M/s. Shivam Communication-II, Ahmedabad v. The Income tax Officer,Ward-7(2),, Ahmedabad

ITA 2349/AHD/2010 | 2003-2004
Pronouncement Date: 31-08-2010 | Result: Dismissed

Appeal Details

RSA Number 234920514 RSA 2010
Bench Ahmedabad
Appeal Number ITA 2349/AHD/2010
Duration Of Justice 1 month(s) 15 day(s)
Appellant M/s. Shivam Communication-II, Ahmedabad
Respondent The Income tax Officer,Ward-7(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 31-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 31-08-2010
Assessment Year 2003-2004
Appeal Filed On 16-07-2010
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI JM AND D.C.AGRAWAL A M M/S SHIVAM COMMUNICATIONS- II 101 JANMANGAL APPTS. B/H SACHIN TOWER NR. SHYAMAL CROSS ROAD SATELLITE AHMEDABAD. VS. INCOME-TAX OFFICER WARD 7(2) AHMEDABAD. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- NONE REVENUEBY:- SHRI K. M. MAHESH SR.D.R. O R D E R PER D. C. AGRAWAL ACCOUNTANT MEMBER . THESE ARE TWO APPEALS FILED BY THE ASSESSEE RAISIN G COMMON GROUND ABOUT THE CLAIM OF DEDUCTION UNDER SECTION 80IA. 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A FIR M RUNNING PRIVATE TELEPHONE EXCHANGE BY PROCURING EPABX CONNECTION FO R OPERATING COMMERCIAL LAND LINE TAKEN FROM BSNL. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA(4)(I) FOR PROVIDING TELEPHONE SE RVICES. THE CLAIM WAS REJECTED BY THE AO ON THE GROUND THAT NATURE OF THE ACTIVITIES CARRIED OUT BY THE ASSESSEE DOES NOT ENTITLE DEDUCTION U/S 80IA AS THE SAME IS NOT SO ENVISAGED IN THAT SECTION. THE LD. CIT(A) ALSO REJE CTED THE CLAIM FOLLOWING THE DECISION OF SPECIAL BENCH OF THE ITAT (MUMBAI) IN THE CASE OF VIDESH SANCHAR NIGAM LTD. 111 ITD 190 (SB MUMBAI) DATED 17.8.2007. THE LD. CIT(A) HAS QUOTED FROM THAT JUDG MENT AND HELD THAT ITA NOS.2349 & 2350/AHD/2010 ASST. YEARS :2003-04 & 2005-06 2 DEDUCTION UNDER SECTION 80IA IS ALLOWED ONLY TO THO SE COMPANIES WHICH ARE GIVING BASIC SERVICES. THE ASSESSEE IS NOT IN T HE BUSINESS OF CELLULAR SERVICES BUT IN FACT IT HAS GOT SOME LINES FROM BSN L & THEN PROVIDING TELEPHONE FACILITY TO SOME CUSTOMERS. IT WAS HELD B Y THE SPECIAL BENCH THAT BASIC SERVICES ARE PROVIDED BY ONLY FEW COMPAN IES SUCH AS BSNL MTNL RELIANCE INFOCOM LTD. TATA TELESERVICES LTD. BHARATI TEL. VENTURES LTD. SHYAM TELILINK LTD. & HFCL INFOTECH LTD. ETC. AND OTHERS ARE NOT THE COMPANIES PROVIDING BASIC SERVICES AND ACCORDINGLY THEY WILL NOT BE ENTITLED TO DEDUCTION UNDER SECTION 80IA(4). THE LD. CIT(A) HAS GIVEN FOLLOWING REASONS FOR DISALLOWING THE CLAIM:- IN MY VIEW SINCE THE APPELLANT HAS HIRED FEW LINES FROM BSNL AND PROVIDED TELEPHONE CONNECTIONS TO A FEW CUSTOMERS IT DOES NOT AMOUNT TO GIVING OF BASIC SERVICES. IF THIS ARGUMENT OF THE A PPELLANT IS ACCEPTED THEN THE PABX OFFERED IN AN OFFICE OR A SOCIETY WOU LD ALSO CONSTITUTE OF PROVIDING BASIC SERVICES WHICH AS PER THE DECISION OF SPECIAL BENCH OF MUMBAI ITAT IS NOT SO. AS THE DECISION OF SPECIAL BENCH OF ITAT WOULD OVERRULE THE CONTRARY DECISION OF A CO-ORDINATE BEN CH RESPECTFULLY FOLLOWING THE DECISION OF SPECIAL BENCH I HOLD THA T THE APPELLANT IS NOT A BASIC SERVICE PROVIDER & HENCE NOT ENTITLED TO DEDU CTION U/S 80IA. 3. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF LD. CIT(A) AS HE HAS FOLLOWED THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL AND DISTINGUISHING FEATURES HAVE CITED BY THE LD. DR BEFORE US. WE HOLD THAT ASSESSEE IS NOT A BASIC SERVICE PR OVIDER. IT IS ONLY PROVIDING TELEPHONE CONNECTION TO FEW CUSTOMERS. DE DUCTION UNDER SECTION 80IA (4) WOULD BE AVAILABLE ONLY TO THE BAS IC SERVICE PROVIDER AND NO MORE. ACCORDINGLY THE APPEALS FILED FOR BOTH TH E YEARS BY THE ASSESSEE ARE DISMISSED. 3 4. IN THE RESULT THE APPEALS FILED BY THE ASSESSE E ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 31.8.2010. SD/- SD/- (BHAVNESH SAINI) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBE R AHMEDABAD DATED : 31.8.2010. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD