TECHNO TTEACHING INFOSOLUTION PVT. LTD,KOLKATA V. DCIT, CIR. 1(2), KOLKATA

ITA 54/KOL/2024

AI Insights

The case involves Techno Teaching Infosolution Pvt. Ltd., which appealed against the order of the CIT(A) dismissing their appeal for the Assessment Year 2012-13. The AO had disallowed a significant deduction claimed by the assessee, amounting to Rs. 4,11,99,736/-, along with other additions related to TDS, increase of authorized share capital, and unexplained cash credit under section 68 of the Income Tax Act. The assessee contended that the AO and CIT(A) failed to appreciate the nature of their business and the accounting standards followed, particularly in recognizing revenue from software sales and related services. The Tribunal found merit in the assessee's arguments, noting that the AO did not adequately consider the documents and explanations provided by the assessee, leading to the decision to remand the case back to the AO for a thorough re-examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 469701 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; TDS
• Section: 143(2)

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “ए’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. No. 54/Kol/2024 Assessment Year: 2012-13 Techno Teaching Infosolution Pvt. Ltd. (PAN: AADCT 2321 F) Vs. DCIT, Circle-1(2), Kolkata Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 13.02.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 17.03.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Miraj D Shah, A.R For the revenue / राजèव कȧ ओर से Shri Subhro Das, Addl. CIT Sr. D.R ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeal)- NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 20.11.2023 for AY 2012-13. 2. Brief facts of the case of the assessee are that the return of income for AY 2012-13 was filed by the assessee declaring total income at Nil and also filed revised 2 I.T.A. No. 54/Kol/2024 Assessment Year: 2012-13 Techno Teaching Infosolution Pvt. Ltd. return declaring total income Nil. The case of the assessee was selected for scrutiny, notice u/s 143(2) was issued. The case of the assessee was discussed with the A.R of the assessee and after discussion with the AR, an amount of Rs. 4,11,99,736/- has been disallowed and same was added back into the total income of the assessee. The AO has also added an amount of Rs. 6,654/- on TDS, addition of Rs. 1 lacs fee for increase of authorized share capital and further an amount of Rs. 1,04,05,000/- has been added u/s 68 of the Act. 3. Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied the present appeal has been preferred by the assessee before us. 4. The Ld. Counsel of the assessee challenges the very impugned order thereby submitting that the AO did not appreciate the case of the assessee in proper perspective and misconceived the assessee’s claim with that of warranty in support of claim in case of Laptop, TV set etc. The Ld. Counsel further submits that the AO failed to take note of the peculiarity of software business and arbitrarily added back entire claim of deduction of Rs. 4,11,99,736/-. The Ld. Counsel further submits that the AO as well as Ld. CIT(A) was erred in sustaining the addition as it is on the record that the assessee did not realize the entire amount in the year under assessment, rather the assessee received part amount in the year under assessment. The further submission of the Ld. Counsel of the assessee is that substantial amount is still due from the party, due to the dispute and the assessee duly recognized all the revenue cumulatively in the AY 2013- 14 and 2012-13 and 2014-15 which is on record but the AO as well as Ld. CIT(A) did not consider this fact. The Ld. Counsel submits that proper examination has not been done by the AO nor by the Ld. CIT(A) hence his prayer to back to the appeal of the assessee to the file of AO for fresh assessment after proper examination of the case of the assessee by giving an opportunity to the assessee to place entire true facts. The Ld. Counsel draw our attention regarding his paper such as the tax invoices, profit and loss account, balance sheet and financial statement and submits that the company has sold 3 I.T.A. No. 54/Kol/2024 Assessment Year: 2012-13 Techno Teaching Infosolution Pvt. Ltd. Rs. 7,62,24,404/- e-learning software and the AO has mentioned in the assessment order that the assessee company sold software products of Rs. 6,72,08,645/- i.e factually incorrect. 5. The Ld. D.R supports the impugned order. 6. In the light of submission of the assessee, we have perused the case of the assessee and find that the company has sold Rs. 7,62,24,404/- e-learning software with three years product support option and warranty. The Ld. Counsel submits that in the instant case only Rs. 2,60,08,909/- was recognized as revenue as per AS-9 in FY 2011- 12 and the balance amount of Rs. 4,11,99,736/- was recognized in the subsequent year as and when revenue materialized which is duly reflected in the balance sheet of subsequent year. There was no loss of the revenue at all. The ld. Counsel has also submitted a chart with regard to payment receipt which is as follows: Particulars AY 2012-13 2013-14 2014-15 Payment received 55,00,000/- 1,50,53,070/- 38,00,000/- 7. The Ld. Counsel has argued before us that on account of post-sale warranty services provided the assessee company had recognized the same on deferred revenue basis following the accounting standard laid down by ICAI and according to him assessing the same by the AO by all the three subsequent assessment year would lead to double taxation. The main contention of the Ld. A.R is that the AO has made error by addition Rs. 4,11,99,736/- by deferring the accounting principle and revenue recognition method followed by the assessee. 8. Going over the order passed by the Ld. CIT(A) it appears to us that the assessee company was requested to furnish historical data as per the table that was used to create provision to trace the post sale warranty services but the assessee did not provide any information. We further find that on the issue of disallowance of 1,00,000/- is concerned, the Ld. CIT(A) has held that the assessee company did not provide any explanation as 4 I.T.A. No. 54/Kol/2024 Assessment Year: 2012-13 Techno Teaching Infosolution Pvt. Ltd. to why it should be allowed. We further find that the Ld. CIT(A) has upheld the addition u/s 68 of the Act on the ground that the assessee has failed to substantiate the three ingredients i.e. identity, creditworthiness of the share applicant and genuineness of the transaction. Before us the prayer of the Ld. Counsel of the assessee is that the assessee has to be given an opportunity to place his case before the AO. The assessee has sufficient documentary evidence as well as material to satisfy the case regarding his case. Keeping in view the facts of the case as discussed above as well as considering the submission made by the assessee, for the interest of justice, we are inclined to restore the case of the assessee to the file of AO for fresh adjudication after proper verification of the documents and after hearing the assessee. The order passed by the AO confirmed by the CIT(A) is here by set aside, matter is restored to the file of AO for fresh order. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order is pronounced in the open court on 17th March, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 17th March, 2025 SM, Sr. PS 5 I.T.A. No. 54/Kol/2024 Assessment Year: 2012-13 Techno Teaching Infosolution Pvt. Ltd. Copy of the order forwarded to: 1. Appellant- Techno Teaching Infosolution Pvt. Ltd., 1A, Ashutosh Mukherjee Road, Kolkata-700020 2. Respondent – DCIT, Circle-1(2), Kolkata 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "