M/S.IBS SOFTWARE SERVICES P. LTD,TRIVANDRUM V. THE ACIT, TRIVANDRUM

SA 26/COCH/2018

AI Insights

The case involves M/s. IBS Software Services Private Limited appealing against the orders of the lower tax authorities regarding the rejection of their deduction claims under sections 10A and 10AA for the assessment year 2008-2009. The Tribunal noted that similar issues had been previously addressed in the assessee's favor in earlier years and by the jurisdictional High Court. The Tribunal decided to restore the matter back to the Assessing Officer for a fresh examination of the claims, emphasizing the need for judicial consistency and proper adjudication based on the facts presented.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471733 (ITAT-COCHIN)
• Duration Of Justice: 6 year(s) 5 month(s) 22 day(s)
• Appeal Type: Others
• Pronouncement Date: 07-11-2024
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-12-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2018
• Other Referred Cases: ITA. Nos. 855 to 857/ Coch./2001, ITA.No.847/Coch./2007, ITA.No.415/2009
• Laws Referred To: Income Tax Act, 1971
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S. PANDIAN
• Assessee Lawyers: RAJAKANNAN
• Keywords: Earning of tax free income; Rule 8D; Application of stay

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH : COCHIN BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA.No.380/COCH./2016 ALONG WITH Stay Application No.26/COCH./2018 Assessment Year 2008-2009 M/s. IBS Software Services Private Limited, 5th Floor, NILA, Technopark Campus, TRIVANDRUM – 695 581. PAN AAACI6825N vs. The ACIT, Circle-1(1), Aayakar Bhavan, Kowdiar, TRIVANDRUM. KERALA. (Appellant) (Respondent) For Assessee : Shri Rajakannan, Advocate For Revenue : Dr. S. Pandian, CIT-DR Date of Hearing : 21.08.2024 Date of Pronouncement : 07.11.2024 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal ITA.No.380/COCH./2016 along with stay application S.A.No.26/COCH./2018, for assessment year 2008-2009, arise against the order of the learned CIT(A), 2 ITA.No.380/Coch./2016 & SA.26/Coch./2018 Trivandrum in appeal ITA.No.4/TVM/CIT(A),TVM/2015-16, dated 12.07.2016, in proceedings u/sec.143(3) r.w.s.144A of the Income Tax Act, 1971 (in short the \"Act\") Heard both the parties. Case files perused. 2. The assessee pleads the following substantive grounds in the instant appeal : 3 ITA.No.380/Coch./2016 & SA.26/Coch./2018 4 ITA.No.380/Coch./2016 & SA.26/Coch./2018 3. Suffice to say, the assessee’s first and foremost substantive ground seeks to raise sec.10A deduction claim which has been rejected by both the learned lower authorities. It emerges during the course of hearing that the instant first and foremost issue is no more res integra keeping in mind the fact tha this tribunal’s earlier learned coordinate bench; dealing with the assessee’s appeals itself ITA. Nos. 855 to 857/ Coch./2001 and ITA.No.847/Coch./2007 for the assessment years 2000-2001 to 5 ITA.No.380/Coch./2016 & SA.26/Coch./2018 2004-2005, had partly accepted the same for statistical purposes; which in turn, stands upheld in hon’ble jurisdictional high court’s judgment dated 20.07.2018 in assessee’s Tax Appeals arising therefrom ITA.No.415/2009; reading as under : 6 ITA.No.380/Coch./2016 & SA.26/Coch./2018 7 ITA.No.380/Coch./2016 & SA.26/Coch./2018 8 ITA.No.380/Coch./2016 & SA.26/Coch./2018 9 ITA.No.380/Coch./2016 & SA.26/Coch./2018 4. It is in this factual backdrop that we adopt judicial consistency in absence of any distinction pinpointed so far as the assessee’s impugned sec.10A deduction and direct the learned Assessing Officer to re-adjudicate the assessee’s instant first and foremost substantive grounds in very terms. Ordered accordingly. 5. Next comes the assessee’s second substantive ground that both the learned lower authorities ought not to have rejected it’s sec.10AA deduction claim raised for the first time in the impugned assessment year i.e., A.Y. 2008-2009. 6. Learned DR invited our attention to para-5 page-10 of the CIT(A)’s lower appellate discussion that the latter has 10 ITA.No.380/Coch./2016 & SA.26/Coch./2018 affirmed the assessment findings once the assessee had not placed on record the cogent supportive material. 7. Learned counsel’s case on the other hand is that assessee had raised the impugned deduction claim u/sec.10AA of the Act for the first time qua a new undertaking and also placed on record the relevant facts before the lower appellate authority. He further refers to assessee’s pleadings in ground no.4 in this regard. Coupled with this, learned counsel has filed three paper books as well in support of the assessee’s sec.10AA deduction claim. Faced with this situation, we deem it appropriate in the larger interest of justice to restore the assessee’s second substantive ground back to the Assessing Officer for his afresh adjudication, preferably within three effective opportunities of hearing, subject to the rider that it shall be the taxpayer’s onus and responsibility only to plead and prove all the relevant facts in consequential proceedings. Ordered accordingly. 8. Lastly comes sec.14A read with Rule 8D disallowance of Rs.10,54,082/- made in the course of assessment and upheld in the lower appellate discussion. Learned counsel inter alia submits that not only the assessee had derived it’s exempt income from investments made in foreign subsidiaries which is taxable but also investments 11 ITA.No.380/Coch./2016 & SA.26/Coch./2018 considered in computing the disallowances herein have not been restricted only qua those which have actually yielded exempt income in the relevant previous year. The Revenue’s case in light of these circumstances once we are restoring the assessee’s former twin substantive grounds to the Assessing Officer; this last issue may also follow the suit. We accordingly allow the ground of the assessee for statistical purposes in very terms. Ordered accordingly. 9. This assessee’s appeal ITA.No.380/Coch./2016 is allowed for statistical purposes in above terms. It’s stay application S.A.No.26/Coch./2018 stands rendered academic and dismissed. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 07.11. 2024. Sd/- Sd/- [AMARJIT SINGH] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin, Dated 7th November, 2024 VBP/- 12 ITA.No.380/Coch./2016 & SA.26/Coch./2018 Copy to 1. The appellant 2. The respondent 3. The CIT concerned 4. The D.R. ITAT, Cochin Bench, Cochin. 5. Guard File. //By Order// //True copy// Sr. Private Secretary, ITAT, Cochin Bench, Cochin "