M/s Msource (I) Pvt Ltd, Bangalore V. Deputy commissioner of income tax., Bangalore

MA 16/BANG/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3407 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-06-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 27-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAHANZEB AKHTAR
• Assessee Lawyers: PADAM CHAND KHIRCHA
• Section: 263

Judgement Text

IN THE INCOME TAX APPELATE TRIBUNAL BANGALORE C BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER M.P.NO.16/BANG/2015 ARISING OUT OF ITA.NO.819/BANG/2013 ASSESSMENT YEAR 2006 - 2007 M/S. MSOURCE (INDIA) P. LIMITED , BANGALORE 0 48 . PAN AAC CM2097G VS. DCIT, CIRCLE 12 (1) BANGALORE (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. PADAM CHAND KHIRCHA FOR REVENUE : MR. JAHANZEB AKHTAR DATE OF HEARING : 2 6 .0 6 .2015 DATE OF PRONOUNCEMENT : 18 .0 9 .2015 ORDER PER SMT. P. MADHAVI DEVI, J.M . THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESSEE UNDER SECTION 254(2) OF THE I.T. ACT, 1961 SEEKING RECTIFICATION OF THE ALLEGED MISTAKES APPARENT FROM THE ORDER OF THIS TRIBUNAL DATED 12.09.2014. 2. IN THE APPLICATION , IT IS STATED BY THE ASSESSEE THAT HE HAD CHALLENGED THE O RDER OF THE CIT PASSED UNDER SECTION 263 OF THE ACT DIRECTING THE A.O. TO RESTRICT THE DEDUCTION UNDER SECTION 10A TO THE EXTENT OF RS. 32,59,19.968 REPRESENTING THE PROFITS AND GAINS OF BUSINESS. IT WAS SUBMITTED THAT THE TRIBUNAL HAS UPHELD THE ORDER OF THE CIT PASSED UNDER SECTION 263 BUT HOWEVER IN THE CLOSING PORTION OF THE PARAGRAPH - 9 OF ITS ORDER , THE TRIBUNAL HAS HELD AS UNDER : 2 M.P.NO.16/BANG/2015 ARISING OUT OF ITA.NO.819/BANG/2013 M/S. MSOURCE (INDIA) P. LIMITED, BANGALORE. (I) IN OUR OPINION ALSO, THE A.O. OUGHT TO HAVE ALLOWED DEDUCTION UNDER SECTION 10A OF THE ACT BEFORE AGGREGATING ALP ADJUST MENT AND THEREAFTER SHOULD HAVE ADDED THE ALP ADJUSTMENT AND COMPUTED THE TAXABLE INCOME. (II) IF THE COMPUTATION IS TO BE MADE AS ABOVE, THEN THE CLAIM OF DEDUCTION UNDER SECTION 10A WOULD HAVE TO BE RESTRICTED TO THE INCOME FROM BUSINESS AVAILABLE BEFORE DE DUCTION U/S.10A I.E., RS.32,59,19,968 AS RIGHTLY OBSERVED BY THE CIT. IN VIEW OF THE SAME, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT U/S.263 OF THE ACT. 2.1 . IT WAS SUBMITTED THAT IN THE FIRST PORTION, THIS TRIBUNAL HAS AGREED THAT DEDUCTION UNDER SECTION 10A OF THE ACT OUGHT TO HAVE BEEN ALLOWED BEFORE AGGREGATING ALP ADJUSTMENT AND IF THIS CONCLUSION IS GIVEN EFFECT TO, THEN THE COMPUTATION TABULATED IN PARAGRAPH - 10 OF THE MISCELLANEOUS PETITION WOULD BE CORRECT. HOWEVER, THE ITAT HAVING CONCURRED WITH THE OBSERVATION OF THE CIT , FURTHER OBSERVING THAT THE A.O. OUGHT TO HAVE RESTRICTED THE DEDUCTION UNDER SECTION 10A TO THE EXTENT OF RS.32,59,19,968, RESULTS IN AN APPARENT MISTAKE IN THE ORDER. THEREFORE, HE PRAYED THAT THE COMPUTA TION OF DEDUCTION UNDER SECTION 10A MAY NOT BE RESTRICTED TO RS.32,59,19,968 AND NECESSARY CONSEQUENTIAL ORDER BE PASSED AFTER CORRECTING THE MISTAKE APPARENT FROM RECORD. 3. THE LEARNED D.R. ON THE OTHER HAND , SUBMITTED THAT THERE WAS NO MISTAKE APPARE NT FROM RECORD WHICH NEEDS RECTIFICATION UNDER SECTION 254(2) OF THE I.T. ACT, 1961. 3 M.P.NO.16/BANG/2015 ARISING OUT OF ITA.NO.819/BANG/2013 M/S. MSOURCE (INDIA) P. LIMITED, BANGALORE. 4 . HAVING R EGAR D TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT IN PARAGRAPH NO.9 OF OUR ORDER DATED 12.09.2014 WE HAVE HELD THAT THE A.O. OUGHT TO H AVE ALLOWED DEDUCTION UNDER SECTION 10A OF THE ACT BEFORE A G G RE GATI NG THE ALP ADJUSTMENT AND THEREAFTER SHOULD HAVE ADDED THE ALP ADJUSTMENT AND COMPUTE D THE TAXABLE INCOME. THE FURTHER DIRECTION TO RESTRICT THE INCOME FROM BUSINESS AVAILABLE BEFORE DEDUCT ION UNDER SECTION 10A AT RS.32,59,19,968 IS A MISTAKE APPARENT FROM RECORD. THEREFORE, WE MODIFY OUR ORDER DATED 12.09.2014 BY DELETING THE FOLLOWING FROM PARAGRAPH NO.9 OF PAGE - 10 OF ITAT ORDER. IF COMPUTATION IS TO BE MADE AS ABOVE, THEN THE CLAIM OF DEDUCTION UNDER SECTION 10A WOULD HAVE TO BE RESTRICTED TO THE INCOME FROM BUSINESS AVAILABLE BEFORE DEDUCTION UNDER SECTION 10A I.E., RS.32,59,19,968 AS RIGHTLY OBSERVED BY THE CIT. 5. TO THE ABOVE EXTENT, OUR ORDER DATED 12.09.2014 IN ITA.NO.819/BA NG/2013 S TANDS MODIFIED. 6. IN THE RESULT, MISCELLANEOUS PETITION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 T H S E P T . , 2 015. SD/ - SD/ - (JASON P. BOAZ) (P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 1 8 T H SEPTEMBER , 2015. VBP/ - 4 M.P.NO.16/BANG/2015 ARISING OUT OF ITA.NO.819/BANG/2013 M/S. MSOURCE (INDIA) P. LIMITED, BANGALORE. COPY TO 1. M/S. MSOURCE (INDIA) P. LIMITED, BAGMANE TECHNOLOGY CENTER, MARATHAHALLO OUTER RING ROAD, DODDANAKHUNDI (V), MAHADEVPURA, BANGALORE 048. 2. THE DCIT, CIRCLE 12 (1), BANGALORE. 3. CIT - III, C.R. BUILDING, 1 ST FLOOR, QUEEN S ROAD, BANGALORE 560 0 01 . 4. ADDL. CIT, RANGE - 12, BANGALORE. 5. D.R. ITAT C BENCH, BANGALORE 6. GUARD FILE