Appeal details
Counselvise Citation
[2024] 101 COUNSELVISE.COM (IT) 7728 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
9 year(s) 2 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
22-04-2024
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
G
Next Hearing Date
25-03-2024
Assessment Year
2011-2012
Appeal Filed On
10-02-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 7067/Mum/2014 ( Assessment Year: 2010-11) ITA No. 954/Mum/2015 ( Assessment Year: 2011-12) Wipro Technology Services Limited (Not merged with Wipro Limited) Doddakannelli, Sarajpur Road, Bangalore-560035 Vs. The Dy. Commissioner of Income Tax-9(3) Room No. 229, Aaykar Bhavan M.K. Road, Mumbai-400 020 (Appellant) ( Respondent) PAN No. AAACW0387R ITA No. 295/Mum/2015 ( Assessment Year: 2011-12) ITA No. 5990/Mum/2014 ( Assessment Year: 2010-11) The Dy. Commissioner of Income Tax-9(3) Room No. 229, Aaykar Bhavan M.K. Road, Mumbai-400 020 Vs. Wipro Technology Services Limited (Not merged with Wipro Limited) Doddakannelli, Sarajpur Road, Bangalore-560035 (Appellant) ( Respondent) Assessee by : S hri S an de e p H uil go l, AR Revenue by : S hri D r. Kis hor d hul e, C IT DR Date of hearing: 26.0 3.2 024 Date of pronouncement : 23.0 4.2 024 O R D E R Page | 2 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 PER BENCH: 01. These are the four cross appeals filed for the A.Y. 2010-11 and 2011-12 on similar grounds and therefore, disposed off by this common order. 02. ITA No. 5990/Mum/2014 is filed by the Asst. Commissioner of Income Tax-9(3), Mumbai, against the appellate order passed by the Commissioner of Income-tax (Appeals)-20, Mumbai, [the learned CIT (A)] dated 4 th July, 2014, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) of the Income-tax Act, 1961 (the Act) by the Dy. Commissioner of Income Tax, 9(3), Mumbai, was partly allowed. Therefore, the learned Assessing Officer is in appeal against granting of the deduction under Section 10A of the Income-tax Act, 1961 (the Act) to the assessee of ₹148,52,41,440/- under Section 10A of the Act. 03. The assessee is aggrieved in ITA No.7067/Mum/2014 against the appellate order wherein the disallowance under Section 14A of the Act read with Rule 8D of the Rules was confirmed of ₹14,93,226/-. 04. For A.Y. 2011-12, the learned Assessing Officer is aggrieved by the appellate order passed by the learned CIT (A)-20, Mumbai dated 16 th October, 2014, wherein the appeal filed by the assessee against the assessment order passed under Section 143(3) of the Act by the learned Assessing Officer dated 20 th March, 2014, was also partly allowed. The learned Page | 3 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 Assessing Officer is aggrieved with the deletion of the disallowance of deduction of ₹135,05,50,058/- under Section 10A of the Act and further, assessee is aggrieved by confirmation of the disallowance under Section 14A of the Act of ₹45,23,187/-. 05. The fact and circumstances for both the years are almost similar. 06. For A.Y. 2010-11, the assessee filed its return of income on 15 th October, 2010, at a total income of ₹18,08,52,618/- after claiming deduction under Section 10A of the Act of ₹148,52,41,440/-. This return was selected for scrutiny. The learned Assessing Officer found that assessee is engaged in providing software related support and services primarily information technology software solutions, maintenance and technology infrastructure support services to other City Group Companies. Earlier the assessee was known as City Technology Services Ltd. The learned Assessing Officer found that assessee has claimed deduction under Section 10A of the Act and further identical deduction is disallowed in earlier years by the learned Assessing Officer, therefore, for similar reasons as held in earlier years, he disallowed the deduction under Section 10A of the Act. It was further found that assessee has received dividend from Mutual Fund of ₹262,81,268/-, which claimed as an exempt income. The assessee was asked to furnish the details of expenses incurred for earning the exempt income. The assessee replied on 20 th March, 2013, that assessee has not incurred any expenditure for earning of exempt income. It was further Page | 4 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 stated that investment in tax free income earning securities is purchased out of own funds. It further claimed that it has not incurred any administrative expenses also. However, without prejudice assessee submitted that on the basis of time spent by the staff for making investment related decision a total sum of ₹202,64,460/- could be disallowed. The learned Assessing Officer rejected the explanation of the assessee and computed the disallowance of ₹14,93,226/- under Rule 8D (2)(iii) being 0.5% of average value of investment of ₹29,86,45,130/-. Accordingly, the total income of the assessee was computed at ₹166,75,87,284/-. 07. The assessee aggrieved with the assessment order preferred the appeal before the First Appellate Authority (FAA), who deleted the disallowance under Section 10A of the Act by following earlier year decisions deleting the similar disallowances by the learned CIT (A). As per the disallowance under Section 14A of the Act, the learned CIT (A) confirmed the expenditure disallowance of ₹14,93,226/-. Accordingly, the appeal of the assessee was partly allowed. 08. Coming to the appeal of the learned Assessing Officer against disallowance of deduction under Section 10A of the Act deleted by the learned CIT (A). The learned counsel submitted that for A.Y. 2007-08, ITA No.3554/Mum/2012, and for A.Y. 2009-10 in ITA No.5477/Mum/2014, dated 3 rd February, 2021, and 1 st April, 2021, respectively covers the whole issue of deduction under Section 10A of the Act. The learned CIT (A) relied upon the order of his predecessor has been upheld by Page | 5 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 the co-ordinate Benches. Therefore, the issue is squarely covered in favour of the assessee. 09. The learned Departmental Representative submitted that assessee is not eligible for deduction under Section 10A of the Act on the facts and circumstances and the learned Assessing Officer has correctly disallowed the same. 010. We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that identical issue arose and in case of the assessee for A.Y. 2007-08, wherein the co-ordinate Bench in ITA No.3554/Mum/2012, vide order dated 3 rd February, 2021, and for A.Y. 2009-10, in ITA No.5477/Mum/2014, dated 1 st April, 2021 has decided the issue in favour of the assessee. 011. No changes in the facts are put to our notice. Therefore, respectfully following the decision of the co-ordinate benches in assessee’s own case, we do not find any infirmity in the order of the learned CIT (A) in deleting the disallowance under Section 10A of the Act of ₹148,52,41,440/-. Accordingly, we dismiss the appeal of the learned Assessing Officer for A.Y. 2010-11 in ITA No.5990/Mum/2014. 012. ITA No.2995/Mum/2014, filed by the learned Assessing Officer is also involving the same ground against the deletion of disallowance under Section 10A of the Act of ₹135,05,50,058/- . In absence of any change in the facts and circumstances, we respectively following the decision of the co-ordinate Bench as stated above confirmed the order of the learned CIT (A) and dismiss the appeal of the learned Assessing Officer. Page | 6 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 013. Coming to the appeal of the assessee for A.Y. 2010-11, wherein the disallowance under Section 14A of the Act of ₹14,93,226/- for A.Y. 2011-12, disallowance of ₹45,23,187/- is confirmed. The learned Authorized Representative submitted that though assessee has not incurred any direct expenditure in relation to the earning of the exempt income during the previous years, however assessee itself has identified the salary and other indirect expenditure of its internal divisions in respect of which exempt income is earned. It was stated that assessee has given a reasonable and query portion of such indirect cost in relation to exempt income. He submitted that for A.Y. 2010-11, the assessee has given the working of ₹264,460/- and for A.Y. 2011-12, ₹2,83,160/-. The learned Assessing Officer has not accepted this. He submitted that in case of the assessee for A.Y. 2009-10, ITAT directed the learned Assessing Officer to consider the method adopted by the assessee and computed the disallowance. He submits that in the order giving effect with respect to all those years and the learned Assessing Officer has accepted the disallowance offered by the assessee. He therefore submitted that this issue is squarely covered in favour of the assessee. He referred to paragraph no.22.4 of the order of the co-ordinate Bench dated 5 th October, 2020, and also the order giving effect for A.Y. 2010-11 to 2013-14 and 2014-15. 014. The learned Departmental Representative vehemently submitted that when the assessee himself says that he has incurred expenditure, the explanation submitted by the Page | 7 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 assessee is not correct. If same is not correct then only option left is to apply the provision of Rule 8D. 015. We have carefully considered the rival contentions and perused the orders of the lower authorities. We have also perused the orders of the co-ordinate Bench in assessee’s own case for earlier years. We find that for A.Y. 2010-11, the assessee has earned exempt income of ₹22,81,268/- and for A.Y. 2011-12, exempt income is ₹10,49,29,845/-. The assessee has not offered any disallowance under Section 14A of the Act. On question, the assessee submitted that it has not incurred any expenditure for earning exempt income. However, the assessee submitted calculation on time basis which can be considered on indirect expenditure for earning exempt income. The assessee gave computation of ₹2,64,460/- and ₹2,83,159/- for disallowance under Section 14A of the Act. Similar disallowances were offered by the assessee for earlier years. The co-ordinate Bench in assessee’s own case set aside the issue back to the file of the learned Assessing Officer to examine the claim of the assessee by incurring this expenditure for earning exempt income. In the order giving effect orders passed by the learned Assessing Officer he found that the disallowance offered by the assessee is adequate. Therefore, respectfully following the decision of the co-ordinate Bench in ITA No.99/Bangalore/2014, for A.Y. 2009-10, wherein the identical issue for A.Y. 2009-10 to 2014-15, was sent back. Therefore, with similar direction, we restore the issue back to the file of the learned Assessing Officer to examine the claim of the Page | 8 ITA Nos. 954, 295/Mum/2015, 7067, 5990/Mum/2014 Wipro Technology Services Ltd; A.Y. 10-11 & 11-12 assessee and decide the issue afresh. Accordingly, both the appeals of the assessee for A.Ys. 2010-11 and 2011-12 are allowed for statistical purposes. 016. Accordingly, all the four appeals are disposed off by this common order. Order pronounced in the open court on 23.04.2024. Sd/- Sd/- (MS. KAVITHA RAJAGOPAL) (PRASHANT MAHARISHI) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Mumbai, Dated: 23.04.2024 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai
