ACIT, New Delhi v. Sh. Yogendra Chandra Kurele,, New Delhi

ITA 3753/DEL/2010 | 2004-2005
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 375320114 RSA 2010
Assessee PAN ABAPK7210M
Bench Delhi
Appeal Number ITA 3753/DEL/2010
Duration Of Justice 1 year(s) 3 month(s) 25 day(s)
Appellant ACIT, New Delhi
Respondent Sh. Yogendra Chandra Kurele,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted I
Tribunal Order Date 30-11-2011
Date Of Final Hearing 15-11-2011
Next Hearing Date 15-11-2011
Assessment Year 2004-2005
Appeal Filed On 05-08-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I DELHI BEFORE SMT. DIVA SINGH & AND SHRI K.G. BANSAL ITA NOS. 3752 & 3753(DEL)/2010 ASSESSMENT YEARS: 2003-04 & 2004-05 ASSTT. COMMISSIONER OF INCOME SHRI YOGEND RA CHANDRA KURELE TAX CIRCLE 23 NEW DELHI. VS. 701 MER CANTILE HOUSE 15 K.G MARG NEW DELHI. PAN: ABAPK7210M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.L. DIHANA C IT DR RESPONDENT BY : S HRI AKARSH GARG ADVOCATE DATE OF HEA RING : 15.11.2011 DATE OF PRO NOUNCEMENT : 30.11.2011 ORDER PER BENCH IN BOTH THE APPEALS THE REVENUE HAS RAISED SIMIL AR GROUNDS TO THE EFFECT THAT ON THE FACTS AND IN THE CIRCUMST ANCES OF THE CASE THE LD. CIT(APPEALS) ERRED IN DELETING THE DISALLOW ANCE MADE BY THE AO OF THE CLAIM MADE U/S 10A OF THE INCOME-TAX AC T 1961 (THE ACT FOR SHORT). THE CLAIM AMOUNTED TO RS. 9 57 5 0 188/- IN ASSESSMENT YEAR 2003-04 AND RS. 1 12 19 869/- IN ASSESSMENT YEAR 2004-05. 2. IT IS THE COMMON CASE OF BOTH THE PARTIES THAT THE LD. CIT(APPEALS) ALLOWED THE CLAIM BY FOLLOWING THE D ECISION OF THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR ASSESS MENT YEAR 2002-03 IN ITA NO. 2819(DEL)/2009 DATED 16.10.2009. HOWEVER SINCE THE ITA NOS. 3752 & 3753(DEL)/2010 2 2 REVENUE HAS CARRIED THE MATTER FURTHER THE LD. CIT DR RELIES ON THE ORDER OF THE AO. 3. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. THE DECISION OF THE TRIBUNAL (SUP RA) READS AS UNDER:- '26. DISSATISFIED WITH THE ACTION OF THE ASSESSING OFFICER ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LEARNED CIT(APPEALS ). IT WAS CONTENDED BY THE ASSESSEE THAT HE HAS DULY SET UP AN EXPORT DIVISION UNDER THE NAME & STYLE OF BULBUL KURELY EXPORTS. THE EXPORT DIVISION WAS DULY APPROVED BY THE SOFTWARE TECHNOLOGY PARK OF INDIA (STPI) NOIDA UND ER THE MINISTRY OF INFORMATION AND BROADCASTING GOVERNMENT OF INDIA W HICH IS AN APPROVED AUTHORITY FOR THIS PURPOSE. THE ASSESSEE CONTENDED THAT HE HAS FILED COPY OF REGISTRATION CERTIFICATE WITH THE ASSESSING OFFICER. THE AS SESSEE FURTHER CONTENDED THAT EXPORTS WERE SUPPORTED BY RELEVANT BILLS AND OTHE R DOCUMENTS AS ARE REQUIRED TO BE KEPT MAINTAINED IN RELATION TO THE FOREIGN TRADE. A SSESSING OFFICER HAS NOT RAISED ANY DOUBT ABOUT THOSE AGREEMENTS AND BILLS. IT WAS ALSO CONTENDED THAT STPI IS A TECHNICAL AUTHORI TY CONSISTING OF HIGHLY TECHNICAL PERSONS HAS NEVER CHARGED THE ASSESSEE WI TH ANY VIOLATION OF NOT EXPORTING SOFTWARE DEVELOPMENT AND EXPORTED BY THE ASSESSEE. WITH REGARD TO THE APPREHENSION OF ASSESSING OFFICER THAT M/S. LAM RESEARCH WOULD HAVE NOT ENTERED INTO AN AGREEMENT WITH AN ENTITY LIKE ASSES SEE FOR DEVELOPMENT OF SOFTWARE BECAUSE OF DIFFERENCE IN THE STRATURE OF T HE TWO ENTITIES IT WAS CONTENDED BY THE ASSESSEE THAT ASSESSING OFFICER HA S COLLECTED THE INFORMATION FROM THE WEB SITE ONLY WHICH MERELY GIVE THE BROAD PROFILE OF THE ORGANIZATIONS. IN ORDER TO P[ROVE THE ADDRESS OF TH E LAM RESEARCH THE ASSESSEE HAD PRODUCED COURIER ACKNOWLEDGMENT EXHIBI TING SENDING OF DOCUMENTS. THE ASSESSEE HAS ALSO PRODUCED COPY OF T HE FIRC FROM PUNJAB NATIONAL BANK EXPORT BILL AND BANK CERTIFICATE WHI CH INDICATE THAT MONEY HAS BEEN RECEIVED FROM THE ACCOUNT OF LAM RESEARCH ITSE LF. IT WAS EMPHASIZED BY THE ASSESSEE THAT REMITTANCE IN FOREIGN EXCHANGE WE RE UNDISPUTEDLY ATTRIBUTED TO LAM RESEARCH CORPORATION ONLY AND THE ASSESSING OFFICER ALSO NOT DOUBTED SUCH RECEIPT. WITH REGARD TO THE REPORT OF IT INSPE CTOR ABOUT THE VISIT OF ASSESSEE'S PREMISES IT WAS CONTENDED THAT ASSESSIN G OFFICER HAS MISERABLY FAILED TO TAKE COGNIZANCE GEOGRAPHY OF THE PREMISES . THE PREMISES IS A THREE & HALF STORIED BUILDING BUILT ON A PLOT OF 196.97 SQ.YDS. HAVING COVERED AREA OF MORE THAN 3 000 SQ.FIS. IT WAS CONSISTING OF ONE BI G HALL AT THE GROUND FLOOR SIX CABINS FOR SENIOR STAFF AND ONE CABIN FOR HOUSI NG WORK STATION SEVEN WORK STATIONS AT FIRST FLOOR. SIMILARLY FOUR CABINS FOR SENIOR STAFF AND AMPLE PROVISIONS FOR MORE THAN TWENTY WORK STATIONS AT SE COND FLOOR. AT THIRD FLOOR ONE HALL GUEST ROOM KITCHEN AND SERVANT ROOM. SIM ILARLY WITH REGARD TO THE STATEMENT OF SHRI AMOD SRIVASTAVA IT WAS POINTED O UT THAT SOME DISPUTE ON PAYMENT WAS THERE WITH SHRI AMOD SRIVASTAVA AND TH EREFORE HE HAS GIVEN A STATEMENT AGAINST THE ASSESSEE. SHRI SRIVASTAVA HAS CATEGORICALLY DENIED ABOUT THE RECEIPT OF ANY PAYMENT AND CARRYING OUT ANY ACT IVITY FOR THE ASSESSEE BUT ITA NOS. 3752 & 3753(DEL)/2010 3 3 THE ASSESSEE HAS PRODUCED CERTIFICATE FROM THE BANK INDICATING CLEARANCE OF A CHEQUES FOR A CONSIDERATION OF RS. 4 50 0001- IN FA VOUR OF SHRI SRIVASTAVA. SHRI SRIVASTAVA HAS TERMED HIMSELF AS A LAY MAN WHO DOES NOT KNOW ANYTHING ABOUT THE SOFTWARE BUSINESS BUT HE WAS A FRANCHISE HOLDER OF ET & T AN CENTRAL GOVERNMENT UNDERTAKING UNDER THE FIRM NAME M/S IFCO MNETWORKING 112/116A BENAJHABAR ROAD -KANPUR. THE ASSESSEE HAS SUBMITTE D CHEQUE NUMBERS AND DETAILS OF CLEARANCE. WITH REGARD TO TH E DEFECTS POINTED OUT ABOUT USER OF INTERNET IT WAS CONTENDED BY THE ASSESSEE THAT ASSESSING OFFICER FAILED TO APPRECIATE THE VERY ACTIVITY. 