Income Tax Appellate Tribunal - Delhi
Dcit, New Delhi vs M/S. Oracle (Ofss) Bpo Services Ltd., ... on 31 October, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH 'E' : NEW DELHI)
BEFORE HON'BLE PRESIDENT, SHRI G.D. AGRAWAL
and
SHRI KULDIP SINGH, JUDICIAL MEMBER
ITA No.6974/Del./2014
(ASSESSMENT YEAR : 2009-10)
DCIT, Circle 19 (1), vs. M/s. Oracle (OFSS) BPO Services Ltd,
New Delhi. DLF Infinity Tower A, 3rd Floor,
DLF Cyber City, Phase - II,
Gurgaon - 122 002.
(PAN : AABCE1201F)
(APPELLANT) (RESPONDENT)
ASSESSEE BY : Shri Tarandeep Singh, CA and
Shri Shubham Gupta, Advocate
REVENUE BY : Shri A.K. Yadav, Senior DR
Date of Hearing : 30.10.2017
Date of Order : 31.10.2017
ORDER
PER KULDIP SINGH, JUDICIAL MEMBER :
The Appellant, Deputy Commissioner of Income-tax, Circle 19 (1), New Delhi (hereinafter referred to as 'the Revenue') in by filing the present appeal sought to set aside the impugned order dated 30.09.2014 passed by the Commissioner of Income-tax (Appeals)-XVI, New Delhi qua the assessment year 2009-10 on the grounds inter alia that :-
2 ITA No.6974/Del./2014
"1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the Assessing Officer to grant deduction in respect of (1) provision for bonus of Rs.1,01,701/-, (2) Sale of fixed assets of Rs.21,607/- and (3) Foreign exchange gain on capital expenditure of Rs.5358/- which were claimed by the assessee by filing revised computation of income during the course of assessment proceedings which is not permissible under the Act.
2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO to grant deduction u/s 10A in respect of (1) unpaid bonus inadmissible u/s 43B of Rs. 87,98,002/-, (2) Provision for doubtful debts of Rs. 1,24,67,570/- and payment of employees contribution of PF of Rs.1,85,038/- which was not claimed by the assessee in the return income or by fili9ng revised return but was claimed by way filing a revised computation of income during the course of assessment proceedings which is not permissible under the Act."
2. Briefly stated the facts necessary for adjudication of the controversy at hand are : assessee company is into the business of providing Business Processing Outsourcing services (BPO) to the mortgage industry. Assessee company debited foreign exchange loss of Rs.8,54,87,777/- in profit & loss account which has been disallowed by the AO by following the order passed by his predecessors qua AY 2008-09 and CBDT Instruction No.3 of 2010 dated 23.03.2010. Assessee company made disallowance of Rs.87,98,002/- as unpaid bonus inadmissible u/s 43B of the Income-tax Act, 1961 (for short 'the Act') but vide revised computation, assessee added an amount of Rs.2,14,50,610/- and 3 ITA No.6974/Del./2014 reduced an amount of Rs.6,13,047/- from the income declared in the return. However, AO disallowed the same on the ground that these disallowance result in the increase of assessee's claim of deduction u/s 10A of the Act. By filing revised computation, the assessee company also claimed provision for doubtful debts to the tune of Rs.1,24,67,570/- and payment of employees contribution to PF after due date to the tune of Rs.1,85,038/- which have also been disallowed by the AO on the same ground that it will increase assessee's claim of deduction u/s 10A of the Act.
3. Assessee carried the matter by way of filing appeal before the ld. CIT (A) who has partly allowed the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of challenging the impugned order passed by ld. CIT (A).
4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
5. The ld. DR for the Revenue challenging the impugned order passed by the ld. CIT (A) relied on the order of the AO.
6. Perusal of para 4 of the assessment order apparently goes to prove that the AO has partly accepted the revised computation of income filed by the assessee company. Undisputedly, the assessee 4 ITA No.6974/Del./2014 has earned net profit exchange fluctuation gain of Rs.8,54,87,777/- and credited the same to profit & loss account which has been considered as part of income while computing the taxable income. However, the assessee company has failed to claim the deduction of Rs.5,358/- as foreign exchange earned on capital amount and claimed the same vide revised return. When the assessee company is undisputedly eligible for deduction u/s 10A of the Act, it is entitled for consequential deduction u/s 10A also. So, the foreign exchange gain to the taxable income of the assessee company cannot be added which amounts to double taxation and as such, the ld. CIT (A0 has rightly deleted the same.
7. Assessee made suo motu disallowance on account of unpaid inadmissible bonus u/s 43B of the Act to the tune of Rs.87,98,002/- and made claim of Rs.1,01,701/- on account of bonus in the revised computation of income. When the AO has accepted the suo motu disallowance made by the assessee company in the revised computation of income, the suo motu claim made by the assessee company on account of bonus cannot be disallowed. AO has selectively accepted the revised computation of income to the extent of the benefit to the revenue while completing the assessment.
5 ITA No.6974/Del./2014
8. So, all these facts have been thrashed by ld. CIT (A) in granting deduction u/s 10A to the tune of Rs.87,98,002/-, Rs.1,24,67,570/- and Rs.1,85,038/- on account of unpaid bonus inadmissible u/s 43B, provision for doubtful debts and payment of employee's contribution to PF respectively claimed by the assessee company by filing revised computation of income during the assessment proceedings. When assessment proceedings were going on, filing of return was not necessary rather return filed by the assessee company has been duly explained by revised computation of income whose genuineness has otherwise been not disputed by the AO. AO has rather selectively used the revised computation of income to the extent of benefit in favour of the Revenue which is not sustainable in the eyes of law.
9. Hon'ble Bombay High Court in judgment cited as CIT vs. Gem Plus Jewellery India Ltd. - 330 ITR 175 (Bom.) has categorically held that exemption u/s 10A has to be granted on enhanced income on account of employee's contribution towards provident fund/ESIC.
10. Furthermore Hon'ble Madras High Court in judgment cited as CIT vs. Abhinitha Foundation (P.) Ltd. - 396 ITR 251 (Madras) held that, "even if a claim made by assessee-company does not form part of original return or even revised return, it can 6 ITA No.6974/Del./2014 still be considered by Assessing Officer as well as appellate authorities if, relevant material is available on record - Held, Yes."
11. So, when the eligibility of the assessee company to get deduction u/s 10A of the Act is not in dispute, the AO was not justified in disallowing the deduction u/s 10A of the Act.
12. In view of what has been discussed above, we are of the considered view that there is no illegality or infirmity in the impugned order passed by the ld. CIT (A), hence present appeal filed by the Revenue is dismissed.
Order pronounced in open court on this 31st day of October, 2017.
SD/- SD/-
(G.D. AGRAWAL) (KULDIP SINGH)
PRESIDENT JUDICIAL MEMBER
Dated the 31st day of October, 2017
TS
Copy forwarded to:
1.Appellant
2.Respondent
3.CIT
4.CIT (A)-XVI, New Delhi.
5.CIT(ITAT), New Delhi.
AR, ITAT
NEW DELHI.