS, WE HOLD THAT THE ASS ESSEE, HAVING BEEN REGISTERED WITH THE STPL IS ENTITLED FOR DEDUCTION UNDER S.10B OF T HE ACT. IN THAT VIEW OF THE MATTER, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER OF THE C IT(A), WHICH IS ACCORDINGLY CONFIRMED AND THE GROUNDS OF THE REVENUE ARE REJECT ED. ' 9. IT WAS BROUGHT TO OUR NOTICE THAT CBDT HAS DECLA RED A LIST OF NOTIFIED INFORMATION TECHNOLOGY ENABLED SERVICES OR PRODUCTS WHICH MAY CLAIM EXEMPTION U/S. 10A/10B OF THE ACT. THE SAID LIST HAS BEEN D ECLARED VIDE NOTIFICATION NO. SO 890(E) DATED 26.09.2000 AND AS PER ENTRY (X)(I)/XV (OF THE SAID LIST) THAT BACK OFFICE OPERATION AND WEBSITE SERVICES . 10. WE ALSO FIND FROM PAGE 51 OF THE PAPER BOOK CON TAINING A LETTER DT. 02-09- 2011 ADDRESSED TO THE ASSESSEE BY SOFTWARE TECHNOLO GY PARKS OF INDIA (STPI), MINISTRY OF COMMUNICATION & INFORMATION TECHNOLOGY, DEPT OF IT, GOVT. OF INDIA, KOLKATA REGARDING REGISTRATION FOR SETTING UP STP UNIT ( 100% EXPORT ORIENTED UNIT UNDER STP SCHEME). THE SAME IS REPRODUCED HERE IN B ELOW FOR THE SAKE OF CONVENIENCE:- SOFTWARE TECHNOLOGY PARKS OF INDIA MINISTRY OF COMMUNICATION & INFORMATION TECHNOLOGY, DEPT OF IT, GOVT. OF INDIA PLOT NO.5/1 DP SECTOR-V, SALT LAKE, KOLKATA-700 091 PH: 91-33-2367-3598/99-2367 3798/99, FAX [phone] EMAIL: [e-mail]/URLHTTP://WWW.KOL.STP.IN TO THE DIRECTOR WIZARD ENTERPRISES PVT. LTD. 5, LAKE AVENUE, KOLKATA - 700026 SUB: YOUR STP UNIT APPROVAL RATIFICATION REG. REF: YOUR LETTER DT: 29.08.2011 SIR, WITH REFERENCE TO ABOVE AND DISCUSSIONS WITH YOUR O FFICIALS, THE FACTS W.R.T, YOUR STP UNIT REGISTRATION IS PRODUCED BELOW: 9 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 1. YOUR UNIT 'WIZARD ENTERPRISES PVT. LTD.' IS REGI STERED AS A 100% EXPORT ORIENTED UNIT UNDER STP SCHEME VIDE LOP NO. STPK:DIR:441:200 5-06:1548 DT: 10.01.2006 AS PER NOTIFICATION NO. 33/(RE)(92-97 DT: 22.03.199 4 READ WITH SUBSEQUENT AMENDMENTS AND EXIM POLICY ( FOREIGN TRADE POLICY. 2. AS PER PARA 6.26 OF FOREIGN TRADE POLICY 2004-20 09: 'IN THE CASE OF UNITS UNDER EHTP /STP SCHEMES, NECE SSARY APPROVAL/ PERMISSION UNDER RELEVANT PARAGRAPHS OF THIS CHAPTE R SHALL BE GRANTED BY THE OFFICER DESIGNATED BY THE MINISTRY OF COMMUNICA TION AND INFORMATION TECHNOLOGY, DEPARTMENT OF INFORMATION TECHNOLOGY IN STEAD OF THE DEVELOPMENT COMMISSIONER AND BY THE INTER-MINISTERI AL STANDING COMMITTEE (IMSC) INSTEAD OF BOA: 3. APPROVAL OF YOUR UNIT IS GRANTED BY DIRECTOR, ST PI AS PER POWERS DELEGATED ON HIM BY THE IMSC. THANKING YOU. YOURS FAITHFULLY, SD/- [MANJIT NAYAK] OFFICER- IN -CHARGE COPY TO: 1. THE DIRECTOR, STPI-KOLKATA / GUWAHATI 11. IT WAS ALSO BROUGHT TO OUR ATTENTION BY THE L D.AR THAT THE INSTRUCTION (F.NO.178/19/2008-IT-I) DATED 9 TH MARCH 2009 ISSUED BY CBDT CLARIFIES THAT THE POWER TO GRANT APPROVAL U/S. 14 OF INDUSTRIAL (DE VELOPMENT & REGULATIONS) ACT, 1951 HAS BEEN DELEGATED TO DEVELOPMENT COMMISSIONERS AND APPROVAL GRANTED BY THE DEVELOPMENT COMMISSIONER