ACIT, New Delhi v. M/s Educomp Solutions Ltd, Gurgaon

ITA 569/DEL/2015 | 2009-2010
Pronouncement Date: 09-11-2017 | Result: Partly Allowed

Appeal Details

RSA Number 56920114 RSA 2015
Assessee PAN AAACE2983M
Bench Delhi
Appeal Number ITA 569/DEL/2015
Duration Of Justice 2 year(s) 9 month(s) 10 day(s)
Appellant ACIT, New Delhi
Respondent M/s Educomp Solutions Ltd, Gurgaon
Appeal Type Income Tax Appeal
Pronouncement Date 09-11-2017
Appeal Filed By Department
Tags No record found
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 09-11-2017
Assessment Year 2009-2010
Appeal Filed On 29-01-2015
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI G.D. AGRAWAL HONBLE PRESIDEN T & SHRI K.N. CHARY JUDICIAL MEMBER ITA NOS.-568 TO 572/DEL/2015 ( ASSESSMENT YEARS: 2008-09 TO2012-13) ACIT CENTRAL CIRCLE 2 NEW DELHI. VS EDUCOMP SOLUTIONS LTD. 514 UDYOG VIHAR PHASE-III GURGAON AAACE2983M ASSESSEE BY SH. DEEPESH JAIN CA REVENUE BY MS. RACHNA SINGH CIT DR ORDER PER BENCH AGGRIEVED BY THE ORDER DATED 03.11.2014 IN APPEAL N OS. 82 AND 76 TO 79/14-15 RELEVANT TO THE ASSESSMENT Y EARS 2008- 09 TO 2012-13 PASSED BY THE LD. COMMISSIONER OF INC OME TAX (APPEALS)-1 NEW DELHI (HEREINAFTER FOR SHORT REFER RED TO AS THE LD. CIT(A)) REVENUE IS IN THESE APPEALS CHALLE NGING THE DELETION OF ADDITION MADE BY THE ASSESSING OFFICER (FOR SHORT DATE OF HEARING 26.10.2017 DATE OF PRONOUNCEMENT 09.11.2017 2 ITA NOS. 568 TO 572/DEL/2015 CALLED AS THE AO) ON ACCOUNT OF AMORTIZED EXPENSE S ON ISSUE OF ESOPS. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF PROVIDING EDUCATION SERV ICE TO SCHOOLS INCLUDING INFORMATION COMMUNICATION & TECH NOLOGY (ICT) SERVICE TO GOVERNMENT SCHOOLS ONLINE EDUCATI ON SERVICE AND WEB TUTORIAL SERVICES ETC. THERE WAS A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT 1961 (HER EINAFTER FOR SHORT CALLED AS THE ACT) ON 18.08.2011 IN THE EDU COMP GROUP OF CASES IN WHICH THE ASSESSEE I.E. EDUCOMP SOLUTI ON LTD. IS THE FLAGSHIP CONCERN. DURING THE COURSE OF ASSESSM ENT PROCEEDINGS IT WAS SEEN THAT THE ASSESSEE HAD AMOR TIZED THE EXPENDITURE UNDER THE HEAD EMPLOYEE STOCK OPTION S CHEME AND THE AO DISALLOWED THE SAME BY TREATING IT AS NO T ALLOWABLE AS PER THE PROVISIONS OF THE ACT. IN APPEAL FOR TH E AY 2008-09 THE LD. CIT (A) REMANDED THE MATTER TO THE AO DIREC TING HIM TO RE-COMPUTE THE INCOME STARTING FROM THE INCOME ORIG INALLY ASSESSED U/S 143(3) OF THE ACT AS MODIFIED BY THE APPEAL EFFECTS GIVEN TO THE ORDERS OF THE LD. CIT (A) AND ITAT IN ITA NO. 3 ITA NOS. 568 TO 572/DEL/2015 833/DEL/2013 IN ASSESSEES OWN CASE FOR THAT ASSESS MENT YEAR. HOWEVER IN RESPECT OF ASSESSMENT YEARS 2009 -10 TO 2012-13 LD. CIT (A) DID NOT CONSIDER IT NECESSARY TO REMAND THE MATTER FOR RE-COMPUTATION OF INCOME STARTING FR OM THE INCOME ORIGINALLY ASSESSED U/S 143(3) IN TERMS OF T HE ORDER DATED 26.09.2014 IN ITA NO. 833/DEL/2012 IN ASSESSE ES OWN CASE FOR THE AY 2008-09. 3. CHALLENGING THESE ORDERS THE REVENUE IS IN THIS APPEALS BEFORE US STATING THAT THE ORDER OF THE LD. CIT (A) IN DELETING THE ADDITION IN RESPECT OF THE ASSESSMENT YEARS 2009-10 TO 2012- 13 IS BAD UNDER LAW AND THE PRINCIPLE OF RES JUDICATA DOES NOT APPLY TO TAX PROCEEDINGS. IT IS FURTHER CONTENDED BY THE LD. DR THAT INASMUCH AS A COORDINATE BENCH OF THIS TRIBUNA L BY ORDER DATED 26.09.2014 SET ASIDE THE MATTER TO THE FILE O F THE AO FOR VERIFICATION OF QUANTUM OF DEDUCTION CLAIMED BY THE ASSESSEE IN THE LIGHT OF THE DECISIONS OF THE SPL. BENCH IN THE CASE OF BIOCON LTD. VS. DCIT (2013) 144 ITD 21 THE LD. CIT (A) SH OULD HAVE FOLLOWED THE SAME IN RESPECT OF ALL THESE YEARS ALS O. 4 ITA NOS. 568 TO 572/DEL/2015 4. PER CONTRA IT IS THE SUBMISSION OF THE LD. AR T HAT THE LD. CIT (A) AS A MATTER OF FACT SET ASIDE THE MATTER IN RESPECT OF THE AY 2008-09 FOR VERIFICATION AT THE END OF THE AO AN D TO RE- COMPUTE THE INCOME STARTING FROM THE INCOME ORIGINA LLY ASSESSED U/S 143(3) OF THE ACT AS MODIFIED BY THE A PPEAL EFFECTS GIVEN TO ORDERS OF LD. CIT (A) AND ITAT WHILE GIVIN G EFFECT TO HIS ORDER FOR AY 2008-09 AND THIS DIRECTION IS IN COMPL IANCE WITH THE ORDERS OF THE ITAT. IN RESPECT OF OTHER YEARS A LSO THE SAID DIRECTION WAS CONSIDERED BY THE AUTHORITIES BELOW A S IS EVIDENT FROM THE QUESTIONNAIRE FURNISHED AND ANSWERS OBTAIN ED AS IS INCORPORATED IN THE ORDER OF THE LD. CIT (A). 5. WE HAVE GONE THROUGH THE RECORD. THE ORDER OF T HE LD. CIT (A) FOR THE AY 2008-09 VIDE PARAGRAPH NO. 3 RE FERS TO THE DIRECTION GIVEN BY A COORDINATE BENCH OF THIS TRIBU NAL BY ORDER DATED 26.09.2014 IN ITA NO. 833/DEL/2012. HE OBSER VED THEREIN THAT THE ORDER OF THE ITAT PREVAILS IN THE SAME MATTER IN ISSUE AND BASING ON THAT HE SET ASIDE THE ISSUE TO THE AO WITH A DIRECTION TO RE-COMPUTE THE INCOME STARTING FROM THE INCOME ORIGINALLY ASSESSED U/S 143(3) OF THE ACT AS MODIFIED BY 5 ITA NOS. 568 TO 572/DEL/2015 THE APPEAL EFFECTS GIVEN TO THE ORDERS OF THE LD. C IT (A) AND THE TRIBUNAL WHILE GIVING EFFECT TO THE ORDER DATED 03. 11.2014 IN APPEAL NO. 82/14-15 FOR AY 2008-09. WE FIND THAT T HIS COURSE ADOPTED BY THE LD. CIT (A) IS PERFECTLY JUSTIFIED I N VIEW OF THE DECISION OF THE SPL. BENCH OF THIS TRIBUNAL IN BIOC ON LTD. VS. DCIT (SUPRA). 6. HOWEVER IN SO FAR AS THE OTHER YEARS ARE CONCER NED INSTEAD OF GIVING EFFECT TO THE OBSERVATIONS OF THI S TRIBUNAL IN ITA NO. 833/DEL/2012 THE LD. CIT (A) HELD THAT FOR THE AY 2008-09 THE DISALLOWANCE ON ACCOUNT OF EXPENDITURE ON ESOP IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) WAS DELETED AS SUCH SINCE THE ORDER OF THE ITAT PREVA ILS ON THE MATTER AND HE PROCEEDED TO DELETE THE ADDITION OF T HE DISALLOWANCE. WE AGREE WITH THE LD. DR ON THIS ASP ECT AND HOLD THAT THE LD. CIT (A) SHOULD HAVE SET ASIDE THE MATTER TO THE FILE OF THE AO IN RESPECT OF THE AYS 2009-10 TO 2012-13 ALSO FOR VERIFICATION OF THE QUANTUM OF DEDUCTION CLAIME D BY THE ASSESSEE IN THE LIGHT OF THE DECISION OF THE SPECIA L BENCH OF ITAT IN THE CASE OF BIOCON LTD (SUPRA) AND ALLOW TH E DEDUCTION 6 ITA NOS. 568 TO 572/DEL/2015 FOR DISCOUNT ON SHARES UNDER THE ESOP AS PER THE DE CISION OF THE SPECIAL BENCH OF ITAT AFTER GIVING ADEQUATE OP PORTUNITY TO THE ASSESSEE OF BEING HEARD. 7. WITH THIS VIEW OF THE MATTER WE HOLD THAT THE F INDING OF THE LD. CIT (A) IN RESPECT OF THE AY 2008-09 IS JUS TIFIED AND HAS TO BE UPHELD WHEREAS IN RESPECT OF THE AYS 2009-10 TO 2012- 13 THE SAME CANNOT BE SUSTAINED AND THE ISSUE HAS T O BE SET ASIDE TO THE FILE OF THE AO FOR VERIFICATION OF THE QUANTUM OF DEDUCTION CLAIMED BY THE ASSESSEE IN THE LIGHT OF T HE DECISION OF THE SPECIAL BENCH OF ITAT IN THE CASE OF BIOCON LTD (SUPRA) AND ALLOW THE DEDUCTION FOR DISCOUNT ON SHARES UNDER TH E ESOP AS PER THE DECISION OF THE SPECIAL BENCH OF ITAT. 8. IN THE RESULT ITA NO. 568/DEL/2015 IS DISMISSED AND ITA NOS. 569 TO 572/DEL/2015 ARE ALLOWED FOR STATISTICA L PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 09.11.2017 SD/- SD/- (G.D. AGRAWAL) (K. N. CH ARRY) PRESIDENT JUDICIAL MEMB ER DATED: 09.11.2017 *KAVITA ARORA 7 ITA NOS. 568 TO 572/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI