PRAXIS INTERACTIVE SERVICES P.LTD, MUMBAI V. ITO 10(3)(4), MUMBAI

MA 36/MUM/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 1823 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 19-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R KAVITHUDR
• Assessee Lawyers: RUSHAB MEHTA
• Keywords: Depreciation; Opportunity of being heard; Unabsorbed depreciation
• Section: 10AA

Judgement Text

C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI JOGINDER SINGH, VICE PRESIDENT AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER MA NO. 36/MUM/2018 ARISING OUT OF ITA NO. 4637/MUM/2015 ASSESSMENT YEAR 2011 - 12 ITO - 10(3)(4) ROOM NO. 554, AAYAKAR BHAWAN MUMBAI - 400020 V. PRAXIS INTERACTIVE SERVICES PRIVATE LIMITED , 607/608, MULTI STORIED BUILDING SEEPZ, ANDHERI(E) MUMBAI 400096 PAN AA ECP5196M APPLICANT RESPONDENT APPELLANT BY SHRI RUSHAB MEHTA RESPONDENT BY SHRI R.KAVITHU(DR) DATE OF HEARING : 31 - 08 - 2018 DATE OF PRONOUNCEMENT : 22 - 1 1 - 2018 ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATION IN MA NO. 36/MUM/2018 FOR ASSESSMENT YEAR 2011 - 12 , SEEKING EITHER GRANT OF RELIEF BY WAY OF CARRY FORWARD OF LOSSES WITHOUT SETTING IT OFF AGAINST THE INCOME ELIGIBLE FOR DEDUCTION U/S 10AA OF THE I NCOME - TAX ACT,1961 OR IN ALTERNATIVE TO RECALL THE ORDER OF THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI IN ITA NO. 4637/MUM/2015 PASSED FOR ASSESSMENT YEAR 2011 - 12 SO FAR AS GROUND NUMBER 2 RAISED BY REVENUE IN ITA NO. 4637/MUM/2018 , WHICH WAS SET ASIDE BY TRIBUNAL VIDE ORDERS DATED 12.07.2017 TO THE FILE OF LEARNED ASSESSING OFFICER FOR DENOVO RE - ADJUDICATE THE ISSUE IN THE LIGHT OF NEWLY INSERTED EXPLANATION IN SECTION 10AA(1) BY FINANCE ACT,2017 . IT IS POINTED OUT BY LEARNED COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2010 - 11 VIDE ORDERS DATED 15.02.2017 HAS HELD THAT DEDUCTION U/S 10AA HAS TO BE ALLOWED BEFORE COMPUTING THE BROUGHT FORWARD BUSINESS MA NO. 36/MUM/2018 ARISING OUT OF ITA NO. 4637/MUM/2015 2 LOSSES AND UNABSORBED DEPRECIATION, BY FOLLOWING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. BLACK AND VEATCH CONSULTING PRIVATE LIMITED REPORTED IN (2012) 20 TAXMANN.COM 727(BOM.)/ (2012) 348 ITR 72(BOM.) AND DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. YOKOGAWA INDIA LIMITED RENDERED ON 19.12.2 016 ( (2017) 391 ITR 274(SC). IT WAS SUBMITTED BY LEARNED COUNSEL FOR THE ASSESSEE THAT NO DOUBT THERE WAS AN EXPLANATION INSERTED BY FINANCE ACT, 2017 TO SECTION 10AA(1) BUT THE SAME WAS INSERTED W.E.F. 01.04.2018 AND WAS TO ACCORDINGLY APPLY IN RELATION TO THE ASSESSMENT YEAR 2018 - 19 AND SUBSEQUENT ASSESSMENT YEARS AS SPECIFIED IN NOTES ON CLAUSES TO FINANCE BILL, 2017 . OUR ATTENTION WAS DRAWN TO PAGE 17 OF THE TRIBUNAL ORDER FOR THE IMPUGNED ASSESSMENT YEAR 2011 - 12, DATED 12.07.2017 WHERE IN THE TRIBUNAL RECORDED IN ITS ORDER THAT THE SAID EXPLANATION TO SECTION 10AA(1) WAS INTRODUCED TO RATIONALISE THE PROVISIONS OF SECTION 10AA TO OVERTURN DECISIONS OF THE COURT S AND IS CLARIFICATORY IN NATURE . IT WAS CLAIMED THAT THE ASSESSEE DID NOT GE T AN OPPORTUNITY TO PRESENT ITS CASE BEFORE THE TRIBUNAL ON ITS APPLICABILITY FOR THE IMPUGNED ASSESSMENT YEAR 2011 - 12 WHICH IS PRIOR TO INSERTION OF SAID EXPLANATION AND IT WAS SIMPLY SET ASIDE TO THE FILE OF THE AO TO RE - ADJUDICATE THE ISSUE IN THE LIGHT OF THE NEWLY INSERTED EXPLANATION WHEREIN MORE SPECIFICALLY THAT IT IS SPECIFIED IN FINANCE BILL, 2017 THAT THE SAID EXPLANATION SHALL BE APPLICABLE FROM AY 2018 - 19 AND SUBSEQUENT YEARS , WHICH IS PROVIDED IN NOTES ON CLAUSES TO FINANCE BILL, 2017 . THUS, IT WAS CLAIMED THAT THIS GROUND NO. 2 RAISED BY REVENUE IN ITS APPEAL IN ITA NO. 4637/MUM/2015 BE EITHER ALLOWED OR ORDER OF THE TRIBUNAL BE RECALLED ON THIS GROUND AND THE MATTER MAY PLEASE BE PLACED BEFORE THE REGULAR BENCH AND THE ASSESSEE BE GRANTED AN OPPORTUNITY OF BEING HEARD. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON SEVERAL DECISION OF HONBLE SUPERIOR COURTS TO CONTEND THAT AN OPPORTUNITY BE GRANTED TO THE ASSESSEE TO PRESENT ITS CASE BEFORE THE TRIBUNAL . THE LEARNED DR FAIRLY LEFT THE M ATTER TO THE DISCRETION OF THE BENCH TO TAKE APPROPRIATE DECISION. 2. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE OBSERVED THAT VIDE DECISION OF HONBLE BOMBAY HIGH COURT IN THE MA NO. 36/MUM/2018 ARISING OUT OF ITA NO. 4637/MUM/2015 3 CASE OF CIT V. BLACK AND VEATCH CONSULTIN G PRIVATE LIMITED REPORTED IN (2012) 20 TAXMANN.COM 727(BOM.)/ (2012) 348 ITR 72(BOM.) AND DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V. YOKOGAWA INDIA LIMITED RENDERED ON 19.12.2016 ( (2017) 391 ITR 274(SC), THE ASSESSEE WAS ELIGIBLE TO CARRY FOR WARD OF LOSSES WITHOUT SETTING IT OFF AGAINST THE INCOME ELIGIBLE FOR DEDUCTION U/S 10AA OF THE 1961 ACT. THE TRIBUNAL ALSO HELD IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE AFORESAID DECISIONS , IN ITA NO. 5052/MUM/2012 VIDE ORDERS DATED 15.02.2017 FOR AY 2 006 - 07 . LATER BY FINANCE ACT, 2017 , AN EXPLANATION WAS INSERTED IN SECTION 10AA(1) TO CLARIFY THE LAW AS IT EXISTED IN THE STATUTE THAT AMOUNT OF DEDUCTION UNDER SECTION 10AA SHALL BE ALLOWED FROM THE TOTAL INCOME OF THE ASSESSEE COMPUTED IN ACCORDANCE WI TH THE PROVISIONS OF THE 1961 ACT , BEFORE GIVING EFFECT TO THE PROVISIONS OF THIS SECTION AND THE DEDUCTION U/S 10AA SHALL NOT EXCEED SUCH TOTAL INCOME OF THE ASSESSEE. THIS EXPLANATION WAS SPECIFICALLY INSERTED TO OVERTURN THE IMPACT OF THE HONBLE SUPER IOR COURT S HOLDING TO THE CONTRARY IN FAVOUR OF THE TAX - PAYERS, AS DETAILED ABOVE. BUT WHILE INTRODUCING EXPLANATION, IT IS SPECIFIED THAT IT IS INSERTED TO CLARIFY THE LAW AS IT EXISTED IN STATUTE AND AT THE SAME TIME IT WAS MADE APPLICABLE WITH EFFECT FROM 01.04.2018 TO BE APPLIED FROM AY 2018 - 19 AS DETAILED IN NOTES ON CLAUSES TO FINANCE BILL, 2017 WHICH CERTAINLY REQUIRED DELIBERATIONS . THE ASSESSEE DID NOT GOT AN ADEQUATE OPPORTUNITY TO ARGUE ON THIS ISSUE WHEN THE APPEAL WAS HEARD BEFORE THE TRIBUNA L WHICH CAN BE SEEN FROM PARA 10 OF THE TRIBUNAL ORDER DATED 12.07.2017 AND NO ARGUMENTS TO ITS APPLICABILITY FOR THE IMPUGNED ASSESSMENT YEAR AY 2011 - 12 WAS SPECIFICALLY CONSIDERED BY THE TRIBUNAL , MORE - SO IN THE MIDST OF SPECIFIC APPLICABILITY OF THE SAID NEWLY INSERTED EXPLANATION TO SECTION 10AA(1) FROM AY 2018 - 19 AS MENTIONED IN NOTES ON CLAUSES TO FINANCE BILL, 2017 . THE ASSESSEE DEFINITELY DESERVES DETAILED HEARING ON THIS ASPECT. UNDER THESE CIRCUMSTANCES KEEPING IN VIEW FACTUAL MATRIX OF THE MA BEFORE US, WE ARE RECALLING OUR ORDER IN ITA NO. 4637/MUM/2015 DATED 12.07.2017 SO FAR AS GROUND NUMBER 2 IS CONCERNED. REGISTRY IS DIRECTED TO PLACE THIS MATTER BEFORE REGULAR BENCH FOR FRESH HEARING OF GROUND NO. 2 IN REVENUES APPEAL IN ITA NO. 4637/MUM/2015 FOR AY 2011 - 12 FOR WHICH REGULAR DATE MAY BE GIVEN TO MA NO. 36/MUM/2018 ARISING OUT OF ITA NO. 4637/MUM/2015 4 BOTH THE PARTIES BY REGISTRY . ISSUE NOTICES TO BOTH THE PARTIES. WE ORDER ACCORDINGLY. 3. THUS, THIS M.A. NO. 36 /MUM/201 8 ARISI NG OUT OF APPEAL IN ITA NO. 4637 /MUM/20 15 FOR AY 2011 - 12 FILED BY THE ASSESSEE IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 2 .1 1 .2018 2 2 .11 .2018 S D / - S D / - ( JOGINDER SINGH ) (RAMIT KOCHAR) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 2 2 .1 1 .2018 COPY TO NISHANT VERMA SR. PRIVATE SECRETARY 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI