TMI Blog2017 (11) TMI 1541X X X X Extracts X X X X X X X X Extracts X X X X ..... AM And Ms. Suchitra Kamble, JM For The Assessee : Sh. Ashwani Kumar, Sh. Sudhindra Jain Sh. Alok Kumar Jain, CAs For The Revenue : Sh. Amrit Lal, Sr. DR ORDER Per N. K. Saini, AM: This appeal by the assessee for the assessment year 2007- 08 is directed against the order dated 03.10.2011 of ld. CIT(A)-II, Dehradun and the other appeals of the assessee are directed against the separate orders dated 09.02.2012, 20.12.2011 and 30.11.2012 passed by the ld. CIT(A)-I, Dehradun for the assessment years 2008-09, 2009-10 and 2010-11 respectively. 2. Since the issue involved is common in all these appeals which were heard together so these are being disposed off by this consolidated order for the sake of convenience and brevity. 3. At the first instance, we will deal with the appeal in ITA No. 5856/Del/2011 for the assessment year 2007-08. Following grounds have been raised in this appeal: 1. The Learned Commissioner of Income Tax (Appeals) - II, Dehradun ( Ld. CIT(A) ) has erred on facts and in law in disallowing the claim of the appellant for deduction u/s 80-IC of the Income Tax Act, 1961 ( the Act ) and confirming the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion u/s 80IC of the Act amounting to ₹ 82,77,348/- and had set off brought forward loss (unabsorbed depreciation) of ₹ 3,51,250/-. The AO asked the assessee to justify the claim of deduction u/s 80IC of the Act. In response, the assessee had given the following explanation: Entitlement for deduction of profits u/s 80IC: 1. Activities of the company are covered under point 13 of Part C of the Fourteenth Schedule as mentioned in Sub- Section 2(b) of section 80IC. The said point reads as under: information and Communication Technology Industry, Computer Hardware, Call Centres. Activities of the company have been elaborated in Annexure A of our reply dated 14.09.2009 which are covered as above; 2. Operations of the company commenced after 7th Jan 2003 and before April 2012; Thus provisions of 80IC (2)(b)(ii) stand complied with; 3. Our works/operations are covered under point 13 of Annexure II as Thrust industries as per letter No. 1(10)/2001 - NER of Ministry of Commerce Industry dated 07.01.2003; 4. Our unit is located at Majra, Subhash Nagar (Opp. Transport Nagar), Dehradun; 5. Building map has been approved by MDD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents as may be derived by the assessee s client on time and material basis on off shore as well as on onsite assignments and the services of such contractor were provided by the assessee to its client after it signed a specific agreement which was called Work Order for each instance of a contractor being retained by the assessee s client for a period as agreed upon the assessee with its client and such contractor was required to perform tasks for the client in areas related to the Computer Software, Engineering and Consultancy. He further observed that those tasks would include (but may not be limited to) : software requirements study, systems analysis, systems design, system modeling, software development, software adaptation, test plan preparation, test data preparation, software testing, system quality assurance, documentation, systems development, training, systems maintenance and systems and as per the contract, the assessee had to make the payment of salaries and all related taxes for the contractor would be responsibility of the assessee. It was also agreed upon by the assessee s client that on selection of a contractor for an onsite assignment, the relevant work permi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ware. Thus, the only category which was left for examination in the 13th item of Part C of Fourteenth Schedule to the Income Tax Act, 1961 was Information Communication Technology Industry which implied that it had to be an industry of Information Communication Technology. He also pointed out that the term industry had not been defined in the scheme of Section 2 of the Act, however, various courts have interpreted the meaning of the term industry differently, depending upon the context in which the term had been used, a reference was made to the judgment of the Hon ble Supreme Court in the case of M/s Msco. Pvt. Ltd. Vs Union of India AIR (1985) (SC) 76 and 79 (Customs Act (52 of 1962) S-11N Notification dated 15.07.1977, wherein word industry has been defined as the place where the process of manufacture or production of goods is carried on and it did not in any event include hospitals, dispensaries or nursing homes. The AO was of the view that the supply of labour being computer skilled personnel by the assessee could not be held to be an industry in the sense it has been used in category 13 of Part C of the Fourteenth Schedule of the Act. He further observed that the lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... client as per their instructions and under the absolute control of the assessee s client. Accordingly, deduction claimed u/s 80 1C of the Act by the assessee was denied. 10. Being aggrieved the assessee carried the matter to the ld. CIT(A) and furnished the written submission which has been summarized by the ld. CIT(A) in para 4.2 of the impugned order which is reproduced verbatim as under: ( i) The appellant is engaged in the field of providing service to the Information and Communication Technology. Its personnel are engaged to work with the clients at premises of their choice for efficiency and maintaining confidentiality. The personnel so engaged are employees of the appellant in every respect, and they are deployed on the basis of contractual relationship between appellant and I.T. Company/ client (and not due to any contract between the I.T. Company/ client and the personnel deployed). The Id. AR has illustrated his point by referring to various contracts, copies of which have been placed on record. ( ii) The Id. AR objects to the AO's contention that the appellant activities cannot be termed as an industry . He has relied on the cases of Nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions also. 11. The ld. CIT(A) also asked the remand report from the AO who furnished the same vide report dated 07.07.2011 which has been incorporated by the ld. CIT(A) in para 4.3 of the impugned order, for the cost of repletion, the same is not reproduced herein. The assessee in his rejoinder protested the finding in the remand report by challenging the action of the AO and relied on the certain case laws. The ld. CIT(A) dealt with the contention of the assessee in para 4.4 of the impugned order which is reproduced verbatim as under: ( i) The contention that the Id. AO should have confined herself to offering comments on the documents and written contentions filed by the Id. AR and not carry out any enquiry is misplaced since the first appellate authority, or for that matter any category of appellate authority, is duty bound by law to assess the correct taxable income of any assessee. Towards this end, without violating the principles of natural justice, result of any fact finding may be utilized. It may be pertinent to mention that the report of the Id. AO was also handed over to the Id, AR for his comments. The Id, AR has utilized the opportunity provided to file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this context, the AO paid a surprise visit to the assessee's premises and on finding certain books of account, included the findings from them in his report. The appellant pleaded denial of opportunity to explain the books of account on which issue the Hon'ble Court agreed with the assessee. In the present case, the visit by the AO was not a surprise visit and the appellant has been given ample opportunity to rebut the findings of AO. Thus, this case also does not help the appellant. Similarly also in the case of Kishin Chand Chellaram vs. CIT AIR 1980 SC 2117 (relied upon by the Id. AR) the issue was of denial of opportunity to the appellant. Since in this case, as has been mentioned above, there is no denial of opportunity, this case also does not help the appellant. 12. The ld. CIT(A) held that the AO had not exceeded her brief. The ld. CIT(A) incorporated the written submissions of the assessee on the allowability of the claim u/s 80IC of the Act and also on the issues raised by the AO in the remand report, in para 4.4 of the impugned order, for the cost of repetition, the same is not reproduced herein. On merit of the case, the assessee furnished the wri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement services and (d) other information technology service activities. From the aforesaid it is clear that the service activities carried out by the appellant can be easily classified under one or more of the aforesaid heads of activities as specified in the said Paper issued by Government of India. Therefore, it is respectfully submitted that the Assessing Officer has failed to appreciate the nature of services provided by the appellant and the scope of services covered by the above Paper issued by the Government of India. 4.4 The Assessing Officer has alleged that the appellant company is carrying on the activity of 'Manpower Recruitment and Supplier'. It is respectfully submitted that the aforesaid allegation is misconceived and has arisen due to incorrect appreciation of the business model of the appellant company. As slated in paragraph 4.1 and 4.2 above, the appellant company provides different types of ICT services to its clients. The clients of the appellant company engage the appellant company for undertaking various projects in the field of ICT. The employees of the appellant meeting the specifications provided by the clients are assigned to various ICT rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant are technically skilled employees working on projects with clients of the appellant and thereby providing ICT service to the clients has not been disputed either in the Assessment Order or in the remand report. In view of the aforesaid, it is respectfully submitted that the appellant is not providing services of 'Manpower Recruitment and Supplier'. 4.8 The appellant is a company engaged in providing ICT services through technically skilled personnel. The employees of the appellant are. as per the practice followed in ICT industry, required to maintain confidentiality and are therefore often required to provide on-site services to their clients Further, the employees also work on projects involving various teams, and therefore, in order to maintain compatibility the appellant company is required to direct its employees to work as per specified parameters. This is the common practice prevailing in the ICT industry. It is respectfully submitted that the fact that the appellant provides onsite information and communication technology services cannot be interpreted to mean that the appellant is engaged in the business of 'body shopping' or is acting mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evelopment and Maintenance'. Therefore, no inference adverse to the appellant can be drawn from the allegations made by the Assessing Officer on a partial reading of the documents. Similarly reliance has also been placed on Form TR-6 for payment of service tax. It is respectfully submitted that such reliance is misplaced The registration under service tax is not determinative of the fact whether the appellant is entitled to claim deduction under Section 80IC of the Act or not. It is settled law that the definitions of terms in other statutes / enactments cannot be employed out of context for construction of the scope of such terms in another statute. This is particularly so, when the statute in question itself provides guidance for understanding the scope of the relevant term. In the present case, the Act read with the notification issued thereunder provides the scope information technology enabled products or services, as herein below. Hence, the treatment under other enactments cannot be resorted to. 4.12 The Assessing Officer has in paragraph 5.1.3 of the remand report placed reliance upon the website of the Ministry of Corporate Affairs and the Memorandum Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. Clause (i) of Explanation 2 under section 10A provides the definition of computer software as: ( i) computer software means - ( a) ( b) any customized electronic data or any product or service of similar nature, as may be notified by the Board... Attention at this point is invited to the Notification No. SO 890(E), dated 26.09.2000, issued by the Central Board of Direct Taxes (CBDT), wherein the Central Board of Direct Taxes has specified the following Information Technology enabled products or services, for the purpose of the said section: ( i) Back-office Operations; ( ii) Call Centres; ( iii) Content Development or Animation; ( iv) Data Processing; ( v) Engineering and Design; ( vi) Geographic Information System Services; ( vii) Human Resource Services; ( viii) Insurance Claim Processing; ( ix) Legal Databases; ( x) Medical Transcription; ( xi) Payroll; ( xii) Remote Maintenance; ( xiii)Revenue Accounting; ( xiv) Support Centres, and ( xv) Web-site Services. In view of the above, it is respectfully submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report that the auditor of the appellant has falsely reported that the appellant has commenced its operations in Dehradun from January, 2006. In this regard it is respectfully submitted that the appellant company was incorporated in 1986. However till the financial year 2003-04 the appellant had negligible operational presence in India, It was only in the year 2003-04 that there was change in the management of the company and efforts were initiated to expand operations in the field of ICT industry. Substantial investments were made in the subsequent financial years to establish the undertaking. In January 2006, the Software Technology Park Unit (STPU) at Dehradun commenced operations. It would be appreciated that the undertaking at Dehradun is a duly registered STPU providing ICT services. The registered office of the appellant was shifted to Dehradun as per the provisions of the Companies Act, 1956. It is respectfully submitted that the Assessing Officer has misconstrued this to mean shifting of the accounting operations to Dehradun in order to claim tax benefits under Section 80IC. 5.3 The Assessing Officer has, at paragraph 6.2 6.2.1 of the remand report, also contended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has travelled far beyond the scope of the direction issued by your Honor. 5.5 It is further respectfully submitted that the visit made by the Assessing Officer was without disclosing the statutory authority in exercise of which the visit was made. Further, the Assessing Officer has not disclosed the specific statutory provisions in exercise of which information was sought to be gathered during such visit. Therefore, the visit as well as the 'information' gathered during the visit, are bad in law and no reliance can be placed thereon. 5.6 There is no dispute that the Act confers wide powers on the Assessing Officer regarding, inter alia, discovery and production of evidence, search, calling for information, survey, collecting information, etc. There is also no dispute that the Assessing Officer has the necessary jurisdiction to exercise these powers in respect of the appellant. However, such powers are not absolute and unfettered, and cannot be exercised without having regard to the form, manner and restrictions prescribed in regard to exercise of these powers. The Assessing Officer has not disclosed the specific provisions of the Act under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided/consumed within the state, of Uttarakhand. Given the cross-border nature of the ICT industry and the services related thereto, such an interpretation would render the provisions of Section 80IC of the Act ineffective and otiose in so far as ICT sector services / activities are concerned. In this regard it is humbly submitted that the nature and services provided in the ICT industry cannot be limited by territory or geographical area. It is respectfully submitted that Section 80IC being a beneficial provision should not be subjected to narrow interpretation so as to deny the benefit to the appellant. The provisions of Section 801C should he interpreted widely to include in its ambit all services related to ITC industry, whether provided/consumed within Uttarakhand or outside. It would be appreciated that service providers in the ICT industry are required to provide both onsite and offsite services, depending upon the nature of the projects and the requirements of the client. The projects on which the appellant and its employees work are in the nature of intellectual property and therefore require confidentiality and protection. It is also submitted that detailed perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cost of repetition, the same are not reproduced herein. 15. The ld. CIT(A) after considering the submissions of the assessee and the remand report of the AO observed that the assessee to claim deduction u/s 80IC of the Act must fulfill certain conditions laid down in the said section as also not be hit by the exclusions contained in Section 80IC(4) of the Act. He further observed that as per the provisions contained in Sub-Section (2) of Section 80IC of the Act, the concerned undertaking or enterprise should have begun or begins to manufacture any article or thing. The ld. CIT(A) pointed out that the assessee had been incorporated on 01.07.1986 with registered office at 122, South Park, Kalkaji, New Delhi and thereafter, the registered office had been shifted to 1101, Michigan Avenue, Doon Express Business Park, Majra, Dehradun w.e.f. 18.12.2008 and the assessee was in the same line of business i.e. recruiting and supplying manpower to I.T. companies/clients since 1995. So, it was not a new unit which commenced operations from January, 2006. 16. The assessee had taken a strong objection to the said observation of the learned CIT(A) and stated that the Software Technology ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01.08.2006 (vii) Infosys Tech. Ltd. 207, Orchid Square B-Block, Susant Lok, Gurgaon 03.08.2007 (viii) Nokia Siemens Network Taiwan Co Lid. -do- 01.08.2007 It is seen that as per the contract agreements only in one case (Wipro) the contracts mention the Dehradun address. All these indicate that the appellant had a running business even before the claimed date of commencing operations from Jan., 2006 (as the chart above would reveal). Thus, it can be safely concluded that the operations did not commence in Jan., 2006 in Uttarakhand as claimed, but they had commenced much earlier as far back as 1995 (as found out by the AO from the appellant s own website) in Delhi or Gurgaon. Furthermore, critical supervisory and control operations appear to be carried out from the Gurgoan address. 17. The ld. CIT(A) further observed that even if the date of shifting the registered office to Dehradun in December 2008 was not to be taken as the date of commencement of operations in Uttarakhand, then also it was seen that majority of business operations were be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the statue, which means that attention should be paid to what has been said as also what has not been said ( pg 464) .. It is the bounden duty of the court to interpret the statue as it is. It is contrary to all rules of construction to read words into a statute which the Legislature in its wisdom has deliberately not incorporated. ( pg 464) 19. The learned CIT(A) held that the assessee s attempt to read words belonging to Sections 10A, 10B and 80HHE of the Act into Section 80IC of the Act was at best a self serving attempt to justify its stand and that the assessee s business of supplying manpower from IT jobs may not fall within the meaning of Information and Communication Technology Industry . The ld. CIT(A) mentioned that the assessee supplied a breakup of revenues generated from the State of Uttarakhand as compared to revenues generated outside the state as per following details: Name of client Onsite revenues (Rs.) Revenues from activities within Uttarakhand i) IBM 2,47,51,258 13,02,699 ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nching every receipt with the State of Uttarakhand. The ld. CIT(A) was of the view that the reliance placed by the assessee on Circular No. 694 dated 23.11.1994 in which both offsite and onsite activities had been deemed to be eligible for relief u/s 10A and 10B of the Act also could not have helped the assessee s case. As regards to the contention of the assessee that substantial investments had been made in the State of Uttarakhand by constructing a 40000 sq. ft. STPU, the ld. CIT(A) was of the view that this STPU was not eligible for claiming deduction u/s 80IC of the Act. Therefore, the receipts from this had rightly been taken under the head income from house property because a mere 10% of the total space was seen to be utilized for its own use by the assessee. The ld. CIT(A) mentioned that the investments should have been linked directly to eligible business activities for the purposes of Section 80IC of the Act and not for earning revenues otherwise. The ld. CIT(A) held that no relief was due to the assessee for deduction u/s 80IC of the Act for the following reasons: ( A) That the appellant s operations for the eligible business have started in the year under consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paper book. The ld. Counsel for the assessee further submitted that the assessee is a Dehradun based IT Company, engaged in providing support services to IT companies like IBM, Nokia, Wipro, Infotech, Tech Mahindra, Covansys, Nortel etc. through various modes i.e. on-line, on-site or off-site depending on the nature of requirement of the clients. It was also submitted that the various types of services provided by the assessee are as under: a) Application Development Support, b) Customer Care Services, c) Asset Management and Maintenance, d) Telecom Software Hardware Installation, e) Facility Management Services, Desktops, Servers, f) Technical Help Desk Support, g) Domino Servers Support, h) On call Support. 21. It was contended that the assessee furnished a detailed submission vide letter dated 14.12.2010 before the ld. CIT(A) (copy of which is placed at page nos. 217 to 312 and that the ld. CIT(A) asked the remand report from the AO who vide letter dated 14.10.2011 asked the assessee for the justification of claiming the deduction u/s 80IC of the Act, a reference was made to page nos. 313 to 368 of the assessee s compilation. It was further stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were rendered by the assessee to the clients, a reference was made to the agreement with Tech Mahindra Ltd. wherein Clause 1.10.1 provides that under the agreement for services entered into by the assessee with M/s Tech Mahindra Ltd., the assessee was required to provide the services of technically qualified and experienced personnel for working on projects and assignments on time and material basis on offshore as well as on-site assignments and that the payment of salaries and all related taxes for the contract would be the sole responsibility of the assessee, therefore, the AO was not justified in holding that assessee s activities could not have been termed as an industry . The reliance was placed on the judgment of the Hon ble Supreme Court in the case of National Union of Commercial Employees Vs M. R. Meher, Industrial Tribunal, Bombay (1962) ILLJ 241 SC and in the case of Bangalore Water Supply Sewerage Board Vs A. Rajappa (1978) 3 SCR 207. It was stated that the scope of the term Information and Communication Technology Industry can by no means restricted to activities or operations involving manufacture/production of goods. The reliance was placed on the Annual R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Information Technology includes products as well as services. It was further contended that it is trite that the beneficial provision should be liberally construed. It was emphasized that the business activities of the assessee commenced in the State of Uttarakhand as required u/s 80IC of the Act and personnel had been deployed at the sites of various IT companies/clients for performing assigned IT tasks under the control of the assessee, in support of the above, our attention was drawn towards the registration certificate issued by STPI, Dehradun (copy of which is placed at page No. 208 209 of the assessee s paper book). It was stated that the word industry has a wide import and it is a systematic activities organized by cooperation between employees and employer in production and/or distribution of goods and services. It was also stated that beneficiary provision are to be construed liberally. The reliance was placed on the following case laws: * Bajaj Tempo Ltd. Vs CIT (1992) 196 ITR 188 (SC) * Broach District Co-operative Cotton Sales, Ginning and Pressing Society Ltd. Vs CIT (1989) 177 ITR 418 (SC) 25. The ld. counsel for the assessee stated that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said section read as under: 80-IC. ( 1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3). ( 2) This section applies to any undertaking or enterprise,- ( a) which has begun or begins to manufacture or produce any article or thing, not being any article or thing specified in the Thirteenth Schedule, or which manufactures or produces any article or thing, not being any article or thing specified in the Thirteenth Schedule and undertakes substantial expansion during the period beginning- ( i) on the 23rd day of December, 2002 and ending before the 1st day of April, [2007], in any Export Processing Zone or Integrated Infrastructure Development Centre or Industrial Growth Centre or Industrial Estate or Industrial Park or Software Technology Park or Industrial Area or Theme Park, as notified by the Board in accordance with the schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch profits and gains for five assessment years commencing with the initial assessment year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains. ( 4) This section applies to any undertaking or enterprise which fulfils all the following conditions, namely:- ( i) it is not formed by splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of an undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such undertaking as is referred to in section 33B, in the circumstances and within the period specified in that section; ( ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.-The provisions of Explanations 1 and 2 to sub-section (3) of section 80-IA shall apply for the purposes of clause (ii) of this sub-section as they apply for the purposes of clause (ii) of that subsection. ( 5) Notwithstanding anything contained in any other provision of this Act, in computing the tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified in Schedule Fourteenth. The term industry is not defined in the Income Tax Act, however, the Hon ble Supreme Court in the case of National Union of Commercial Employees Vs M. R. Meher, Industrial Tribunal, Bombay (supra) held that the concept of industry covers the production of goods as well as rendering of services, in the said case, it has been held as under: It would be realised that the concept of industry postulates partnership between capital and labour or between the employer and his employees. It is under this partnership that the employer contributes his capital and the employees their labour and the Joint contribution of capital and labour leads directly to the production which the industry has in view. In other words, the cooperation between capital and labour or between the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry, is the co-operation which is directly involved in the production of goods or in the rendering of service. It cannot be suggested that every form or aspect of human activity in which capital and labour co-operate or employer and employees assist each other is an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not by the clients or their staff. All the personnels who worked at the sites of the clients were the employees of the assessee, those were accountable to the assessee and not to the clients and the assessee was responsible/accountable for the work done by its employees at the site of the clients who entered into agreements for providing the services with the assessee and not with the personnel deputed by the assessee. The copy of the agreement entered into by the assessee with M/s Tech Mahindra is placed at page nos. 251 to 257 of the assessee s paper book, in the said agreement, it is clearly mentioned at page no. 252 253that the assessee will provide the services of technically qualified and experienced personnel to Tech Mahindra Ltd. for working and assigning as may be desired by Tech Mahindra ltd. on time and material basis on offshore as well as onsite assignments and that the assessee shall ensure that personnel engaged under this agreement must have appropriate qualifications competence and in all respects acceptable to Tech Mahindra Ltd. and that the assessee company shall be responsible for making appropriate deduction in respect of Income Tax and other statutory de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Horticulture and agro-based industries such as (a) Sauces, ketchup, etc 21.03 15135 to 15137 and 15139 (b) Fruit juices and fruit pulp 2202.40 (c) Jams, jellies, vegetable juices, puree, pickles, etc. 20.01 (d) Preserved fruits and vegetables (e) Processing of fresh fruits and vegetabl es including packaging (f) Processing, preservation, packaging of mushrooms 5. Food Processing Industry excluding those included in the Thirteenth Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities, programme maintenance services, software development support and software testing. Therefore, the activities undertaken by the assessee falls in category no. 13 of part C of Schedule Fourteenth of the Income Tax Act. In the present case, the AO while disallowing the claim of the assessee riled upon the decision of the Hon ble Supreme Court in the case of MSCO Pvt. Ltd. Vs Union of India AIR 1985 SC 76. However, in the said decision, the Hon ble Supreme court observed that the word industry has many meaning and that it is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when the word to be construed is to be used in a taxing statute or a notification issued thereunder, it should be understood in its commercial sense. From the judgment of the Hon ble Supreme Court in the said case, it is clear that the principles laid down therein are that the term industry has many meanings and the meaning must be given which it receives in ordinary parlance or understood in the sense in which people conversant with the subject matter of the statute or statutory instrument understand it. In the aforesaid referred to cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 216 of the assessee s paper book and read as under: CERTIFICATE BY DATACOM SERVICE PROVIDER Certified that M/s IMSI (India) Pvt. Ltd. have been provided datacom links by us referred in para 4 of Back-up Form. The link is being used by them for transmission of data for development of Software for export purposes since 17 Jan. 2006. Sd/- J.T.O. Telephones Clement Town Dehradun Sd/- S.D.E Telephones Clement Town Dehradun 33. The assessee situated at Dehradun is also having electricity meter in its name which is evident from page nos. 214 215 of the assessee s paper book which is the copy of the electricity bill for the period 28th January 2006 to 10th March 2006 and due date of payment was 31st March 2006. In the present case, it is also relevant to point out that nothing is brought on record to substantiate that the assessee was not situated at Dehradun and having its registered office there, copy of the Income Tax Return of the assessee for the year under consideration is placed at page nos. 55 to 95 of the assessee s paper book, in the said return the address mentioned is . Express Business Park Subhash Road, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is administered by the Department of Electronics, Govt. of India through Software Technology Parks of India); iv) registration with the Office of the Commissioner of Provident Fund, Dehradun. 36. In this present case, the assessee controlled and provided all the facilities to its clients from Dehradun and the activities undertaken by the assessee falls in Item No. 13 of Part C of Schedule Fourteenth to the Income Tax Act, 1961. The assessee has its operational unit at Dehradun, paying taxes in Uttaranchal, creating jobs in the said State, bringing new IT call centres and BPO companies to Dehradun to deliver IT services. Therefore, it fulfills the conditions to claim the deduction u/s 80IC of the Act. We, therefore, by considering the totality of the facts as discussed hereinabove, are of the view that the assessee rightly claimed the deduction u/s 80IC of the Act and the AO was not justified in denying the said claim. In that view of the matter, we set aside the impugned order and direct the AO to allow the claim of the assessee. 37. Identical issue is involved in ITA Nos. 4277 5744/Del/2012 and ITA No. 2506/Del/2013 for the Assessment Years 2008-09, 2009-10 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