168 HOURS OF ISDN WERE UTILIZED BY THE ASSESSEE FOR UPLOADING THE SOFTWARE TO THE PURCHASE R OTHERWISE FOR DEVELOPMENT OF SOFTWARE HE HAS USED 13200 HOURS OF THE NET WORKING. 27. LEARNED FIRST APPELLATE AUTHORITY HAS RE-APPREC IATED THE CONTROVERSY IN DETAILS AND ALLOWED THE EXEMPTION TO THE ASSESSEE. HIS DETAILED FINDING IS WORTH TO NOTE: '4.6 I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE AUTHORIZED REPRESENTATIVE REMAND REPORT AND REJOINDER THERETO . THE A.O. HAD IN HIS ASSESSMENT ORDER DOUBTED THE EXPORT OF SOFTWARE TO M/S LAM RESEARCH. THE APPELLANT HAS PRODUCED EVIDENCE IN THE FORM OF BANK ER'S CERTIFICATE FOR FOREIGN REMITTANCE COPIES OF BILLS AND OTHER CORRESPONDENC E WIT LAM RESEARCH TO PROVE THAT REMITTANCES CAME FROM THE BANK ACCOUNT O F LAM RESEARCH ITSELF. THE AO HAS ALSO OBSERVED THAT LAM RESEARCH IS A FORTUNE 50 0 COMPANY AND HENCE THERE CAN BE NO DOUBT THAT THERE CAN BE ANY F ALSITY IN THE CERTIFICATE ISSUED BY THE BANKERS EVIDENCING FLOW OF FUNDS FROM BANK ACCOUNT OF LAM RESEARCH. COURIERS SENT TO LAM RESEARCH HAVE ALSO N OT BEEN DISPUTED BY THE AO IN HIS REMAND REPORT. HENCE AS REGARDS THE BUYER IS CONCERNED NO QUESTION CAN BE RAISED AGAINST THE SAME. THE EXPORT OF SOFTWARE ALSO STANDS PROVEN BY THE SOFTEX RETURNS FILED BY THE APPELLANT REGULARLY IN COMPLIANCE TO THE STP I GUIDELINES. EVEN ON AN ENQUIRY BY THE AO FROM STP I VIDE ITS LETTER DATED 12.05.2005 THE JOINT DIRECTOR OF STP I HAS R EPLIED TO THE AO. THE RELEVANT CONTENTS OF THE REPLY ARE REPRODUCED HEREU NDER: 'SOFTWARETECHNOLOGYPARKSOFINDIA MINISTRYOFCOMMUNICATIONANDINFORMATION TECHNOLOGY DEPARTMENTOFINFORMATION TECHNOLOGY GOVERNMENTOFINDIA GANGASOFTWARETECHNOLOGY COMPLEX SECTOR 29 NOIDA-201303 (UP) TRAVELLINGEXPENSES.91-120-245041/ 2450412-/4 2450400-03 FAX 91-120-245404-05 WEBSITE :- W WW .STPN.SOFI.NETLWWW.STPIONLINE.COM. SUB: SETTING UP 100% EXPORT ORIENTED UNIT UNDER ST P SCHEME FOR THE DEVELOPMENT/MANUFACTURE OF COMPUTER SOFTWARE-REG. THIS REFERS TO YOUR LETTER NO. YCIACITIKNPI04-05I1O DATED 31.03.05 RECEIVED IN THIS OFFICE ON 26.4.05 REGARDING THE AB OVE SUBJECT MATTER. AS PER OUR RECORDS THE FOLLOWING ARE THE FACTS: 1.M/S BULBUL KURELE EXPORTS IS REGISTERED UNDER STP SCHEME VIDE APPROVA L NO. PCMGIPSEI051025-STPNI6475 DTD. 30 TH JA.2002 FOR THE DEVELOPMENT OF COMPUTER SOFTWARE FROM THE LOCATION 113/127 SWAR OOP NAGAR KANPUR (UP). 2.THE UNIT HAS EXPORTED THE COMPUTER SOFTWARE RS.5. 