DCIT, New Delhi v. M/s. Calance Software P. Ltd., New Delhi

ITA 771/DEL/2013 | 2009-2010
Pronouncement Date: 11-11-2014 | Result: Dismissed

Appeal Details

RSA Number 77120114 RSA 2013
Assessee PAN AACCC5176A
Bench Delhi
Appeal Number ITA 771/DEL/2013
Duration Of Justice 1 year(s) 9 month(s) 4 day(s)
Appellant DCIT, New Delhi
Respondent M/s. Calance Software P. Ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 11-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 11-11-2014
Date Of Final Hearing 03-11-2014
Next Hearing Date 03-11-2014
Assessment Year 2009-2010
Appeal Filed On 06-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : B NEW DELHI AND SHRI J.SUDHAKAR REDDY J.M AND SHRI C.M. GARG JM ITA NO: 771/DEL/2013 AY : - 2009-10 DCIT VS. CALANCE SOFTWARE PVT. LTD. CIRCLE-3(1) 13/34 & 36 NEW DELHI. DDA SHOPPING COMPL EX NANGAL R AYA NEW DELH I 110 046 (PAN AACCC5176A) (APPELLANT) (RESP ONDENT) APPELLANT BY :S HRI P.C. YADAV ADVOCATE RESPONDENT :SM T PARMINDER KAUR SR. DR O R D E R PER J.SUDHAKAR REDDY ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE DIRE CTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI DATED 1.11 .2012 FOR THE ASSESSMENT YEAR 2009-10. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENG AGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT I.T. SERVICES AND MANPOWER PLACEMENT. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ORIGINAL LY ON 30.9.2009 DECLARING INCOME OF RS. 20 636/- WHICH WAS REVISED ON 18.6.2010 DECL ARING NIL INCOME. THE CASE OF THE ASSESSEE COMPANY WAS SELECTED FOR SCRUTINY AND NECESSARY STATUTORY NOTICES WERE DULY SERVED ON THE ASSESSEE COMPANY. DURING TH E COURSE OF ASSESSMENT THE AO OBSERVED THAT THE ASSESSEE HAS CLAIMED EXEMPTION U/S 10A OF RS. 60 01 858/- ON ITA 771/DEL/2013 AY 2009-10 DCIT VS. CALANCE SOFTWARE PVT. LTD. 2 PROFIT FROM BUSINESS AND GAINS OF RS. 23 46 491/- A ND SHOWN NET TAXABLE INCOME OF RS. (-) 36 34 731/- AND THIS LOSS HAS BEEN CARRIED FORWARD TO NEXT YEAR. THE AO WAS OF THE VIEW THAT AS PER THE PROVISIONS OF SECTION 1 0A OF THE I.T. ACT THE DEDUCTION IS AVAILABLE ONLY FOR THE UNIT ENTITLED FOR DEDUCTION U/S 10A AND THE PROFIT OF OTHER UNIT OR ANY OTHER INCOME IS NOT ELIGIBLE TO THE DEDUCTIO N. THEREFORE NO DEDUCTION U/S 10A IS ALLOWABLE ON NON STPI UNIT AND HE THEREFORE ADD ED RS. 1 32 695/- TO THE TOTAL INCOME OF THE ASSESSEE. THE AO FURTHER OBSERVED THA T THE ASSESSEE HAS CLAIMED BUSINESS LOSS OF RS. 36 34 730/-. HE THEREFORE DI SALLOWED THE SAME TO BE CARRIED FORWARD. THE ASSESSMENT WAS COMPLETED U/S 143(3) V IDE ORDER DATED 27.12.2011. 3. ON APPEAL THE FIRST APPELLATE AUTHORITY APPLIED THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF YOKO GAWA INDIA LTD. 341 ITR 385 (KARNATAKA) AND ALLOWED THE APPEAL OF THE ASSES SEE. 4. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US ON THE FOLLOWING GROUNDS :- 1. WHETHER THE LD. CIT(A) HAS ERRED ON FACTS A ND IN LAW IN DELETING THE ADDITION OF RS. 1 32 695/- ON ACCOUNT OF DEDUCT ION U/S 10A IGNORING THE FACTS THAT AS PER THE PROVISIONS OF THE S ECTION 10A THE DEDUCTION IS AVAILABLE ONLY FOR THE UNIT ENTITLED F OR THE SAME. 2. WHETHER THE LD. CIT(A) HAS ERRED ON FACTS AND IN LA W TO ALLOW CARRY FORWARD OF LOSS OF RS. 36 34 730/- (A) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW THE SAME CANNOT BE CARRY FORWARD AS PER THE PROVISIONS OF SECTION 10A THE DEDUCTION IS AVAILABLE ONLY FOR THE UNIT ENTITLED FOR THE SAME. 5. WE HAVE HEARD SMT. PARMINDER KAUR SR. DR ON BEHALF OF THE REVENUE AND SHRI P.C. YADAV ADVOCATE ON BEHALF OF THE ASSE SSEE. ITA 771/DEL/2013 AY 2009-10 DCIT VS. CALANCE SOFTWARE PVT. LTD. 3 6. ON A CAREFUL CONSIDERATION OF THE FACTS A ND CIRCUMSTANCES OF THE CASE AND A PERUSAL OF THE PAPERS ON RECORD AND THE ORDER S OF THE AUTHORITIES BELOW WE HOLD AS FOLLOWS :- 6.1. THE SOLE ISSUE THAT ARISES FOR OUR CONSID ERATION IS WHETHER THE AO IS RIGHT IN DISALLOWING THE CARRY FORWARD BUSINESS LOS S AND UNABSORBED DEPRECIATION OF NON STPI UNIT FOR THE REASON THAT THE SAME HAS TO BE SET OFF AGAINST THE PROFITS FROM STPI UNIT WHICH IS ELIGIBL E FOR EXEMPTION U/S 10A OF THE ACT. 6.2 THE HONBLE KARNATAKA HIGH COURT IN THE CA SE OF YOKOGAWA INDIA LTD. (SUPRA) HAS HELD THAT THE AO CANNOT SET OFF THE UN ABSORBED LOSSES AND UNABSORBED DEPRECIATION OF NON STPI UNIT AGAINST TH E INCOME OF 10A UNIT U/S 72. THIS JUDGMENT HAS BEEN APPLIED BY THE LD. C IT(A) AND RELIEF WAS GRANTED TO THE ASSESSEE. THE LD. DR COULD NOT CITE ANY CONTRARY DECISION. 7. UNDER THESE CIRCUMSTANCES WE UPHOLD THE ORDE R OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS APPEAL OF THE REVENUE. 8. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH NOVEMBER 2014. SD/- SD/- (C.M.GARG) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 11 TH NOVEMBER 2014 *VEENA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2. RESPONDENT; 3. CIT; ITA 771/DEL/2013 AY 2009-10 DCIT VS. CALANCE SOFTWARE PVT. LTD. 4 4. CIT(A); 5. DR; 6. GUARD FILE BY ORDER ASST. REGISTRAR