Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2023 (12) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 347 - HC - Income TaxDeduction u/s 80IA - assessee claimed tax holiday u/s 80IA at the rate of 100% of the profits earned up until AY 2011-12 and, thereafter, at the rate of 30% between AY 2012-13 and AY 2016-17 - Whether expansion of services amounted to setting up a new and independent undertaking? - AO disallowed the tax holiday claimed for the AY in issue, albeit, on a proportionate basis (i.e., in proportion to the contribution of each segment) pivoted on the rationale that a new and separate undertaking had come into existence with respondent/assessee having acquired, in 2008, NLD and ILD Licenses - According to the Tribunal, in 2002-03, assessee had commenced its business by providing data transmission and internet services, which continued even after it acquired, in 2008, NLD and ILD licenses - HELD THAT:- We find that the Tribunal has noted that there was no material brought on record by the appellant/revenue to back its claim that a separate undertaking had been established to provide the NLD and ILD services offered by the respondent/assessee. There was also, according to the Tribunal, no case set up or established by the appellant/revenue there was reconstitution of the existing business.According to the Tribunal, in 2002-03, the respondent/assessee had commenced its business by providing data transmission and internet services, which continued even after it acquired, in 2008, NLD and ILD licenses. The only difference that was brought about, which is something that was noticed by the Tribunal, is that the respondent/assessee, with the acquisition of two new licenses, was now providing private internet services in a secure form to a closed group of users. In our opinion, given the aforementioned findings of fact returned by the Tribunal, it cannot be said that a new undertaking had come into existence after 31.03.2005. The respondent/assessee was and continued to provide internet services. The only difference was that it expanded its business footprint by it adding to it a niche consumer base. The legislative policy of providing deduction u/s 80IA is to give leg-up to certain undertakings, which are capital intensive. The attempt of the AO to excise a portion of the benefit, in our opinion, cannot pass muster upon perusal of the plain language of Section 80IA(4)(ii) of the Act. Thus, according to us, no interference is called for with the impugned order passed by the Tribunal. According to us, no substantial question of law arises for our consideration.
|