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2022 (12) TMI 28 - AT - Income TaxDeduction u/s 80IA - profits and gains derived from telecommunication service in AY 2005-06 for the first time - assessee started providing telecommunication services before 01/04/1995 or thereafter - admission of additional evidences - DR submitted that to be eligible to claim the benefit of deduction, the primary requirement of section is that the undertaking starts providing telecommunication services on or after 01/04/1995 and documents on record suggest that the assessee had started services prior to 01/05/1995, hence, the assessee is not eligible to claim benefit of deduction u/s. 80IA(4) - One of the objection raised by the Department is that the assessee has not maintained separate books of account HELD THAT:- The Circular clarifies that the condition introduced by the Finance (No.2) Act, 2004 will not apply to undertakings which have started providing telecommunication services prior to 01-4-2004. Documents on record clearly show that the assessee started providing telecommunication services after 01/4/1995 but before 01/4/2004. Thus, even if the assessee’s undertaking is formed after merger/reconstruction, still the assessee would be eligible for deduction u/s.80IA of the Act in the light of CBDT circular There is no infirmity in the order of CIT(A) in coming to the conclusion that the assessee had started telecommunication services after 01/04/1995 and the assessee is eligible for deduction u/s. 80IA(4) of the Act. Additional Evidences - HELD THAT:- This case has travelled between Assessing Officer and the Appellate Authorities four times over a period of decade. Four times the assessment order has been passed. The issue that was considered time and again in assessment proceedings and the Appellate proceedings was the assessee’s eligibility to claim deduction u/s. 80IA with reference to assessee’s date of start of telecommunication services. Sufficient time was available to the Department to furnish these evidences. For the reasons best known to the Department these additional evidences which are factual and were very much in existence even during at the time of passing first assessment order for AY 2005-06 were not relied upon by the Department. Dehors, belated filing of these additional evidences, even if these additional documents are admitted, it would not make any material difference.As sale of pagers during FY 1994-95 has already been admitted by the assessee and the same has been reflected in the books of account. - the Revenue’s application for admitting additional evidences at this belated stage is rejected. Whether interest income and miscellaneous income earned by the assessee would be eligible for deduction u/s. 80IA? - We find that similar issue had come up before the Tribunal in the case of BSNL[2015 (12) TMI 1531 - ITAT DELHI] in terms of non- obstinate clause used in section 80IA(2A), deduction for telecommunication services is available in respect of “profits of eligible business” and is not restricted to “profits derived from eligible business” as mentioned in section 80IA(1) - The aforesaid findings of the Tribunal were affirmed by the Hon’ble Delhi High Court [2016 (8) TMI 270 - DELHI HIGH COURT] - As observe that the DRP in directions dated 21/09/2017 for assessment year 2013-14 has observed that no SLP has been filed against the decision of Hon’ble Delhi High Court by the Revenue and allowed assessee’s claim of deduction u/s. 80IA of the Act in respect of other incomes. Respectfully following the decision of BSNL we direct the Assessing Officer to allow the benefit of deduction u/s. 80IA of the Act +in respect of interest Income as well as miscellaneous income. Ground No.2 of the assessee’s appeal is thus allowed. Charging of interest u/s. 234B is mandatory and consequential. We deem it appropriate to restore this issue back to the file of AO for charging interest in accordance with the provisions of section 234B - Ground No.3 of the appeal is thus, allowed for statistical purpose.
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