78 CRORES IN THE FINANCIAL YEAR 2001-02. REGARDING CLARIFICATION IN RESPECT OF BUYER M/S. LAM RESEARCH CORPORATION AS PER THE RECORDS THE ADD RESS IS 4650 CUSHING PARKWAY FREMONT CA 94538-6470 DALLAS-TEXA S USA. M/S. LAM RESEARCH CORPN. HAS ALSO COMMUNICATED ON 22.10. 2001 TO M/S. BULBUL KURELE EXPORTS TO START DEVELOPMENT OF THEIR SOFTWARE AT T HE EARLIEST IN THE RESULT PARTY HAS INITIATED THE DEVE LOPMENT PROCESS. THE COPY OF COMMUNICATION HAS FILED BY THE PARTY ON 17TH JANUARY 2002 ALONG WITH APPLICATION FOR STP I REGISTRATION. SO.. DUR ATION OF PROJECT IS MORE THAN 3 MONTHS. 3.IN CASE OF EXPORT OF SOFTWARE THROUGH DATA COMMUNICATION LINK THE DECLARATION OF EXPORT IS IN SOFTEX FORM AS PER RBI GUIDELINE. THE PROCEDURE OF ATTESTATION OF SOFTEX BY STPI IS BASED ON DECLARATION BY THE PARTY IN THE SOFTEX FORMS PURCHASE ORDER/AGREEMENT WITH THE CLIENT BACK- UP FORM SUBMITTED BY THE PARTY AND PROOF OF DATA-CU M SERVICE PROVIDER. AS PER DECLARATION ON THE BACK-UP FORM TOTAL NUMBER OJ MAN HOURS SPENT IS 13200. ONCE IT IS UNDISPUTED THAT SOFTWARE WAS EXPORTED IT S EXISTENCE COULD NOT HAVE BEEN DOUBTED. SOFTWARE CAN EXIST ONLY WHEN EITHER IT IS 'PURCHASED' OR IT IS 'DEVELOPED'. THE A.O. HAS IN FACT DISBELIEVED THE FACTUM OF DEVELOPMENT BY THE APPELLANT AND HAVE SIMULTANEOUSLY HELD THAT NO EVIDENCE FOR PURCHASE COULD BE PRODUCED. ON THE OTHER HAND THE APPELLANT SUBMITS THAT THERE CANNOT BE ANY EVIDENCE OF PURCHASE BECAUSE THE SOFTWARE WR ITTEN SUBMISSIONS DEVELOPED. SIMILARLY ALL THE ADVERSE CONCLUSIONS DR AWN BY THE A.O HAS BEEN CONTROVERTED WITH COGENT EVIDENCE BY APPELLANT. SUC H REBUTTAL HAS NOT BEEN COUNTERED BY THE A.O. IN REMAND REPORT. IT MAY BE N OTED THAT SH. AMOD SRIVASTAVA HAD RECEIVED PAYMENT OF RS.4.50 LAKHS TH ROUGH ACCOUNT PAYEE CHEQUE AND THAT HE WAS FRANCHISEE OF ET & T AN CENTRAL GOVT.. UNDERTAKING UNDER THE NAME M/S. IFCOM NETWORK. IT SHOWS THAT HE WAS ALSO ENGAGED IN SOFTWARE ACTIVITIES HENCE THE STATEMENT OF AMOD SRIVASTAVA IN CONTRADICTION TO THESE UNDISPUTED FACTS HAS NO CRED ENTIALS. MOREOVER NO OPPORTUNITY WAS GIVEN TO CROSS EXAMINE SHRI.AMOD SR IVASTAVA .IT IS A TRITE LAW THAT THE OPPORTUNITY OF CROSS-EXAMINATION MUST BE ALLOWED TO THE ASSESSEE ITA NOS. 3752 & 3753(DEL)/2010 5 5 IF ANY STATEMENT IS RECORDED BEHIND HIS BACK. IN THE F ACTS OF THE INSTANT CASE SUCH A REQUIREMENT WAS IMPERATIVE CONSIDERING THAT THE AVERMENTS IN THE STATEMENT WERE CONTRARY TO THE FACTS ON RECORD IN A BSENCE OF SUCH CROSS EXAMINATION EVEN DURING REMAND PROCEEDING SUCH STAT EMENT CANNOT BE TREATED AS EVIDENCE' OR 'MATERIAL' FOR THE PURPOSE OF MAKING A SSESSMENT. SIMILARLY IN REGARD TO THE INSPECTOR'S REPORT IT IS NOTICED THAT THE INSPECTOR VISITED THE