Vision 2K + Inc, Hyderabad v. CIT, Hyderabad

ITA 696/HYD/2010 | 2005-2006
Pronouncement Date: 21-01-2011 | Result: Allowed

Appeal Details

RSA Number 69622514 RSA 2010
Assessee PAN AACFV4642H
Bench Hyderabad
Appeal Number ITA 696/HYD/2010
Duration Of Justice 8 month(s) 15 day(s)
Appellant Vision 2K + Inc, Hyderabad
Respondent CIT, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 21-01-2011
Date Of Final Hearing 12-01-2011
Next Hearing Date 12-01-2011
Assessment Year 2005-2006
Appeal Filed On 06-05-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI G.C. GUPTA VICE PRESIDENT AND SHRI AKBER BASHA ACCOUNTANT MEMB ER ITA NO.696/HYD/10 : ASST. YEAR: 2005-06 VISION 2K + INC HYDERABAD. (PAN:AACFV 4642 H) VS ACIT CIRCLE-4 (1) HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CHAITANYA KUMAR RESPONDENT BY : SHRI V. SRINIVAS O R D E R PER AKBER BASHA ACCOUNTANT MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED UNDER SECTION 263 OF THE ACT BY THE COMMISSIONER O F INCOME- TAX HYDERABAD DATED 26-03-2010 AND IT PERTAINS TO TH E ASSESSMENT YEAR 2005-06. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 30-6 -2005 DECLARING NIL INCOME AFTER CLAIMING EXEMPTION OF RS. 1 72 99 943/- UNDER SECTION 10B OF THE ACT. THE ASSESSING OFFICER COMPLETE D THE ASSESSMENT UNDER SECTION 143(3) ON 31-12-2007 ACCEPTING THE INCOME RETURNED BY THE ASSESSEE. LATER THE ADMINISTRATIVE COM MISSIONER EXAMINED THE ASSESSMENT RECORDS OF THE ASSESSEE FOR THE ASSESSMEN T ITA NO. 696/HYD/20 10 VISION 2K + INC H YD. ================= 2 YEAR UNDER CONSIDERATION AND FOUND THAT THE RELEVANT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IS BOTH ERRONEOUS AND PREJU DICIAL TO THE INTERESTS OF REVENUE AND ACCORDINGLY HE ASSUMED HIS JUR ISDICTION UNDER SECTION 263 OF THE ACT AND ISSUED A NOTICE SETTING OUT TH E GROUNDS OF ERROR AND PREJUDICE AND CALLING UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY THE ASSESSMENT SHOULD NOT BE REVISED OR SET ASIDE. TH E CIT NOTICED THAT THE ASSESSEE HAS NOT OBTAINED STATUTORY APPROVAL FR OM THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERNMENT AS REQUIRED UNDER SECTION 14 OF THE INDUSTRIES( DEVELOPMENT AND REGULATIO N) ACT 1951 FOR CLAIMING THE STATUS AS 100% EXPORT ORIENTED UNDERT AKING (EOU IN SHORT). THEREFORE THE EXEMPTION OF RS.1 72 99 943/ - CLAIMED BY THE ASSESSEE AND ALLOWED BY THE ASSESSING OFFICER UNDER SECTION 10 B OF THE ACT MAY NOT BE ADMISSIBLE. HE OPINED THAT THE ASSESSING OF FICER OMITTED TO EXAMINE THIS MATERIAL POINT AND ALLOWED ITS CLAIM WITHOUT APPLICATION OF MIND. IN RESPONSE TO THE NOTICE THE ASSESSEE SUBMITTED HIS EXPLANATION TO THE CIT STATING THAT THE ASSESSEE IS ENGAG ED IN THE BUSINESS OF MEDICAL TRANSCRIPTION AND TRANSCRIBING FOR US CL IENT AND THE ACTIVITY MEDICAL TRANSCRIPTION IS COVERED UNDER NOTIFIED INFORMATION TECHNOLOGY ENABLED PRODUCTS OR SERVICE UNDER SECTION 10A/10B/80HHC OF THE ACT. THE ASSESSEES UNIT IS REGISTERED WITH STPI WHICH IS SOFTWARE TECHNICAL PARK NOTIFIED AS 100 PER CENT EXPORT ORIENTED SCHEME FOR UNDERTAKING SOFTWARE DEVELOPMENT FOR EXPORT USING DATA COMMUNICATION LINK. HENCE IT IS SUBMITTED THAT THE ASSESSEE UNIT GOT THE APPROVAL OF STPI WHICH IS CONSTRUED AS APPROVED B OARD AS 100 PER CENT EOU AND THE UNIT HAS COMPLIED WITH ALL THE CONDITI ONS LAID DOWN UNDER SECTION 10B OF THE ACT. THE ASSESSEE HAS ALSO RELIED O N THE DECISION OF THE JURISDICTIONAL TRIBUNAL IN THE CASE OF SMT. K. SUDHARANI HYDERABAD VS. INCOME-TAX OFFICER WARD-1 HYDERABAD (ITA ITA NO. 696/HYD/20 10 VISION 2K + INC H YD. ================= 3 NO.1750/HYD/2008 DATED 30-10-2008 IN SUPPORT OF ITS CONTENTION. THE CIT AFTER EXAMINING THE EXPLANATION OF THE ASSESSEE HEL D THAT THE LATER DECISION OF THE TRIBUNAL IN THE CASE OF SUDHARANI HAS BEEN RENDERED IN OVERSIGHT OF THE EARLIER DECISION OF THE TRIBUNAL IN T HE CASE OF