M/s. Cklear Software Pvt. Ltd., New Delhi v. ITO, New Delhi

ITA 1050/DEL/2016 | 2011-2012
Pronouncement Date: 04-10-2016 | Result: Allowed

Appeal Details

RSA Number 105020114 RSA 2016
Assessee PAN AACCC5051A
Bench Delhi
Appeal Number ITA 1050/DEL/2016
Duration Of Justice 7 month(s) 4 day(s)
Appellant M/s. Cklear Software Pvt. Ltd., New Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 04-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC 3
Tribunal Order Date 04-10-2016
Date Of Final Hearing 15-09-2016
Next Hearing Date 15-09-2016
Assessment Year 2011-2012
Appeal Filed On 29-02-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-3 NEW DELHI BEFORE SHRI H. S. SIDHU JUDICIAL MEMBER I.T.A. NO. 1050/DEL/2016 ASSESSMENT YEAR: 2011-12 M/S CKLEAR SOFTWARE PVT. LTD. VS. ITO WARD-3 (2) IC/13 NEW ROHTAK ROAD NEW DELHI KAROL BAGH NEW DELHI 110 005 (PAN: AACCC5051A) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. RAJESH MALHOTRA CA REVENUE BY : SH. B. RAMAN JANYULU SR. DR DATE OF HEARING ON : 15/09/2016 ORDER PRONOUNCED ON : 04/10/20 16 PER H.S. SIDHU JM ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 16.11.2015 PASSED BY THE LD. CIT(A)-2 NEW DELHI RE LATING TO ASSESSMENT YEAR 2011-12 ON THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT{A} HAS ERRED IN DISMISSING THE APPE AL WITHOUT CONSIDERING THE FACT OF THE CASE OF THE ASS ESSEE. THE ACTION OF AUTHORITY BELOW IS WRONG ILLEGAL MISCONCEIVED UNJUSTIFIED AGAINST THE NATURE OF JU STICE AND BAD AT LAW THEREFORE IT SHOULD BE QUASHED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE AUTHORITIES BELOW HAS ERRED IN DISALLOWING THE CLAIM OF ASSESSEE OF DEDUCTION U/S 1OA OF RS. 25 56 255/- BEING PROVIDED TO A NEWLY ESTABLISHED UNDERTAKING. THE AC TION OF AUTHORITIES IS WRONG ILLEGAL MISCONCEIVED UNJUST IFIED 2 AGAINST THE NATURE OF JUSTICE AND BAD AT LAW THEREF ORE IT SHOULD BE QUASHED. 3. WITHOUT PREJUDICE TO THE GROUND NO. 3 ABOVE REGA RDING THE CLAIM OF DEDUCTION OF ASSESSEE U/S 1OA ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE AUTHOR ITIES BELOW HAS ERRED IN DISMISSING THE PLEAD OF THE ASSE SSEE FOR THE ALTERNATIVE CLAIM FOR DEDUCTION U/S 1OB OF RS. 25 56 255/- JUST IN CASE OF DEDUCTION U/S 1OA IS RE JECTED BY THE AUTHORITIES. THE ACTION OF AUTHORITIES IS WR ONG ILLEGAL MISCONCEIVED UNJUSTIFIED AGAINST THE NAT URE OF JUSTICE AND BAD AT LAW THEREFORE IT SHOULD BE QUAS HED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE AUTHORITIES. BELOW HAVE ERRED IN IMPOSING T HE INTEREST U/S 234B OF THE INCOME TAX ACT. THE ACTION OF AUTHORITIES IS WRONG ILLEGAL MISCONCEIVED UNJUST IFIED AGAINST THE NATURE OF JUSTICE AND BAD AT LAW THEREF ORE IT OUT BE QUASHED. 5. THE APPELLANT CRAVES THE RIGHT TO ADD/ ALTER/ AM END/DELETE ALL OR ANY OF THE GROUND OF APPEAL AT THE TIME OF H EARING. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES HENCE THE SAME ARE NOT REPEATE D HERE FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING LD. COUNSEL OF THE AS SESSEE HAS STATED THAT THE AO HAS DISALLOWED THE EXEMPTION CLAIMED BY THE ASSESSEE U/S. 10A ON THE BASIS OF THE DECISION OF ASSESSMENT YEAR 2007-08 AND THE LD. FIRST APPELLATE AUTHORITY HAS ALSO DISMISS ED THE APPEAL OF THE ASSESSEE BY UPHOLDING THE VIEW OF THE AO. HE FURT HER STATED THAT NOW ON THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASS ESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08 PASSED IN THE CASE OF T HE ASSESSEE THE ITAT HAS ALLOWED THE EXEMPTION CLAIMED BY THE ASSES SEE U/S. 10A OF THE I.T. ACT 1961 IN ITA NO. 2512/DEL/2014 VIDE OR DER DATED 18.8.2016. ASSESSEES COUNSEL HAS ALSO FILED THE C OPY OF THE ORDERS OF THE AO LD. CIT(A) FOR THE ASSESSMENT YEAR 2007-08 AND ALSO ORDER OF THE ITAT PASSED IN ITA NO. 2512/DEL/2014 FOR AY 20 07-08 DATED 3 8.8.2016 IN THE SHAPE OF PAPER BOOK CONTAINING PAGE S 1 TO 45. HE REQUESTED THAT THE APPEAL FILED BY THE ASSESSEE MAY BE ALLOWED. 4. ON THE CONTRARY LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW. 5. I HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE ORDERS PASSED BY THE AUTHORITIES BELOW ALONGWITH TH E ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08 IN WHICH THE REVENUE AUTHORITY HAS DISALLOWED THE EXEMPTION CLAIMED BY T HE ASSESSEE U/S. 10A OF THE I.T. ACT AND THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY DATED 25.2.2014 IN APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08 AS WELL AS THE ORDER OF THE ITAT B B ENCH NEW DELHI DATED 18.8.2016 PASSED IN ITA NO. 2512/DEL/2014 FOR AY 2007-08 IN THE CASE OF THE ASSESSEE WHEREIN THE TRIBUNAL HAS A LLOWED THE APPEAL OF THE ASSESSEE BY ALLOWING THE EXEMPTION BENEFIT U/S. 10A OF THE I.T. ACT. THE RELEVANT PORTION I.E. PARA NO. 3 TO 6 OF T HE AFORESAID TRIBUNALS ORDER IS REPRODUCED AS UNDER:- 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS AN ADMITTED POSI TION THAT THE ASSESSEE SET UP A NEW UNDERTAKING ON 23.10.2003 AND STARTED ITS BUSINESS OF MAINTENANCE OF SOFTWARE. TH E UNDERTAKING OBTAINED ITS STPI REGISTRATION ON 6.7.2 006 A COPY OF WHICH IS AVAILABLE ON PAGES 24 TO 26 OF THE PAPER BOOK. THE COMPETENT AUTHORITY NAMELY SOFTWARE TECHNOLOGY PARKS OF INDIA ISSUED GREEN CARD TO THE ASSESSEE AS 100% EOU UNDER THE STP SCHEME. THIS GRE EN CARD WAS INITIALLY VALID FOR ONE YEAR UPTO 5.7.2007 AND THEREAFTER IT WAS RENEWED FROM TIME TO TIME. THE A SSESSEE WAS NOT SET UP IN THE AREA DESIGNATED AS STP COMPLE X. HOWEVER ON THE BASIS OF INSTRUCTION NO.1 DATED 31. 3.2006 4 ISSUED BY THE CBDT PROVIDING THAT AN STP MAY BE A N EW UNIT BY ITSELF THE ASSESSEE APPLIED FOR THE REGIST RATION WHICH WAS DULY GRANTED BY TREATING THE ASSESSEE AS 100% EOU. THOUGH THE ASSESSEE WAS SET UP ON 23.10.2003 IT DID NOT CLAIM ANY BENEFIT OF SECTION 10A FOR THE ASSESS MENT YEARS 2004-05 ONWARDS BECAUSE IT WAS NOT HAVING STP REGISTRATION. IT WAS ONLY PURSUANT TO THE CLARIFICA TION ISSUED BY THE CBDT VIDE ITS INSTRUCTION NO.1 DATED 31.3.20 06 THAT THE ASSESSEE APPLIED FOR REGISTRATION AND IT WAS GR ANTED APPROVAL AS 100% EOU UNDER THE STP SCHEME. WHEN THE ASSESSEE WAS SET UP ON 23.10.2003 THE BENEFIT OF EXEMPTION U/S 10A WAS OTHERWISE AVAILABLE TO THE QUALIFYING UNITS. SINCE THE ASSESSEE DID NOT GET RE GISTRATION FROM THE DATE OF ITS SETTING UP IT DID NOT CLAIM T HE BENEFIT OF EXEMPTION U/S 10A AND PAID TAX ON ITS REGULAR INCOM E. THE MERE FACT THAT THE ASSESSEE WAS GRANTED STPI REGIST RATION ON 6.7.2006 WOULD NOT DISQUALIFY IT FOR BENEFIT OF SECTION 10A FOR THE PERIOD COMMENCING FROM SUCH DATE IF OTHER R EQUISITE CONDITIONS STAND SATISFIED. THE CASE OF THE REVENUE IS THAT THE ASSESSEE SHOULD HAVE CLAIMED THE BENEFIT OF SEC TION 10A FROM THE ASSESSMENT YEAR 2004-05 ITSELF AS IT WAS S ET UP IN THE PREVIOUS YEAR RELEVANT TO THAT ASSESSMENT YEAR AND SINCE NO SUCH CLAIM WAS MADE IT CANNOT BE CONSIDER ED AS ELIGIBLE FOR THE BENEFIT IN THE YEAR UNDER CONSIDER ATION. WE ARE NOT CONVINCED WITH THIS LOGIC. THERE CAN BE NO DENIAL OF THE FACT THAT THE ASSESSEE OTHERWISE FULFILLED ALL THE REQUISITE CONDITIONS FOR AVAILING BENEFIT U/S 10A FROM THE DA TE IT WAS SET UP IN FINANCIAL YEAR 2003-04. IT WAS ONLY DUE T O LACK OF STPI REGISTRATION THAT THE ASSESSEE DID NOT GET THE BENEFIT OF SECTION 10A FOR THE INTERVENING PERIOD TERMINATING ON THE DATE IT WAS GRANTED CERTIFICATE OF STPI REGISTRATIO N AS 100% 5 EOU ON THE BASIS OF INSTRUCTION NO.1 DATED 31.3.200 6. BY NOT CLAIMING EXEMPTION U/S 10A FOR THE EARLIER YEAR S THE ASSESSEE SIMPLY LOST BENEFIT FOR THOSE YEARS. AS TH E ASSESSEE WAS NOT ELIGIBLE FOR THE BENEFIT OF SECTIO N 10A FOR EARLIER YEARS FOR LACK OF REGISTRATION IT CANNOT B E SAID THAT THE BENEFIT OF SECTION 10A WHICH IS OTHERWISE RIGH TLY DUE TO THE ASSESSEE SHOULD ALSO BE DENIED ON GETTING THE REQUISITE REGISTRATION FOR THE REMAINING PERIOD OF TEN CONSE CUTIVE ASSESSMENT YEARS BEGINNING WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE UNDERTAK ING BEGINS TO MANUFACTURE OR PRODUCE.. COMPUTER SOFTWARE. THE HONBLE DELHI HIGH COURT IN PRAVE EN SONI VS. CIT (2011) 333 ITR 324 (DEL) HAS HELD THAT SPECIAL DEDUCTION U/S 80IB CANNOT BE DENIED FOR THE REMAINI NG YEARS IF IT WAS NOT CLAIMED FOR INITIAL YEARS SUBJE CT TO THE FULFILLMENT OF THE REQUISITE CONDITIONS. THE DELHI BENCH OF THE TRIBUNAL IN ITO VS. VIDYA TECH SOLUTIONS (P) LTD. ( 2010) 35 SOT 25 (DEL) HAS ALLOWED THE BENEFIT OF SECTION 10 A UNDER SIMILAR CIRCUMSTANCES AS ARE PREVAILING INSTANTLY. 4. THE AUTHORITIES BELOW HAVE ALSO CANVASSED A VIEW THAT SINCE THE ASSESSEE PURCHASED SOME OLD COMPUTERS IT WAS A CASE OF RECONSTRUCTION OF BUSINESS. WE ARE NOT SATI SFIED WITH THIS PROPOSITION IN SO FAR AS THE FACTS OF THE INST ANT CASE ARE CONCERNED. THE FACT THAT THE ASSESSEE USED SOME OLD COMPUTERS FOR ADMINISTRATIVE PURPOSES WOULD NOT MAK E THE ASSESSEE INELIGIBLE FOR THE BENEFIT OF SECTION 10A WHEN THE COMPUTERS AND SOFTWARE USED BY THE ASSESSEE IN THE INDUSTRIAL UNDERTAKING WERE NEW. WE HAVE SEEN THE B ALANCE SHEETS OF THE ASSESSEE STARTING WITH ITS FIRST CLOS ING ON 31.3.2014 AND THEREAFTER. IT IS OBSERVED THAT IN TH E FIRST 6 CLOSING ON 31.3.2014 THERE WERE NO FIXED ASSETS. T HE ASSESSEE STARTED PURCHASING COMPUTERS AND SOFTWARE ETC. FROM THE SECOND YEAR ONWARDS. THE ASSESSEE SIMPLY PURCHASED SOME SECOND HAND COMPUTERS FOR ADMINISTRA TIVE PURPOSES. IT DOES NOT MAKE IT A CASE OF RECONSTRUCT ED BUSINESS. 5. IN VIEW OF THE FOREGOING DISCUSSION WE ARE SATI SFIED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE DENIAL OF SECTION 10A BENEFIT TO THE ASSESSEE. THE IMPUGNED O RDER IS SET ASIDE TO THIS EXTENT. 6. IN THE RESULT THE APPEAL IS ALLOWED. 6. RESPECTFULLY FOLLOWING THE AFORESAID PRECEDENT O F THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR TH E ASSESSMENT YEAR 2007-08 I ALLOW THE BENEFIT OF SECTION 10A TO THE ASSESSEE AND ACCORDINGLY THE IMPUGNED ORDER IS SET ASIDE TO TH IS EXTENT. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2016 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 04/10/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR ITAT BY ORDER ASSISTANT REGISTRAR ITAT DELHI BENCHES 7