PREMISES AFTER THE 'CLOSURE OF BUSINESS . MOREOVER THE FINDINGS THEREIN ARE IN CONTRADICTION TO THE AUDIT OF AG ALL AHABAD AND SOFTEX RETURNS FILED BEFORE THE AUTHORITIES: IN REGARD TO THE EVID ENCE OF PURCHASE AND SALE OF COMPUTERS THE SELLER WAS REGISTERED WITH SALES-TAX DEPARTMENT. EVEN THE PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUE. REGA RDING THE ISSUE OF NUMBER OF HOURS IN DEVELOPMENT OF SOFTWARE AS MENTI ONED IN THE LETTER OF JOINT DIRECTOR STPI THE TOTAL MAN HOURS SPENT FOR SOFTWARE DEVELOPMENT WERE 13200 AND THUS IT SEEMS THAT THE AO. BY MISTAKE HAD TAKEN THE NUMBER OF HOU RS I. E. 168 HOURS UTILIZED FOR UPLOADING THE SOFTWARE AS MAN HOURS UTILIZED FO R DEVELOPMENT OF SOFTWARE. IT MAY BE NOTED THAT THE APPELLANT SUBMITTED MONTHL Y REPORTS REGARDING SOFTWARE EXPORT TO THE COMPETENT AUTHORITY WHICH HAS ACCEPTED THE SAME IN DISCHARGE OF EXPORT OBLIGATION. IT IS ALSO NOTED TH AT THE EXPORT OF SOFTWARE WAS ALSO DECLARED ON EXPORTS DECLARATION FORM SOFTEX AN D THE STP I ALSO CERTIFIED THAT THE SOFTWARE DESCRIBED IN THE SOFTEX FORM WAS ACTUALLY EXPORTED THE EXPORT VALUE HAS BEEN RECEIVED IN FOREIGN CONVERTIB LE EXCHANGE THROUGH PROPER BANKING CHANNELS AS CERTIFIED IN FOREIGN INW ARD REMITTANCE CERTIFICATES (FIRCS). THERE IS NO COGENT COUNTRY EV IDENCE ON RECORD TO CONCLUDE THAT THE APPELLANT HAS NOT EXPORTED SOFTWA RE TO LAM RESEARCH USA. THE APPELLANT HAS ALSO FURNISHED A REPORT OF THE CH ARTERED ACCOUNTANT IN THE PRESCRIBED FORMAT ALONG WITH THE RETURN OF INCOME F OR CLAIM OF DEDUCTION U/S 10A OF THE ACT. HENCE ON CONSIDERATION OF TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE VIEW THAT TH E APPELLANT IS ELIGIBLE FOR THE BENEFIT U/S 10A OF THE INCOME-TAX ACT. HENCE T HE A.O IS DIRECTED TO ALLOW THE BENEFIT U/S 10A OF RS. 5 64 62 8501- TO THE APPELLANT'. 28. BEFORE US LEARNED DR RELIED UPON THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE DEFECTS POINTED OUT BY THE ASSESSING OFFICER. ON THE OTHER HAND LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE OR DER OF THE LEARNED CIT(APPEALS}. THE LEARNED COUNSEL FOR THE ASSESSEE SPECIFICALLY DREW OUR ATTENTION TOWARDS THE SUBMISSIONS MADE BY THE ASSES SEE BEFORE THE LEARNED FIRST APPELLATE AUTHORITY WHICH HAS BEEN REPRODUCED IN A SUMMARIZED FORM IN PARAGRAPH NOS. 4.3 TO 4.5. HE DREW OUR ATTENTION TOWARDS THE COPY OF THE LETTER OF STP I DATED 12.3.2005 AVAILABLE AT PAGE N OS. 298 OF THE PAPER BOOK. IN THIS LETTER STPI HAS MENTIONED THAT M/S BULBUL KURELE EXPORTS IS REGISTERED UNDER STP SCHEME VIDE APPROVAL NO.PCMGIP SCI051025- STPNI6476DATED 30.1.2002 FOR THE DEVELOPMENT OF COM PUTERS SOFTWARE FROM THE LOCATION 113/27 SWARUP NAGAR KANPUR. DURING