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Dy. Commissioner of Income Tax Circle–8 (1) , Mumbai Versus M/s. Gebbs Healthcare Solutions P. Ltd.

2016 (2) TMI 511 - ITAT MUMBAI

Claim of deduction under section 10B - Held that:- the issue in dispute is squarely covered in favour of the assessee by the orders of the Tribunal in assessee’s own case for preceding assessment years. From the material on record, we find that this is a recurring dispute between the assessee and the Department right from the assessment year 2003–04. The Assessing Officer in the preceding assessment years had disallowed assessee’s claim of deduction under section 10B on the very same reason whic .....

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the Department preferred appeals before the Tribunal. However, the Tribunal upheld the decision of the learned Commissioner (Appeals) by . dismissing the appeal by the Department in respect of all these assessment years. Thus we uphold the decision of the learned Commissioner (Appeals) in allowing assessee’s claim of deduction under section 10B.- Decided in favour of assessee

MAT - Exclusion of income of SEZ Unit while computing book profit under section 115JB - Held that:- Taking in .....

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r has treated the amount as deemed dividend is both the companies have some common shareholders cannot be a reason for treating the amount as deemed dividend under section 2(22)(e). As held by the learned Commissioner (Appeals) since the Assessing Officer has failed to establish that assessee is the beneficial shareholder or even a shareholder, provisions of section 2(22)(e) cannot be applied. Also the issue in dispute is squarely covered in favour of the assessee by the decision of the Hon'ble .....

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y the Department is directed against the order dated 20th February 2014, passed by the learned Commissioner (Appeals)-16, Mumbai, for the assessment year 2009-10. 2. In grounds no.1 and 2, the Department has challenged the decision of the learned Commissioner (Appeals) in allowing assessee s claim of deduction under section 10B of the Income Tax Act, 1961 (for short "the Act"). 3. Briefly stated the facts are, assessee a company is engaged in the business of providing BPO services in t .....

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nd its business got transferred to the assessee with all assets and liabilities as a going concern. For the assessment year under consideration, assessee filed its return of income claiming deduction of an amount of ₹ 6,24,65,464 under section 10B of the Act in respect of profit earned from its SEEPZ unit. In the course of assessment proceedings, the Assessing Officer found that assessee s claim of deduction under section 10B of the Act in the assessment year 2008-09 was rejected by the As .....

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t was also submitted that the Tribunal has upheld assessee s claim of deduction under section 10B while dismissing Department s appeal in assessment year 2003-04 to 2006-07. Though, the Assessing Officer did not dispute the fact that assessee s claim of deduction under section 10B was allowed by the Tribunal in the preceding assessment years but observing that the Department has challenged the decision of the Tribunal in appeal preferred before the Hon'ble Jurisdictional High Court to mainta .....

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s relied upon the same and allowed assessee s claim of deduction. 5. We have considered the submissions of the parties and perused the material available on record. Learned Representative for both the parties admitted before us that the issue in dispute is squarely covered in favour of the assessee by the orders of the Tribunal in assessee s own case for preceding assessment years. From the material on record, we find that this is a recurring dispute between the assessee and the Department right .....

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er (Appeals) allowed assessee s claim of deduction under section 10B in the assessment years 2003-04 to 2006-07 and 2008-09. Against the orders of the learned Commissioner (Appeals), the Department preferred appeals before the Tribunal. However, the Tribunal upheld the decision of the learned Commissioner (Appeals) by . dismissing the appeal by the Department in respect of all these assessment years. In the latest order passed for assessment year 2008-09 in ITA no.6700/Mum./2011, dated 3rd April .....

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IT(A) were confirmed by the Tribunal while passing order in ITA Nos. 3370, 7738, 7196/Mum/2007-08 vide order dated 13.10.10. Therefore, we see no reason to interfere in the finding of ld. CIT(A) which are in consonance with the order of Tribunal for earlier 3 years i.e. from A.Y. 2003-04 to A.Y. 2005-06. Even the AO has mentioned in his order that in earlier year the deduction was denied by the AO and ld. CIT(A) has allowed the issue in favour of assessment order of ld. CIT has been confirmed by .....