SHALL BE CONSIDERED VALID FOR THE PURPOSE OF EXEMPTION U/S. 10B. IT WOULD BE PERTINENT TO NOTE THAT IN THE INS TANT CASE APPROVAL UNDER THE STP SCHEME IS GRANTED BY THE DESIGNATED OFFICER, DEPAR TMENT OF INFORMATION TECHNOLOGY AND BY THE INTER-MINISTERIAL STANDING COMMITTEE (IM SC). HENCE, THE APPROVAL GRANTED UNDER STP SCHEME COMPLIES WITH ALL THE REQUIREMENT S CONTEMPLATED U/S. 10B OF THE ACT WHEN READ WITH INDUSTRIAL (DEVELOPMENT & REGUL ATIONS) ACT, 1951, FOREIGN TRADE POLICY 2004-2009, HAND BOOK OF PROCEDURES (VOLUME-I ) & APPENDIX TO THE HANDBOOK. WE ALSO FIND THAT THE LD.AR FURTHER ARGUED BEFOR E US THAT TO THE BEST OF HIS KNOWLEDGE THE ORDER PASSED UNDER SIMILAR CIRCUMSTANCES BY THE LD.CIT(A)-II, KOLKATA IN THE CASE OF ARB SOFTWARE (INDIA) LTD FOR THE ASSESSMENT YEAR 2 003-04 HAS NOT BEEN APPEALED BY 10 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 THE REVENUE BEFORE THE TRIBUNAL. WE FIND FORCE IN THE CASE LAW AS RELIED UPON BY THE ASSESSEE ON THE DECISION OF THE CO-ORDINATE BENCH O F THE ITAT CHANDIGARH (SUPRA) IN THE CASE OF BEBO TECHNOLOGIES P.LTD VS. JCIT (SUPRA) , WHEREIN THE LEARNED AO DENIED DEDUCTION U/S. 10B TO THE ASSESSEE ON THE GROUND TH AT NO APPROVAL WAS OBTAINED FROM THE BOARD APPOINTED BY THE CENTRAL GOVT. IN EXERCISE OF POWER CONFERRED BY SECTION 14 OF INDUSTRIAL (DEVELOPMENT & REGULATION) ACT 1951 & RU LES MADE UNDER THAT ACT. IT WAS ULTIMATELY HELD IN THAT CASE AS UNDER:- 39. THE LD. DR FOR THE REVENUE BEFORE US HAS FAIL ED TO POINT OUT ANY CONTRARY EVIDENCE TO THE SAME. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE GAZETTED NOTIFICATION IN THIS REGARD PLACED AT PAGE 16 OF THE PAPER BOOK- II UNDER WHICH THE POWERS HAD BEEN GIVEN TO CONSIDER THE APPLICATION FOR SETTING UP OF UNITS UNDER STP SCHEME OPERATED VIDE CUSTOM NOTIFICATION NO. 138 AND 140 DATED 22.10.1991. THE SAID COMMITTEE WAS ALSO EMPOWERED TO CONSIDER THE PROPOSALS FOR INDUSTRIAL LICENSE, FORE IGN TECHNICAL COLLABORATION, AGREEMENT AND IMPORT OF .CAPITAL GOODS. THE ASSESSEE HAS FURNISHE D THE REGISTRATION UNDER THE SOFTWARE TECHNOLOGY PARK SCHEME OF INDIA VIDE APPROVAL NO. S TPIM/PCMG/PSE/02/199-7492 DATED 17.2.2003 REGISTERING THE ASSESSEE AS AN 100% EOU. THE COPY OF THE SAID CERTIFICATE IS ENCLOSED AT PAGES 105 TO 109 OF THE PAPER BOOK ALON GWITH THE COPY OF THE AGREEMENT ENTERED INTO BY THE ASSESSEE COMPANY WITH STPI ON 17.2.2003 , A COPY OF WHICH IS ENCLOSED AT PAGES 111 TO 113 OF THE PAPER BOOK. IN VIEW OF THE ABOVE SAID EVIDENCE, UPHOLDING THE ORDER OF CIT(A), WE HOLD THAT THE ASSESSEE IS ENTITLED TO DE DUCTION U/S 10B OF THE ACT AS A 100% EOU ON BEING REGISTERED WITH STPI. IN THE ENTIRETY OF F ACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF OUR OBSERVATION IN PARAS HEREINABOVE, WE UP HOLD THE ORDER OF CIT(A) IN HOLDING THAT THE ASSESSEE IS ELIGIBLE TO THE EXEMPTION CLAIMED U /S. 10B OF THE ACT. ACCORDINGLY, GROUND NO.2 RAISED BY THE REVENUE IS THUS DISMISSED. 12. WE NOTE THAT THE ASSESSEE SUBMITTED BEFORE THE LD. CIT(A) A REVISED COMPUTATION OF TOTAL INCOME ALONG WITH FORM 56F TOW ARDS ITS ALTERNATE CLAIM U/S. 10A AND RELIED ON THE ORDER OF THE HONBLE DELHI HI GH COURT IN THE CASE OF CIT VS. TELCHNOVATE E SOLUTIONS (P) LTD. REPORTED IN 354 IT R 110 (DEL) WHEREIN THEIR LORDSHIPS HELD AS UNDER: THE POSITION IS ALSO CLEAR FROM A LETTER DATED 0 6.05.2009 ISSUED BY THE CBDT TO THE JOINT SECRETARY, MINISTRY OF COMMERCE & INDUSTRY WH EREIN A DISTINCTION HAS BEEN DRAWN BETWEEN THE PROVISIONS OF SEC. 10A AND 10B OF THE ACT AND IN WHICH IT HAS BEEN CLARIFIED THAT A UNIT APPROVED BY THE DIRECTOR OF THE SOFTWARE TECHNOLOGY PARKS SCHEME WILL BE ALLOWED EXEMPTION ONLY U/S. 10A AS A STPI UNIT AND NOT U/S. 10B AS A 100% EOU. IT IS, THEREFORE, CLEAR FROM THE ABOVE I NSTRUCTION AND COMMUNICATIONS THAT THE VIEW OF THE CBDT IS THAT APPROVALS GRANTED BY THE DIRECTOR OF SOFTWARE TECHNOLOGY PARKS OF INDIA WOULD BE DEEMED TO BE VAL ID ONLY THE SAID DIRECTORS WERE FUNCTIONING IN THE DELEGATED AUTHORITY OF THE INTER -MINISTERIAL STANDING COMMITTEE. 11 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 13. IT IS, THEREFORE, CLEAR THAT THE ASSESSEE WOULD BE ENTITLED TO THE DEDUCTION OF CLAIM U/S. 10A OF THE ACT INASMUCH AS APPROVAL GRAN TED BY THE DIRECTORS OF THE SOFTWARE TECHNOLOGY PARK OF INDIA WOULD BE A DEEMED APPROVAL OF THE INTER- MINISTERIAL STANDING COMMITTEE AND, THEREFORE THE C ONDITIONS STIPULATED U/S. 10A(2) OF THE SAID ACT WOULD STAND COMPLIED WITH. THUS, W E NOTE THAT IN PARA 7 (SUPRA) THE STPI VIDE LETTER DATED 26.09.2011 HAS REPLIED AS UN DER: 12 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 14. FROM A PERUSAL OF THE ABOVE LETTER WHICH IS SEL F-EXPLANATORY THAT THE ASSESSEE PROPRIETORSHIP UNIT M/S. E-KNOWLEDGE MARKETING HAD APPLIED FOR REGISTRATION UNDER THE STP SCHEME AND WAS GRANTED APPROVAL AS 100% EOU UND ER THE STP SCHEME VIDE LETTER DATED 17.11.2008 AT AE-90, PRAFULLA KANAN, KESTOPUR , KOLKATA-700 101. THE COMMENCEMENT OF THE PRODUCTION WAS TAKEN W.E.F. 17 .11.2008 AND THE UNITED SHIFTED ITS OPERATION TO AB-65, PRAFULL KANON, KRISHNAPUR, KOLK ATA-700 101 WHICH WAS APPROVED/RECORDED IN THE STPI RECORDS ON 29.04.2009 AND SINCE THE DIRECTOR OF THE SOFTWARE TECHNOLOGY PARKS INDIA HAVE THE AUTHORITY OF THE INTER-MINISTERIAL STANDING COMMITTEE AND SINCE ALL THE APPROVALS GRANTED BY TH E STPI DIRECTOR ARE DEEMED TO BE VALID IN THE LIGHT OF THE INTER-MINISTERIAL COMMUNI CATION DATED 23.03.2006 ISSUED BY THE SECRETARY, MINISTRY OF COMMUNICATION AND TECHNOLOGI ES WHICH HAS BEEN TAKEN NOTE BY THE HONBLE HIGH COURT IN THE TELCHNOVATE E SOLUTIO NS (P) LTD. (SUPRA) TO MAKE IT CLEAR THAT THE ASSESSEE WOULD BE ENTITLED TO THE DEDUCTIO N OF CLAIM U/S. 10A OF THE ACT 13 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 INASMUCH AS APPROVAL GRANTED BY THE DIRECTORS OF TH E SOFTWARE TECHNOLOGY PARK OF INDIA WOULD BE A DEEMED APPROVAL OF THE INTER-MINISTERIAL STANDING COMMITTEE AND, THEREFORE THE CONDITIONS STIPULATED U/S. 10A(2) OF THE SAID A CT WOULD STAND COMPLIED WITH. 15. IT IS NOT IN DISPUTE THAT WEBSITE SERVICES H AS BEEN DULY NOTIFIED AS IT ENABLED SERVICES AND THEREBY ELIGIBLE FOR DEDUCTION FOR 10 0% EXPORT ORIENTED UNIT CONTEMPLATED U/S. 10A OF THE ACT. 16. WE FIND THAT THE ASSESSEE IS ALSO ENTITLED FOR BENEFIT OF DEDUCTION U/S. 10A OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THO UGH THE ASSESSEE HAD NOT CLAIMED THE SAME UNDER THAT SECTION IN THE RETURN OF INCOME. IN THIS REGARD, WE WOULD LIKE TO PLACE RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH O F THE ITAT MUMBAI IN THE CASE OF ITO VS. ACCENTIA TECHNOLOGIES LIMITED IN ITA NO. 1871/M UM/2011 DATED 08-05-2014 , WHEREIN IT WAS HELD THAT : 6. HAVING REGARD TO THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) CALLED FOR A REMAND REPORT. UPON OBTAINING THE REMAND REPORT HE NOTICED THE FOLLOWING UNDISPUTED FACTS I.E., (A) THERE IS NO DISPUTE REGARDING THE AMOUNT WHICH IS C LAIMED AS EXEMPT UNDER SECTION 10A OF THE ACT, (B) THERE IS NO DISPUTE THAT THE ASSESSEE IS ENTITLED TO CLAIM EXEMPTION UNDER SECTION 10A OF THE ACT AND ALL THE CRITERIA REGARDI NG THE SAID CLAIM HAS BEEN MET BY THE ASSESSEE, AND (C) THERE IS ALSO NO DISPUTE REGARDIN G THE FACT THAT IN THE RETURN OF INCOME THE ASSESSEE CLAIMED DEDUCTION OF THE AMOUNT ADMISS IBLE AS DEDUCTION UNDER SECTION 10A BY MENTIONING IT AS SECTION 10B OF THE ACT. THUS TH E ONLY DISPUTE THAT EXISTS IS WHETHER THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION UNDER SEC TION 10A IS ALLOWABLE IF THE CLAIM WAS MADE UNDER SECTION 10B IN THE RETURN OF INCOME. THE LEARNED CIT(A) OBSERVED THAT SECTION 10A(5) IS APPLICABLE ONLY WHEN THE ASSESSEE FAILS TO MAKE A CLAIM IN HIS RETURN OF INCOME FOR A NY DEDUCTION WHEREAS IN THE INSTANT CASE THE ASSESSEE DID MAKE THE CLAIM THOUGH, BECAUSE OF A TECHNICAL ERROR, THE CLAIM WAS MADE UNDER SECTION 10B INSTEAD OF 10A. IN HIS OPINION, Q UOTING OF WRONG SECTION SHOULD NOT DEPRIVE THE ASSESSEE FROM CLAIMING DEDUCTION SO LON G AS THE OTHER CONDITIONS FOR MAKING SUCH CLAIM ARE SATISFIED. HE RELIED UPON THE CIRCUL AR ISSUED BY THE CBDT DATED 11.04.1955 WHEREIN IT WAS OBSERVED THAT IT IS THE DUTY OF THE AO TO GUIDE THE ASSESSEE WITH REGARD TO ELIGIBILITY TO CLAIM DEDUCTION; IN THE INSTANT CASE WHEN THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10 B THE AO OUGHT TO HAVE GUIDED THE ASSESSEE WITH REGARD TO ELIGIBILITY TO CLAIM DEDUCTION UNDER SECTION 10A OF THE ACT. 17. WE ALSO FIND THAT THE CONTENTS OF AUDIT REPORT IN FORM NO. 56F AND 56G TOGETHER WITH THE COMPUTATION MECHANISM REMAINS THE SAME FOR CLAIMING THE DEDUCTION U/S. 10A/10B OF THE ACT. IT WAS ARGUED ALTERNATIVELY B Y THE LD.AR THAT THE DECISION OF THE AO 14 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 IS TO EDUCATE THE ASSESSEE OF ITS RIGHTS AND ENTITL EMENTS AS PER LAW AND CANNOT TAKE ADVANTAGE OF IGNORANCE