THE COURSE OF HEARING WE HAVE CONFRONTED THE LEARNED COUNSEL FOR THE ASSESSEE TO SHOW AS TO HOW M/S BULBUL KURELEY EXPORT IS TO BE CONSIDERED AS A UNIT DEVELOPING SOFTWARE FROM SOFTWARE TECHNOLOGY PARK IN ACCORDANC E WITH THE CONDITIONS ENUMERATED IN SEC. 10A OF THE ACT. IN RESPONSE TO O UR QUERY HE PLACED ON ITA NOS. 3752 & 3753(DEL)/2010 6 6 RECORD COPY OF SOFTWARE TECHNOLOGY PARK (STP SCHEME ) NOTIFIED BY THE MINISTRY OF COMMERCE WHICH HAS BEEN EXTRACTED FROM CHATURVEDI PITHISARIA'S INCOME-TAXLAW 5 TH EDITION PAGE NOS. 935 TO 937. THIS SCHEME IS AVAILABLE AT PAGENOS.1640TO 1642 OF SAMPATH IYENGAR LAW OF INCOM E-TAX 10TH EDITION. HE POINTED OUT THAT UNIT WAS SITUATED AT 113127 SWA RUP NAGAR KANPUR. IT WAS REGISTERED UNDER STP SCHEME WITH DESIGNATED OFF ICER AND DIRECTOR SOFTWARE TECHNOLOGY PARK OF NOIDA. THE CERTIFICATE IS PLACED AT PAGE NOS. 30 TO 43 OF THE PAPER BOOK. THE UNIT HAS NOT BEEN FORMED BY TRANSFER OF MACHINE RY AND PLANT PREVIOUSLY USED FOR ANY PURPOSE THE ASSESSEE HAS PRODUCED COM PUTER SOFTWARE AND TRANSMITTED SUCH SOFTWARE FROM INDIA TO PLACES OUTS IDE INDIA I.E. USA THE SALE PROCEEDS HAVE BEEN REPATRIATED WITHIN THE TIME LIMI T PROVIDED BY THE RBI AS WELL AS IN THE ACT INTO INDIA IN CONVERTIBLE FOREIG N EXCHANGE. THE ASSESSEE HAS PRODUCED COPY OF FIRCS EXPORT BILLS AND BANK CERTI FICATE IN SUPPORT OF THESE FACTS EMPHASIZED THE MEANING OF STP HE POINTED OUT THAT IN STP SCHEME IT HAS BEEN CLARIFIED THAT AN STP MAY BE AN INDIVIDUAL UNIT BY ITSELF OR IT MAY BE ONE OF SUCH UNITS LOCATED IN AN AREA DESIGNATED AS STP COM PLEX BY THE DEPARTMENT OF ELECTRONICS. 29. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSING OFFICER IN THE A SSESSMENT ORDER NOWHERE DOUBTED ABOUT THE STATUS OF ASSESSEE AS AN STP UNIT. HE HAS NOT RAISED ANY OBJECTION WITH REGARD TO FULFILLMENT OF CONDITIONS CONTEMPLATED INSEC.10AFOR CLAIMING EXEMPTION. THE STP I IS A TEC HNICAL AUTHORITY CONSISTING OF HIGHLY TECHNICAL PERSONS HAS NEVER CH ARGED THE ASSESSEE WITH ANY VIOLATION OF SOFTWARE DEVELOPMENT AND EXPORTING THE SAME BY THE ASSESSEE. THE ASSESSEE HAS PRODUCED SUFFICIENT EVID ENCE IN THE SHAPE OF REGISTRATION CERTIFICATE LETTER BY THE JOINT DIREC TOR STPI NOIDA TO THE ASSESSING OFFICER IN RESPONSE TO HIS QUERY ABOUT TH E GENUINENESS OF ASSESSEE'S TRANSACTION. THIS MAY BE THE REASON THAT ASSESSING OFFICER HAS NOT DOUBTED THE STATUS OF ASSESSEE AS AN STP UNIT. THE EMPHASIS OF THE ASSESSING OFFICER FOR DOUBTING THE ACTIVITY OF THE ASSESSEE IS NOT SUPPORTED BY ANY EVIDENCE. THE FIRST APPREHENSION IN HIS MIND IS THAT HOW A COMPANY HAVING A STRATURE OF LAM RESEARCH WOU LD ENTER INTO AN AGREEMENT WITH SMALL ENTITY LIKE ASSESSEE. THIS APP