TMI Blog2021 (8) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction only in the year under consideration by the Assessing Officer. In our opinion, there is no infirmity or error in the order of the Learned CIT(A) on the issue in dispute of deduction under section 10B - Decided against revenue. - ITA No.4755/Del/2014 - - - Dated:- 26-8-2021 - Shri O.P. Kant, Accountant Member And Shri Amarjeet Singh, Judicial Member For the Appellant : Sh. Gaurav Pundir, Sr.DR For the Respondent : Sh. Vinod Rawal, CA ORDER PER O.P. KANT, AM: This appeal by the Revenue is directed against order dated 23/06/2014 passed by the learned Commissioner of Income-tax (Appeals)-2, Faridabad [in short the Ld. CIT(A) ] for assessment year 2009-10, raising following grounds: 1. That on the facts and the circumstances of the case the Ld. CIT(A) has erred in deleting the addition arising out of disallowance made by the AO u/s 10B of the I.T. Act, 1961 although the assessee has not been able to substantiate his claim of exemption u/s 10B of the I.T Act, 1961 either during assessment or remand proceedings. 2. That on the facts and the circumstances of the case the Ld. CIT(A) has erred in accepting the contention of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning pages 1 to 284, and other documents physically as well as through email. 4. In the grounds raised, only the issue of disallowance of deduction under section 10B of the Act, is involved. Before us, the Learned DR relied on the order of the Assessing Officer and made arguments in two parts. Firstly, he objected admitting of additional evidence by the Learned CIT(A). Secondly, he argued on merit of deduction claimed by the assessee, which has been allowed by the Learned CIT(A). 5. The Learned DR submitted that despite sufficient opportunity granted by the Assessing Officer, no documentary evidences in support of the claim under section 10B was submitted by the assessee. According to him, there is no reasonable cause for failure on the part of the assessee in submitting documentary evidence and, therefore, Learned CIT(A) is not justified in admitting the additional evidences and allowing relief to the assessee on the basis of those evidences. 6. In support of disallowance of deduction on merit, the Learned DR referred to the deficiencies found by the Assessing Officer in the submission of the assessee. He particularly referred that the assessee could not provide det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prevented by sufficient cause from producing the evidence which he was called upon to produce by the Assessing Officer; or g) Where theappellant was prevented by sufficient cause from producing before the Assessing Officer any evidence which is relevant to any ground of appeal; or h) Where the Assessing Officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidenced relevant to any ground of appeal. As per the appellant, he was out of the country for the period 30.07.2011 to 17.01.2012. This was the period when most of the details were sought by the AO which culminated in the order of assessment dated 28.12.2011. As per the appellant, he was holding immigration visa for travelling to USA, the dates mentioned on the visa granted by the US Authorities i.e. 12.07.2011 to 09.11.2011 were misconstrued as validity of visa, whereas the appellant was granted immigration visa for one year and he was required to get it endorsed by reaching USA within these dates. Accordingly, the appellant travelled to USA on 30.07.2011 and then got his visa endorsed on the same date. As a result of this endorsement, he was on 1-551 sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the remand proceeding. The detailed finding of Ld. CIT(A) is reproduced as under: 5.7 I have considered the facts of the case and gone through the detailed submissions of the learned counsel of the appellant. I have also carefully examined the remand report of the AO dated 06.05.2014 together with the rejoinder filed by the appellant and various judicial pronouncements relevant to the facts of the case. The AO, while passing order u/s 143(3) of the Income Tax Act, disallowed deduction u/s 10B of the Income Tax Act on the ground that there were certain deficiencies in the submissions/documents submitted by the appellant. The appellant, during the course of appellate proceedings, gave additional evidence in order to make good the deficiencies pointed out by the AO in her assessment order. Along with these documents, the appellant gave point-wise reply with regard to various deficiencies pointed out by the AO. As regards AO's observation that the appellant could not provide a detailed and documentary evidence of input software licenses purchased by it for rendering IT enabled services and documentary evidence in the form of compact disc regarding the output* software,, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egarding the valude of computer hardware of only ₹ 2,18,346/- shown by the appellant. In response, the appellant submitted that the AO over-looked the fact that the aforesaid amount represents only the written down value and not the value of computer hardware in terms of the actual cost of the asset. Elaborating further, the appellant submitted that he had purchased computer hardware worth ₹ 6,56,110/- during assessment years 2003-04 to assessment year 2009-10. The appellant also brought to the notice of the under-signed the case of Techdrive India Pvt. Ltd. 25 SOT 122 as per which it was held that owning of plant and machinery or equipment was not required for producing computer software. Along with this the appellant also relied upon CBDT Circular No. 1/2013 dated 17.01.2013. Thus the appellant was able to effectively rebut the AO's argument concerning the value of computer hardware owned by him. 5.11 Regarding AO's observation that the appellant could not establish with the help of documentary evidence that it was actually rendering IT Enabled Services, the appellant effectively rebutted the same by submitting the annual return filed with the STPI showin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90,63,137/- were all valid during the current year. 5.14 Another observation of the AO in his remand report concerning the discrepancy between total exports shown by him in his return of income amounting to ₹ 490.63 Ides and exports as per softtex forms, the appellant in addition to relying upon the certificate issued by the STPI certifying total export of ₹ 4,90,63,137/-, gave duplicate copies of softtex forms, on a perusal of which the issue of discrepancy gets resolved. 5.15 Thus, the appellant by filing additional evidence during the course of appellate proceedings along with his submissions effectively rebutted all the deficiencies pointed out by the AO in her assessment order u/s 143(3) of the Income Tax Act as well as the ambiguities pointed out by the AO in his remand report dated 05.05.2014. By effectively rebutting all these observations/arguments, the appellant decisively established that it had rightly claimed deduction u/s 10B of the Income Tax Act. Another very important point relied upon by the appellant is that the appellant had been continuously getting exemption under the said Section from AY 2003-04 to 2008-09 and again in AY 2010-11. Since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act barring the year under consideration. Since there has been no change in the facts and circumstances of the case during the year compared to preceding and succeeding years, the AO was not justified in making the said disallowance. 5.18 Hence, after a careful consideration of the facts of the case together with all the material placed before the under-signed, I hold that the AO erred in disallowing deduction u/s 10B of the Income Tax Act amounting to ₹ 3,62,19,000/-. Consequently, Ground Nos. 1 to 4 of the appeal are hereby allowed. 8.3 We find that Ld. CIT(A) dealt with all the objections of the Assessing Officer of old service agreement, evidence in support of input software as well as output software, No. of employees, quantum of plant and machinery, difference in export figures reported in the return of income and softtex forms. The Learned DR could not rebut any of the factual finding of Ld. CIT(A). Further, we find that assessee has been allowed deduction under section 10B of the Act on the same activity for assessment year 2003-04 to 2008-09. Even in assessment year subsequent to the present assessment year i.e. AY 2010-11 also, the assessee has been all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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