INFOTECH ENTERPRISES LIMITED REPORTED IN 85 ITD 325 AND HE FO LLOWED THE DECISION IN THE CASE OF INFOTECH ENTERPRISES LIMITED (SUPRA) AND H ELD THAT THE ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION UNDER SECTION 10B O F THE ACT AS IT HAS NOT OBTAINED THE STIPULATED STATUTORY APPROVAL AS 100 EOU BY THE BOARD APPOINTED IN THIS BEHALF BY THE CENTRAL GOVERN MENT UNDER SECTION 14 OF THE INDUSTRIES (DEVELOPMENT AND REGULATION) AC T 1951. HE HELD THAT THE ASSESSING OFFICER HAD ALLOWED THE ASSESSEES CLAIM O F EXEMPTION WITHOUT APPLICATION OF MIND ON ERRONEOUS ASSUMPTION O F FACTS. SUCH OMISSION ON HIS PART HAS RENDERED THE ASSESSMENT NOT ONLY E RRONEOUS BUT ALSO PREJUDICIAL TO THE INTERESTS OF THE REVENUE AS HELD IN THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MALAB AR INDUSTRIAL COMPANY LIMITED VS. CIT (243 ITR 83) AND THEREFORE T HE CIT SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO REDO THE SAME IN THE LIGHT OF HIS FINDINGS OBSERVATIONS AND DIRECTIONS MENTIONED IN HIS ORDER. AGGRIEVED BY THE ORDER OF THE COMMISSIONER THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT T HE ISSUE INVOLVED IN THIS APPEAL IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE CASE OF SUDHARANI (SUPRA). IT IS FURT HER SUBMITTED THAT THE ASSESSEE COMPANY SATISFIED ALL THE CONDITIONS ELIGIBLE F OR EXEMPTION UNDER SECTION 10B OF THE ACT AND HENCE THE ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS WHICH IS PREJUDICIAL TO TH E INTERESTS OF REVENUE. HENCE THE ORDER PASSED BY THE CIT IS TO BE CANCE LLED. ITA NO. 696/HYD/20 10 VISION 2K + INC H YD. ================= 4 5. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REP RESENTATIVE RELIED ON THE ORDER OF THE CIT. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IT IS ADMI TTED FACT THAT THE ASSESSEE HAS OBTAINED THE APPROVAL FROM STPI HYDERABAD AS 100% EOU. THE CITS FINDING IS THAT THE ASSESSEE IS NOT ELIGI BLE FOR RELIEF UNDER SECTION 10B OF THE ACT ONLY ON THE GROUND THAT 1 00% EOU UNDER STPI SCHEME CANNOT BE EQUATED WITH THE 100% EOU APPR OVED BY THE BOARD. SINCE WE HAVE ALREADY HELD IN THE CASE OF SUDH ARANI (SUPRA) THAT THE APPROVAL OF 100% EOU BY THE BOARD AND STPI IS ON E AND THE SAME AND HENCE THE ASSESSEE IS ELIGIBLE FOR EXEMPTION UNDER SE CTION 10B OF THE ACT. IT IS TO BE NOTED THAT THE VALIDITY OF AN ORDER UNDER SECTION 263 OF THE ACT HAS TO BE TESTED WITH REGARD TO THE POSITION OF LAW AS IT EXISTS ON THE DATE ON WHICH SUCH AN ORDER IS PASSED BY THE CIT. IN THE CASE UNDER CONSIDERATION IT IS CLEAR THAT ON THE DATE WHEN THE CIT PASSED HIS ORDER UNDER SECTION 263 OF THE ACT THE VIEW TAKEN BY THE ASSESSING OFFICER WAS IN CONSONANCE WITH THE VIEW TAKEN BY THE TRI BUNAL IN THE CASE OF SUDHARANI (SUPRA). IT IS SETTLED LAW THAT WHEN T WO VIEWS ARE POSSIBLE ON THE DATE OF THE ORDER PASSED BY THE COMMISSI ONER THE CIT SHOULD AGREE WITH THE VIEW TAKEN BY THE ASSESSING OFFICER WAS IN CONSONANCE WITH VIEW TAKEN BY THIS TRIBUNAL EVEN IF THERE HAS BEEN A LOSS OF REVENUE. HENCE POWERS UNDER SECTION 263 OF THE A CT CANNOT BE EXERCISED BY THE CIT. OUR VIEW IS FORTIFIED BY THE J UDGMENT OF DELHI HIGH COURT IN THE CASE OF CIT VS. HONDA SIEL POWER PRODUCTS PRIVATE LIMITED IN ITA NOS. 1376/2009 AND 1382/2009 DATED 5- 7-2010. IN VIEW ITA NO. 696/HYD/20 10 VISION 2K + INC H YD. ================= 5 OF THE ABOVE WE REVERSE THE ORDER OF THE CIT AND AL LOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE STAND S ALLOWED. ORDER PRONOUNCED IN THE COURT ON 21-01-2011. SD/- SD/- (G.C. GUPTA)) (AKBER BASHA) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 21-01-2011. COPY FORWARDED TO: 1. SHRI S. RAMA RAO ADVOCATE FLAT NO.102 SHRIYAS ELEGANCE DOOR NO.3-6-643 STREET NO.9 HIMAYATNAGAR HYDERABAD . 2. 3. 4.. 5. JMR* ACIT CIRCLE-4(1) HYDERABAD. CIT (A)-IV HYDERABAD. CIT AP. HYDERABAD. THE DR ITAT HYDERABAD.