OF ASSESSEE. IN THIS REGARD, HE CITED THE RELEVANT EXTRACT OF THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SANCHI S OFTWARE & SOLUTIONS PVT. LTD VS. CIT REPORTED IN (2012) 349 ITR 404 (BO M), WHEREIN IT WAS HELD AS UNDER:- INCOME-TAX DEPARTMENT CANNOT TAKE ADVANTAGE OF THE ASSESSEES MISTAKES IN NOT CLAIMING THE EXEMPTION IN THE INCOME-TAX RETURN AN D NOT DENY HIM EXEMPTION. THE ENTIRE OBJECT OF ADMINISTRATION OF TAX IS TO SECURE THE REVENUE FOR THE DEVELOPMENT OF THE COUNTRY AND NOT TO CHARGE THE ASSESSEE MORE TAX THA N THAT WHICH IS DUE AND PAYABLE BY THE ASSESSEE. 18. WE FIND THAT THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. INDIA CAPACITORS LTD REPORTED IN 180 ITR 6 41 ALSO SUPPORTS THIS PROPOSITION. WE FURTHER FIND THAT THE ALTERNATIVE ARGUMENT OF THE LD.AR HAS GOT LOT OF FORCE AS IT MAY BE APPRECIATED THAT THERE WAS NO MALA FIDE INTENTION ON THE PART OF THE ASSESSEE IN NOT CLAIMING THE DEDUCTION UNDER THE CORRECT SECTION. IN FACT, IT COULD BE APPRECIATED THAT THE ASSESSEE HAD ONLY RUN THE RISKS OF NOT HAVING BEEN ABLE TO AVAIL THE BENEFIT OF JUSTICE AND NOT GAINED ANYTHING BY NOT CLAIMING DEDUCTION UND ER THE CORRECT SECTION. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. MAHALAXMI SUGA R MILLS CO. LTD REPORTED IN (1986) 160 ITR 920(SC) HAS OBSERVED AS UNDER:- 'THERE IS A DUTY CAST ON THE INCOME-TAX OFFICER TO APPLY THE RELEVANT PROVISIONS OF THE INDIAN INCOME-TAX ACT FOR THE PURPOSE OF DETERMININ G THE TRUE FIGURE OF THE ASSESSEE'S TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY_ THAT THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF A SET-OFF CANNOT RELIEVE THE INCOME-TAX OFFICER OF HIS DUTY TO APPLY SECTION 24 IN AN APPROPRIATE CASE.' HENCE, WE FIND THAT THE ABOVE PRINCIPLE HOLDS GOOD AND IN THE EVENT IT HAD BEEN APPLIED, THE ASSESSEE WOULD NOT HAVE BEEN DEPRIVED OF JUSTIC E AND ADMITTING THE CLAIM UNDER CORRECT SECTION . 19. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES AND J UDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM THE BENEFIT OF DEDUCTION UNDER THE PROVISIONS OF SECTION 10A OF THE ACT. HENCE WE FIND NO INFIRMITY IN THE IMPUGNED ORDERS OF THE LD.CIT(A) IN DELETING THE DISALLOWANC E AS MADE BY THE AO ON THIS ISSUE. 15 ITA NO.868/KOL/2015 VIPUL GUPTA, AY- 2010-11 WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A). HEN CE, THE GROUNDS RAISED BY THE DEPARTMENT IN THE APPEAL ARE DISMISSED. 20. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 20TH MARC H, 2019 SD/- ` SD/- (P. M. JAGTAP) (ABY. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER DATED : 20TH MARCH, 2019 JD.(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT ITO, WARD-43(3), KOLKATA 2 RESPONDENT SHRI VIPUL GUPTA, DEEP APARTMENTS, A G-2, HANAPARA, KRISHNAPUR, KOLKATA-700 102. . 3. 4. CIT(A)-13, KOLKATA (SENT THROUGH E-MAIL) CIT- , KOLKATA. 5. DR, ITAT, KOLKATA. (SENT THROUGH E-MAIL) / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR