9911796707
TMI Blog2012 (11) TMI 1210X X X X Extracts X X X X X X X X Extracts X X X X ..... common ground as taken by the assessee are laid down as under: "1. The learned CIT(A) erred in not holding that the notice issued u/s 148 is without jurisdiction and therefore proceedings for assessment are illegal and invalid and consequently the order of assessment is void, ab initio. 2. The learned CIT(A) erred in holding that there was reason to believe that income had escaped assessment. 3. The learned CIT(A) erred in not holding that notice u/s 148 was issued only for purpose roving and fishing enquiries. 4. The learned CIT(A) erred in holding that notice issued u/s 148 2was valid with proper sanction. 5. The learned CIT(A) erred in not admitting the affidavit of Mr. Rakesh P. Sindher. 6. The learned CIT(A) erred confirming the addition of ₹ 66935376/-. 7. The learned CIT(A) erred in not allowing the deduction u/s 10B. 8. The learned CIT(A) erred in not allowing any expenses incurred. 9. The learned CIT(A) erred in not following the order of the I.T.A.T. for assessment year 2004-2005. On the ground that the factual parameters for this year are different from 2004- 2005. 10. The learned CIT(A) erred in stating that letter dated 04/08/2003 written by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computer software business in the name of M/s Jai Hari Softech, Nagpur. During the year under consideration, the assessee has shown total receipt of ₹ 96.4%. The entire profit has been shown as exempt under section 10B of the Income-tax Act, 1961. A survey conducted under the business premises of the above referred assessee was conducted on 07-03-2007 by the Investigation wing of the department. During the course of survey it was revealed that during the period from 1999-2000 to 2003-04 the assessee has shown to have received a total consideration of 55,94,054 US Dollars (approx ₹ 26.66 crores) against the export to M/s Alpha Impex Hongkong. The assessee has also claimed exemption under section 10B of the Income-tax Act, 1961 as an 100% export oriented unit. The assessee has stated that it was exporting computer software to the above referred firm during the above years. The exemption claimed under section 10B has been allowed except for the assessment year 2004-05 wherein it was disallowed as the assessment was passed as an ex-parte under section 144 of the Act. The disallowance made for the assessment year 2004-05 has been confirmed by the CIT(A) II Nagpur vide his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961 in the case of assessee for the assessment year 2001- 02." 3.1 Similar type of reasons were recorded for reopening the assessment in the assessment year 2002-2003 and 2003-2004. In the assessment proceedings initiated u/s 147, the Assessing Officer sought to disallow deduction u/s 10B of the Act as according to him the assessee was approved by Inter Ministerial Standing Committee appointed by the notification of the Government of India in the Ministry of Industries vide gazette Notification No.S.O.117(E) dated 22/02/1993 while as per section the undertaking must have been approved by the Board appointed in this behalf by the Central Government and, accordingly the Assessing Officer took the view that the exemption u/s 10B is not available. The Assessing Officer also took note of the finding of the survey team and observed that the assessee has diverted its sales to its in-laws and sister concern in the form of interest free loans, the profit earned are unrealistic almost 90% while leading software companies are showing profit @25%. The assessee has shown to have developed a project known '19-Scribe Alias X 2' was a software designed to automise the work flow of medical t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the one hand and doubting exports on the other is, therefore, distinguishable. 8.4 The appellant has made a submission that the amounts of Foreign Inward Remittance cannot be brought to tax u/s 68. This has no merit. The appellant has not established that the transaction purported to be export is genuine. There is no transparency in the nature of transaction as discussed in the foregoing paragraphs. Since the amounts have been credited to the books of the assessee, provisions of section 68 have been rightly invoked by the Assessing Officer. As regards the alternate contention of the appellant that expenses may be allowed against income brought to tax u/s 68. There is no case made out that the expenses have genuinely been incurred as these claims have been made against purported exports, which have been held to be non genuine. Therefore, the findings in the assessment order are upheld." 4. The learned A.R. before us vehemently contended that deduction u/s 10B has mainly been denied by the Assessing Officer on the basis of the report of the survey team. The assessee has duly replied each and every finding given by the survey team. On the similar basis, the exemption u/s 10B was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g should be kept in abeyance until further orders - Instruction : No. 1/2006, dated 31-3-2006." 4.1 It was pointed out that the Misc. Application filed by the Department was also dismissed by the Tribunal vide order dated 25/07/2011. The learned A.R. drawn our attention to page No. 63 to 65 of the paper book pointing out that the assessee has submitted point-wise reply to the Assessing Officer mentioning therein the details of approved plant & machinery. The Softex Form has been certified by the assessee as per the advice of the RBI. No person except the RBI has any power to make any change in the contents and/or Form of Softex at any point of time. The assessee does not have any record showing for rejected Softex Forms are concerned except the correspondence and letters exchanged between the assessee and the importer. The copy thereof was duly filed by the Assessing Officer. The letter dated 30/01/2007 was issued by Assessment. Director, STPI, Maharashtra just to expedite the proceedings initiated by the ACIT, Nagpur. It was not an independent letter seeking any information by STPI. Under para 6, Addl. Director, STPI has clearly stated that the letter dated30/01/2007 is nothing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were bogus. Referring to page No. 71 of the paper book, which contained a letter in reply to RTI application dated 15/05/2012, it was pointed out that this letter clearly states that the CIT(A) under para 5.6 of its order has wrongly mentioned that the assessee has filed a letter dated 04/08/2003 addressed to the Jt. Commissioner (Customs & Excise) while this letter was never filed by the assessee but was the part of the remand report of the Assessing Officer dated 02/11/2009. The Tribunal has given clear cut finding in the assessment year 2004-2005 that the sales are genuine. Thus there remains no scope to take a view from the different one which has been taken by the Tribunal. The facts remain the same in all the assessment years. Apparent is real, onus is on the person who alleges the apparent is not real. For this proposition of law, reliance was placed on the decision of Hon'ble Supreme Court in the case of Durga Das Rawat Mal 87 ITR 369. 5. The learned D.R., on the other hand, vehemently contended that the facts involved in this year are different as compared to assessment year 2004-2005. On a query from the Bench that the assessment in the years have been reopened onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee for the assessment year 2004-2005 and ultimately the Tribunal in I.T.A. No.159/NAG/08 vide its order dated 06/03/2009 took the view after looking into the totality of the facts that the assessee has duly established the genuineness of export of software by it during the year under consideration by holding as under: "We have carefully considered the arguments of both the sides and perused the material placed before us. The CIT(Appeals) has sustained the disallowance of exemption u/s 10B mainly on the basis of finding in the survey report and has extensively quoted the same from page 3 to 5 of his order. The learned counsel for the assessee explained each and every finding in the survey report. The learned D.R has not controverted the explanation of the learned counsel for the assessee with reference to the issues raised in the survey report. The learned CIT(Appeals) has also mentioned the AO's report that on visit of assessee's premises only one lady was found sitting at the reception. It was explained by the learned counsel that the assessee's business of export of software is already closed in March, 2004 and there is no further export there after. The visit by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO disallowed the claim of the assessee on the basis of mere presumption and suspicion. We, therefore, accept the assessee's appeal and direct the AO to allow deduction u/s 10B of the I.T. Act amounting to ₹ 14,55,227/- In the result, assessee's appeal is allowed." 6.1 Against this decision of the Tribunal, the Revenue filed the Misc. Application, which was also dismissed by the Tribunal vide its order dated 25/07/2011. The Tribunal has given a finding of fact that the assessee has established the genuineness of the export of the software. The facts involved in all these years are also the same. All these years have been reopened by the Assessing Officer on the basis of survey conducted in the premises of the assessee on 07/03/2007 by Investigation Wing of the Department and also the fact that the disallowance of exemption u/s 10B has been made in the assessment year 2004-2005, which was confirmed by the CIT(A). thus, in our opinion, the basis of the reopening of all these assessment years is the disallowance made by the Assessing Officer in the assessment year 2004-2005 as well as their findings given in the survey report. We also noted that along with each and every inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 3rd January 2007 to the said STP Unit was to expedite proceedings initiated by your Office and nothing else. In fact, it is nothing but an offshoot of Letter No. ITO(Inv.)/NGP/JHS/2006-07 dated 13.12.06 & Letter No. ITO(Inv.)/NGP/JHS/2006-07 dated 21.12.06 received by us from the Income Tax Officer (Inv.), Nagpur. As regards SOFTEX forms certified by our Office and the nature of information furnished by M/s Jai Hari Softech, we wish to state that certification of the said forms was done by the then concerned Officials in conformity with the requirements of SOFTEX forms as already explained in Para No.2 above." 6.2 In view of this fact, we do not find that there are any difference of facts as compared to the assessment year 2004-2005 and in the assessment year 2004- 2005 this Tribunal has categorically held that the assessee has duly established the genuineness of the export of the software by it during the year under consideration. The decision of coordinate Bench is binding on us. Respectfully following the said decision, we set aside the order of CIT(A) in all the years and thus allow the ground No. 5 to 13 of the assessee and delete the addition made by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed as the assessment was passed as an ex-parte under section 144 of the Act. The disallowance made for the assessment year 2004-05 has been confirmed by the CIT(A) II Nagpur vide his order dated 27/11/2007. For development and sale of the computer software's the assessee has to follow certain guidelines issued by the Software Technology Parks of India, a government of India autonomous society. They were not followed by assessee as can be proved by the STPI vide its letter No. STP/N.GEN/2006-07/5328 dated 03.01.2007 to the assessee by a letter the STPI asked Shri Jugalkishore Maniyar to furnish certain information with reference to the export certified by the STPI. The letter is issued certain information with reference to the export certified by the STPI. The letter is issued as late as 03.01.2007 when the business of the assessee of the export of software has discontinued as per the version of the assessee asking for the details as 07.03.2007 by STPI. Itself means that there was no such business of software done by the assessee as it is seen that the assessee is showing net profit as 90% and above from this business which is not possible at any time of business. During the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... izing the case in detail. No new facts are being found but the assessment has been reopened due to change in opinion on the same very facts. From the reasons recorded, it was contended that the Assessing Officer has merely acted upon a letter stated to have been addressed by STI dated 03/01/2007, the contents of which have also been quoted by the Assessing Officer in the reasons to believe. The Assessing Officer himself had not come to a definite conclusion of escapement of income but on the contrary has went upon certain information alleged to have been received from a foreign source. It was submitted that merely because some other authority had issued a letter, it would not constitute any reason to believe so for as reassessment proceedings are concerned. The Assessing Officer has to come to a definite satisfaction about the escapement of income on his own and even the opinion given by his own superior could not be sufficient to initiate reassessment proceedings. Reliance was placed on the decision of Hon'ble Supreme Court in the case of CIT vs. Kelvinator India 320 ITR 561 (SC). 9. The learned D. R., on the other hand, relied on the orders of the authorities below. 10. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
