M/s Infosage Systems (India) Private Limited, Hyderabad V. DC IT, Hyderabad

ITA 952/HYD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 9902 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 24-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINIVAS
• Assessee Lawyers: V RAGHAVENDRA RAO
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI AKBER BASHA, ACCOUNTANT MEMEBR ITA NO.952/HYD/10 : ASSESSMENT YEAR 2007- 08 M/S. INFOSAGE SYSTEMS (INDIA ) PVT. LTD., HYDERABAD. ( PAN AABCI 2980 D) V/S. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 2(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V. RAGHAVENDRA RAO RESPONDENT BY : SHRI SRINIVAS O R D E R PER G.C.GUPTA, VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE, FOR THE ASSESSMENT YEAR 2007- 08, IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER O F INCOME- TAX(APPEALS). 2. GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UNDER- '1. THE LEARNED COM MISSIONER OF INCOME-TAX(APPEALS) III (CIT(A) FOR SHORT) HAS ERRED ON FACTS AND IN LAW WH ILE DISPOSING OF THE APPEAL. 2(A) THE LEARNED CIT(A) IS NOT JUSTIFIED IN DENYIN G THE EXEMPTION IN RESPECT OF EXPORT PROFITS OF RS.2,86,4 4,156/- U/S. 10A(2)(I)(B) OF THE IT ACT. (B) THE LEARNED CIT(A) IS NOT JUSTIFIED IN DENYI NG SUBSTANTIAL JUSTICE BY RELYING UPON TECHNICALITIES. 3(A) THE LEARNED CIT(A) IS NOT JUSTIFIED IN HOLD ING THE ASSESSEE TO THE CLAIM INADVERTENTLY STATED AS U/S. 10B OF T HE IT ACT ITA NO.952/HYD/10 M/S. INFOSAGE SYSTEMS (INDIA ) PVT. LTD., HYD. 2 INSTEAD OF U/S. 10A WHICH IS THE APPLICABLE SECTION , THEREBY DENYING THE EXEMPTION ON EXPORT PROFITS. (B) THE LEARNED CIT(A) IS NOT JUSTIFIED IN IGNORIN G THE FACT NOTICED BY THE ASSESSING OFFICER IN HER ORDER THAT THE ASSESSEE HAD APPROVAL UNDER THE SOFTWARE TECHNOLOGY PARK SCHEME WHICH WAS GRANTED BY DIRECTOR STPI HYDERABAD . THE ASSESSEE IS ENTITLED TO EXEMPTION U/S. 10A OF THE I T ACT BY THE REASON OF THE APPROVAL. SECTION 10B SHOULD NOT HAVE BEEN APPLIED ONLY BECAUSE THE ASSESSEE CITED THAT S ECTION WRONGLY. 4. THE LEARNED CIT(A) HAS ERRED IN NOT ENTERTAININ G THE CLAIM OF EXEMPTION U/S. 10A OF THE IT ACT IGNORING OF TH E DECISION OF THE AP HIGH COURT IN THE CASE OF CIT V/S. GANGAP PA CABLES PRIVATE LIMITED (116 ITR 781) BROUGHT TO HIS NOTICE. 5(A) THE LEARNED CIT(A) FAILED TO DEAL WITH THE CL AIM SPECIFICALLY MADE U/S. 10A OF THE IT ACT IN THE ORIGINAL GROUNDS OF APPEAL. (B) AT ANY RATE, THE LEARNED CIT(A) IS NOT JUSTIFI ED IN REJECTING THE ADDITIONAL GROUND RAISED BY THE ASSESSEE WHICH GOES TO THE ROOT OF THE MATTER.' 3. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DUE TO TECHNICAL MISTAKE ON ITS PART, THE ASSESSEE CLAIMED DEDUCTION UNDER S.10B OF THE INCOME-TAX ACT, ALTHOUGH THE DEDUCTION W AS ALLOWABLE UNDER S.10A TO THE ASSESSEE, AND THEREBY THE ASSESSING OFFICER HA S DENIED THE EXEMPTION ON EXPORT PROFIT ALLOWABLE TO IT. HE SUBMIT TED THAT THE ASSESSEE HAS TAKEN A SPECIFIC ADDITIONAL GROUND OF APPEAL B EFORE THE CIT(A), AND THE SAME WAS HOWEVER NOT ADMITTED BY THE CIT(A), FOR NO VALID REASON. HE ALSO RELIED ON THE DECISION OF THE HYDE RABAD BENCH OF THE TRIBUNAL DATED 30TH OCTOBER, 2009 IN THE CASE OF SMT. K.SUDHA RANI, IN ITA NO.1750/HYD/2008 FOR ASSESSMENT YEAR 2005-06 IN SU PPORT OF HIS ARGUMENTS. 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT THE ISSUE IS NOT THAT SIMPLE AS HAS BEEN PROJECTED ON BEHALF O F THE ASSESSEE. HE SUBMITTED THAT IT IS NOT CASE WHERE A WRONG SECTION HA S BEEN CITED IN ITA NO.952/HYD/10 M/S. INFOSAGE SYSTEMS (INDIA ) PVT. LTD., HYD. 3 SUPPORT OF THE CLAIM FOR DEDUCTION MADE BY THE ASSESSEE. HE SUBMITTED THAT THE CONDITIONS FOR THE ALLOWANCE OF DEDUCTION UNDE R S.10A AND UNDER S.10B ARE SUBSTANTIALLY DIFFERENT AND DIFFERENT AUTHO RITIES HAVE BEEN GIVEN JURISDICTION TO GIVE APPROVAL SO AS TO ENTITLE THE ASSESSE E FOR DEDUCTION UNDER A PARTICULAR SECTION. HE SUBMITTED THAT THE ISSUE O F DEDUCTION IN THE CASE OF THE ASSESSEE IS COVERED IN FAVOUR OF THE REVENUE W ITH THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN INFOTECH ENT ERPRISES LTD. V/S. JCIT (85 ITD 325). HE SUBMITTED THAT THE ADDITIONAL G ROUND OF APPEAL RAISED BY THE ASSESSEE WAS RIGHTLY REJECTED BY THE CIT(A), AND IT HAS BEEN RECORDED BY THE CIT(A) IN HIS APPELLATE ORDER THAT T HE ASSESSEE HAS NOT BEEN ABLE TO PUT FORTH ANY GOOD REASON FOR NOT RAISI NG SUCH GROUND IN THE ORIGINAL APPEAL MEMO. HE RELIED ON THE ORDERS OF TH E ASSESSING OFFICER AND THE CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND T HAT THE ASSESSEE HAS RAISED THE FOLLOWING ADDITIONAL GROUND OF AP PEAL BEFORE THE CIT(A), WHICH IS REPRODUCED HEREUNDER- 'ALTERNATIVELY, EVEN THOUGH EXEM PTION U/S. 10A HAS NOT BEEN CLAIMED, AS ALL THE RELEVANT PARTICULARS HAVE BEEN FURNISHED IN THE RETURN AND IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S. 10A OF THE I.T. ACT, THE ASSESSING OFFICER SHOULD HAVE ACCORDINGLY GRANTED THE EXEMPTI ON.' WE FIND THAT THE ISSUE RAISED BY THE ASSESSEE IN THIS A DDITIONAL GROUND OF APPEAL GOES TO THE ROOT OF THE MATTER AND SHOULD HAVE BEEN ADMITTED BY THE CIT(A). THE CASE OF THE ASSESSEE IS THAT IT HAS COMMIT TED A TECHNICAL MISTAKE IN CLAIMING THE DEDUCTION UNDER S.10B OF THE A CT, ALTHOUGH IT IS ELIGIBLE TO THE DEDUCTION UNDER S.10A OF THE ACT, AN D THAT ALL THE RELEVANT PARTICULARS ARE ALREADY IN THE RECORD, AS THEY WERE FUR NISHED ALONGWITH THE RETURN OF INCOME FILED AND ALSO DURING THE COURSE O F ASSESSMENT PROCEEDINGS. THE CIT(A) HAS NOT CONTRADICTED THIS CLAIM OF THE ASSESSEE ITA NO.952/HYD/10 M/S. INFOSAGE SYSTEMS (INDIA ) PVT. LTD., HYD. 4 AND HAS REFUSED THE ADMIT THE ADDITIONAL GROUND OF A PPEAL BY OBSERVING THAT THE ASSESSEE WAS NOT ABLE TO PUT FORTH ANY GOOD REA SON FOR OMISSION OF SUCH GROUND OF APPEAL IN THE ORIGINAL APPEAL MEMO. WE ARE UNABLE TO SUSTAIN THE REASONING OF THE CIT(A) FOR REJECTING THE A DDITIONAL GROUND RAISED BY THE ASSESSEE. ALTHOUGH THE CONDITIONS FOR ALLOWA NCE OF DEDUCTION UNDER S.10A AND UNDER S.10B ARE DIFFERENT, THE ISSUE OF ALLOWANCE OF DEDUCTION UNDER S.10A HAS NOT BEEN CONSIDE RED AND ADJUDICATED UPON BY ANY OF THE REVENUE AUTHORITIES. IN THESE FACTS OF THE CASE, WE ARE OF CONSIDERED OPINION THAT IT SHALL BE IN T HE INTERESTS OF JUSTICE TO SET ASIDE THE ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECI DE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORT UNITY TO THE ASSESSEE, AND ALSO TO GIVE A SPECIFIC FINDING WHETHER THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER S.10A OF THE ACT OR NOT. THE ASSESSEE MAY FILE ANY EVIDENCE IN SUPPORT OF ITS CLAIM FOR DEDUCTION BEF ORE THE ASSESSING OFFICER. WE MAKE IT CLEAR THAT OUR OBSERVATIONS HEREIN ABOVE SHALL NOT HAVE ANY BEARING ON THE DECISION OF THE ASSESSING OFFICER WITH REGARD TO THE MERITS OF THE CLAIM OF THE ASSESSEE FOR DEDUCTION UND ER S.10A OF THE ACT. WE DIRECT ACCORDINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 13.1.2011 SD/- SD/- (AKBER BASHA) (G.C.GUPTA) ACCOUNTANT MEMBER VICE PRESIDENT DT/- 13 TH JANUARY, 2011 ITA NO.952/HYD/10 M/S. INFOSAGE SYSTEMS (INDIA ) PVT. LTD., HYD. 5 COPY FORWARDED TO: 1. M/S. INFOSAGE SYSTEMS (INDIA ) PVT. LTD., 6-3-663/ B, II FLOOR, MRL HOUSE, BEHIND TOPAZ BUILDING, PANJAGUTTA, HYDERABA D. 2. DY. COMMISSIONER OF INCOME-TAX, CIRCLE 2(1), HYDERA BAD 3. COMMISSIONER OF INCOME-TAX(APPEALS) III, HYDERABAD . 4. COMMISSIONER OF INCOME-TAX II, HYDERABAD 5. THE DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S .