Income Tax Appellate Tribunal - Ahmedabad
The Dy. Cit., Circle-6,, Ahmedabad vs Shri Himanshu V.Shah, Ahmedabad on 17 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "C" BENCH AHMEDABAD
BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER
AND SHRI MANISH BORAD, ACCOUNTANT MEMBER
ITA No. 1222/Ahd/2014
(Assessment Year:2010-11)
DCIT,
Circle-6, Ahmedabad Appellant
Vs.
Shri Himanshu V. Shah
Prop. M/S. Arvind Tele System
and M/s. Arvind Travles
C-1, 1st Floor, Surya Complex,
Opp. Navneet House, Gurukul
Road, Ahmedabad Respondent
PAN: ACZPS3768E
राज व क ओर से/By Revenue : Shri Prasoon Kabra, Sr. D.R.
आवेदक क ओर से/By Assessee : Shri S. N. Soparkar, A.R.
सन
ु वाई क तार ख/Date of Hearing : 15.03.2017
घोषणा क तार ख/Date of
Pronouncement : 17.03.2017
ORDER
PER S. S. GODARA, JUDICIAL MEMBER
This Revenue's appeal for assessment year 2010-11 arises against the CIT(A)-XVI, Ahmedabad's order dated 28.02.2014 passed in appeal no. CIT(A)-XVI/Addl.CIT/R-6/215/12-13, deleting Section 80IB deduction ITA No. 1222/Ahd/2014 (DCIT vs. Shri Himanshu V. Shah) A.Y. 2010-11 -2- disallowance of Rs. 41,52,202/- as made by the Assessing Officer in assessment order dated 31.12.2012, in proceedings u/s.143(3) of the Income Tax Act, 1961; in short "the Act".
Heard both parties. Case file perused.
2. Relevant facts are in a very narrow compass. The assessee claimed Section 80IB deduction amounting to Rs.41,52,202/- on income earned from business of M/s. Arvind Telesystems. He claimed to have carried out the business of providing basic telecommunication services. The Assessing Officer inter alia quoted assessee's failure in furnishing license agreement of each of its unit for installing, maintaining and operating EPABX system in question. The Assessing Officer was of the view that the assessee's role in providing the said services was only of a franchise of the Telecom Operator in question instead of himself be a provider of basic or cellular telecom services. He further declined the assessee's explanation to have succeeded on the very issue before the CIT(A) upto the preceding assessment year and before this tribunal upto assessment year 2001-02 by concluding that the same had not reached finality. All this resulted in the impugned disallowance being made.
3. The CIT(A) reverses Assessing Officer's findings as follows:
"4.2 I have carefully considered the' facts of the case in the light of submissions made by the appellant, the arguments taken by the assessing officer & material available on records. It is the case of the appellant that it had provided to the A O all the documents etc including licence agreement etc during the course of assessment proceedings. It has been argued that the ld A O was informed vide letter dt 8-10-2012, that on similar facts the additions made in appellants case for AY 97-98 to 2001-02 and 2002-03 to 2009-10 stand allowed by appellate authorities being Hon'ble jurisdictional Tribunal and CIT(A) for different years. The appellant has argued that as the facts of the case for the present year are identical to those existing in earlier years and that it had been allowed deduction u/s. 80IA by Hon'ble jurisdictional Tribunal and CIT(A) therefore there was no case for any addition / disallowance. On careful consideration, it is noted that the facts of the case of the current year are identical to those existing in earlier years.
ITA No. 1222/Ahd/2014 (DCIT vs. Shri Himanshu V. Shah)A.Y. 2010-11 -3- While denying the claim u/s. 80IA / 80IB for A Y 97-98 to 2001-02 and 2002-03 to 2009-10, the erstwhile AOs had concluded that the appellant being merely a franchise of BSNL was not eligible for allowance of deduction u/s. 8-IA / 80IB. In appeal, Hon'ble jurisdictional Tribunal and CIT(A) for respective years concluded that the appellant was eligible for allowance of deduction u/s. 8-IA / 80IB and hence was allowed the deduction. Accepted judicial discipline is that the appellate order of a superior appellate authority is to be followed even if the said order is challenged before next superior authority. Thus seen, the A O is bound to follow order of jurisdictional Tribunal in a case, on identical facts until and unless the decision of the Hon'ble Tribunal is reversed by jurisdictional High Court. Merely because the order of the Tribunal is contested by Department before the jurisdictional High Court would not exempt the A O from complying with the same. In the instant case, the A O has not been able to effectively establish in the assessment order with any cogent evidence as to how the facts of the case are different. As per narration made in the assessment order, the appellant was denied claim of deduction u/s. 80IA / 80IB on the premise that he was merely a franchise holder of BSNL / Telecom Department and is not a provider of a basic or cellular telecom services and that therefore not eligible for claim of deduction. Now once the facts of the case of the present appeal are identical to those of earlier years, then the decision of Hon'ble Tribunal was to be followed. Records indicate that my ld predecessors being CsIT(Appeals) have allowed relief to the appellant for A Y 2002-03 to 2009-10, directing the A O to allow deduction u/s. 80IA , by following the order of the Hon'ble jurisdictional Tribunal for A Y 97-98 to 2001-02. There is also no force in argument of A O regarding non submission of all the licence agreements, for each of the stations, by the appellant. For one, the appellant is argued that a copy thereof was provided to the A O. Without prejudice it is seen that the ld A O in para 2.2 of the assessment order himself records that though the appellant was operating from different stations, yet the format of licence agreements executed by Telecom Authority was standard and common to all. This goes on to indicate that there was actually no valid requirement for insistence by the ld A O upon the appellant for providing licence agreement for all the stations, since one agreement served for all. Consequently, in respectfully compliance to the order of Hon'ble Tribunal in appellants own case for A Y 97-98 to 2001-02 and of my Id predecessors in appellants own case for A Y 2002-03 to 2009-10,, the A O is directed to allow the deduction claimed by the appellant u/s. 80IA / 80IB of the Act. Consequently, the ground of appeal No. 2. comprising sub grounds 2.1 ,2.2, & 2.3 are allowed."
4. We have heard rival submissions. The sole dispute between the parties is about disallowance of Section 80IB deduction claimed on EPABX telecommunication services. It has already come on record that the assessee has succeeded on the very issue in earlier assessment year. The Assessing Officer himself is fair enough in not drawing any distinction on facts. He rather holds that the Revenue has not accepted this tribunal's earlier decisions (supra). Shri Soparkar files before us hon'ble jurisdictional high court's ITA No. 1222/Ahd/2014 (DCIT vs. Shri Himanshu V. Shah) A.Y. 2010-11 -4- judgment write upto assessment year 2007-08 decided on 16.12.2014 holding the assessee himself eligible for the impugned deduction in case of EPABX communication services. Learned Departmental Representative fails to dispute all these legal developments. We thus confirm CIT(A)'s order under challenge deleting the impugned disallowance.
5. This Revenue's appeal is accordingly dismissed.
[Pronounced in the open Court on this the 17th day of March, 2017.] Sd/- Sd/-
(MANISH BORAD) (S. S. GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad: Dated 17/03/2017
True Copy
S.K.SINHA
आदे श क त ल प अ े षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं धत आयकर आयु!त / Concerned CIT
4. आयकर आयु!त- अपील / CIT (A)
5. )वभागीय ,-त-न ध, आयकर अपील य अ धकरण, अहमदाबाद /
DR, ITAT, Ahmedabad
6. गाड3 फाइल / Guard file.
By order/आदे श से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण, अहमदाबाद ।