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ct the ground of the department. 6. Facts being materially identical in the impugned assessment year, respectfully following the decision of the co-ordinate bench, as referred to above, we uphold the decision of the learned Commissioner (Appeals) in allowing assessee s claim of deduction under section 10B. Grounds no.1 and 2, are, therefore, dismissed. . 7. Grounds no.3 to 5, are on the common issue of exclusion of income of SEZ Unit while computing book profit under section 115JB of the Act. 8. .....

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come cannot be accepted. In this context, he relied upon the decision of the Hon'ble Supreme Court in CIT v/s Goetz India Ltd., [2006] 284 ITR 323 (SC). He also held that even on merit also, assessee s claim is not allowable since as per the provisions of the Act, MAT provisions are applicable to a company on the income derived from any business or services either from special economic zone unit or any other unit. Accordingly, he rejected assessee s claim made in the revised computation. Bei .....

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parties and perused the material available on record. Learned Representatives of both the parties agreed that the issue in dispute is squarely covered by the decision of the Tribunal, Mumbai Bench, in Genesys International Corporation Ltd. (supra). On a careful reading of the aforesaid decision of the co-ordinate bench of the Tribunal, it is found that the Tribunal, while deciding identical nature of dispute, has held as under:- 20. We have considered submissions of ld representatives of partie .....

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Economic Zone Act, 2005 w.e.f 10.2.2006, a new section 10AA has been inserted which provide exemption to the units located in SEZ. Section 2 of SEZ Act, defines SEZ as under: . (za)Special Economic Zone - means each Special Economic Zone notified under the proviso to sub-section (4) of section 3 and sub-section(1) of section 4(including Free Trade and Warehousing Zone) and includes an existing Special Economic Zone 21. It is evident from above that an existing SEZ unit will also be governed by S .....

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o observed that by the SEZ Act, sub-section (6) to section 115JB was also inserted providing that provisions of section 115JB shall not apply to the income accrued or arisen on or after 1.4.2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone, as the case may be. Hence, income of units located SEZ will not be included while computing book profit for the purpose of MAT as per section 115JB(6) of the Act. In view of above, w .....

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n view of sub-section(6) of the Act. The contention of ld D.R. that assessee will not be entitled to get the benefit u/s.115JB(6) of the Act as assessee has claimed deduction u/s.10A of the Act is to be rejected for the reason that section 115JB (6) does not refer section 10A or section 10AA but it only refer that provisions of section 115JB will not apply to the income accrued or arisen on or after 1.4.2005 from any business carried on in an unit located in SEZ. Hence, we are of the considered .....

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to have effect in respect of an previous year relevant to the assessment year commencing on or after the 1st day of April, 2012. …. …… 22. Hence, we hold that authorities below were not justified to include the book profit in respect of SEZ unit at Mumbai of the assessee while computing book profit u/s.115JB of the Act for assessment year 2008-09. Therefore, we reverse the orders of authorities below by holding that income relating to SEZ unit at Mumbai is to be excluded wh .....

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eferred to above, we uphold the order of the learned Commissioner (Appeals) by dismissing the ground raised by the Department. 11. Grounds no.6 and 7 relate to deletion of addition of deemed dividend of ₹ 4,93,765, made by the Assessing Officer under section 2(22)(e). . 12. Briefly stated the facts are, in the course of assessment proceedings, the Assessing Officer verifying the balance sheet of the assessee as on 31st March 2009, noted that the amount of advance received has increased fro .....

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ain why the amount received should not be treated as deemed dividend under section 2(22)(e). Though, the assessee made detail submissions explaining the reason why the amount of ₹ 4,93,767, cannot be treated as deemed dividend under section 2(22)(e), but the Assessing Officer did not find merit in the submissions of the assessee. He observed that as both the assessee company and GTL, are having common shareholders the conditions of section 2(22)(e) are satisfied along with other conditions .....

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essee is not a shareholder of GTL. Further, the amount of ₹ 4,93,765, cannot be considered to be in the nature of loan or advance as it is pursuant to transfer entry passed by the order of the Hon'ble Jurisdictional High Court consequent to demerger of BPO division of GTL. The learned Commissioner (Appeals), therefore, relying upon the decision of the Tribunal, Mumbai Special Bench, in ACIT v/s Bhaumik Colour Pvt. Ltd., [2009] 27 SOT 270 (Mum.)(SB) and the decision of the Tribunal, Ind .....

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