REHENSION CANNOT BE GIVEN MORE WEIGHTAGE THEN THE EVIDENCE EXHIBITING T HE PAYMENT FROM M/S LAM RESEARCH TO THE ASSESSEE THROUGH BANKING CHANNE L. THE ASSESSING OFFICER HAS NOT RAISED ANY DOUBT ABOUT THE RECEIPT OF FOREIGN EXCHANGE IN INDIA BY THE ASSESSEE AND SUCH PAYMENT IS ATTRIBUTA BLE TO M/S LAM RESEARCH. SIMILARLY OTHER OBJECTION IS OF INTERNET USED THAT HAS BEEN DEMONSTRATED BY THE ASSESSEE THAT ASSESSING OFFICER MISERABLY FAILED TO UNDERSTAND THE USE OF INTERNET. THE ASSESSEE IN F ACT USED 13200 HOURS OF INTERNET FOR DEVELOPMENT OF SOFTWARE; 168 HOURS OF INTERNET CONSIDERED BY THE ASSESSING OFFICER WERE USED ONLY FOR UPLOADING THE SOFTWARE FROM INDIA. THE OTHER OBJECTION IS OF OFFICE SPACE BASED ON INCOME-TAX INSPECTOR ITA NOS. 3752 & 3753(DEL)/2010 7 7 REPORT THE ASSESSEE HAS DEMONSTRATED THAT HE WAS H AVING 3000 SQ. FT. AREA WHICH IS SUFFICIENT. SIMILARLY ASSESSEE HAS DEMOLI SHED THE ALLEGED STATEMENT OF SHRI AMOD SRIVASTAVA. THIS STATEMENT W AS RECORDED AT THE BACK OF ASSESSEE AND NO OPPORTUNITY FOR CROSS-EXAMI NATION WAS GIVEN. WE HAVE PERUSED THE STATEMENT AVAILABLE AT PAGES 39 TO 43 OF THE PAPER BOOK. HE HAS DENIED THE RECEIPT OF RS.4 50 000 IN THE STA TEMENT. THIS FACT IS FACTUALLY INCORRECT. ASSESSEE HAS DISPROVED THIS DE NIAL WITH THE HELP OF BANK CERTIFICATE EXHIBITING. THE CLEARANCE OF CHEQU ES IN HIS FAVOUR. THUS IT INDICATES THAT THIS MAN WAS DEPOSING FALSELY. LEARN ED CIT(APPEALS) HAS CONSIDERED ALL THESE ASPECTS IN DETAILS IN THE FIND ING EXTRACTED SUPRA. IF WE WEIGH THE EVIDENCE PRODUCED BY THE ASSESSEE I.E. RE GISTRATION AND APPROVAL FROM STPI FOR DEVELOPMENT OF SOFTWARE RECEIPT IN F OREIGN EXCHANGE EMPLOYMENT OF MORE THAN 30 EMPLOYEES LETTER OF STP I AUTHORITY EXHIBITING THE DEVELOPMENT OF SOFTWARE AND ITS EXPO RTS BANK CERTIFICATE IN SUPPORT OF RECEIPT OF FOREIGN RECEIPT COPY OF FIRC S AND OTHER DOCUMENTARY EVIDENCE VIS-A-VIS THE SUPERFICIAL APPR EHENSION HARBORED BY THE ASSESSING OFFICER DISCUSSED ABOVE THEN SCALE WO ULD TILT IN FAVOUR OF THE ASSESSEE. THUS IN VIEW OF THE ABOVE DISCUSSION WE DO NOT FIND ANY MERIT IN THIS GROUND OF APPEAL. IT IS REJECTED. ' 4. AS THE MATTER HAS ALREADY BEEN DECIDED AND NO DISTINCTION IN FACTS HAS BEEN POINTED OUT RELYING ON THE SAME IT IS HELD THAT THE LD. CIT(APPEALS) WAS RIGHT IN ALLOWING THE CLAIM OF THE ASSESSEE U/S 10A OF THE ACT. 5. IN THE RESULT BOTH THE APPEALS ARE DISMISSED . SD/- SD/- (DIVA SINGH) (K.G. BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA ITA NOS. 3752 & 3753(DEL)/2010 8 8 COPY OF THE ORDER FORWARDED TO:- YOGENDRA CHANDRA KURELE NEW DELHI. ACIT CENTRAL CIRCLE 23 NEW DELHI. CIT CIT(A) THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.