Ita/778/2011 Of Commissioner Of Income Tax v. Ito,93 Ttj 828

30.9.201r Present: Mr. N.P. Sahni, Sr. Standing Counsel [for ][the ][Revenue.]Ms. Kavita Jha, Advocate with Mr. [Somnath Shukla, ][Advocate ][for ][the]ASSCSSEE. + cM APPL. 10141/2011 IN ITA 778120I.1 + For the reasons stated in this [application, delay ][in ][re-filing ][the ][appeal ][is ][condoned,].. moreso, when the appeal [is ]filed [in ][time in ][respect ][of ][other ][assessrlent ][years ][and ][on ][the]same very issue raised [in ]this [appeal.] CM stands disposed of. tTA778l20trITA 1509/2010ITA 54sl2011ITA 60s/2011 These four appeals pertaining [to the ][same ][assessee ][involved four ][assesstnent ][years,]though the questions raised are common. [Lead ][case ][is ][ITA7781201l ][which ][is ][in ][respect]of assessment year 2003-04 and the [order ][passed ][by ][the ][Tribunal ][in ][this ][case has been]followed in other three cases. For this [reason, ][we ][would ][like ][to ][take ][note ][of ][the ][facts]appearing in ITA 778/201I. For this year, the respondenVassessee [filed ][its return declaring ][income ][of ][Rs.1 ][1.87]crores. Assessment was frarned after making [certain additions ][at an ][income ][of Rs. ][12.65] brores vide orders dated 31't [March ], [2006. ][Thereaftcr, the ][Commissioner ][of ][Income ][Tax]issued notice dated 1lth March,2008 [under ][Section ][263 ][of ][the ][Act ][on the ][ground that]the assessee had clairned [project ][expenses of ][Rs. ][19,39,4521- ][which ][was capital in ][nature.]The Cornmissioner also stated in the said [show ][cause ][notice ][that ][the ][assessee ][had]clairned deduction of [Rs.38,83,45,8661- ][under Section ][108 of ][the ][Act ][which ][was ][wrongly]allowed by the Assessing Officer. [The ][assessee ][in ][reply to ][the ][said ][notice ][contended ][that]project expenses were revenue in [nature and ][in ][respect ][of ][second issue ][raised ][in ][the]notice it was explained [that ][there was ][no ][over-lapping ][of claims ][made ][under ][Section]8OHHE and 108 of [the ]Act. [The ][Commissioner was, ][however, ][not ][convinced ][with ][the]aforesaid plea of the assessee. [Discussing the provisions ][of ][Section ][80HHE (5) ][of ][the]Act, the Comrnissioner [observed ][that ][the ][assessee ][was ][not ][entitled ][to ][clairn ][the benefit]under section 10B of the Act. [she ][also observed ][that ][the ][project ][expenses ][were capital ][in]nature with respect of [these ][two ][issues and ][directed the Assessing ][Officer ][to ][decide ][these]two aspects afresh, [as ][per ]law, [after ][giving ][opportunity ][to the ][aSSeSSee.].. The assessee preferred [appeal ][against ][this ][order ][passed ][by ][the ][Cornmissioner]under Section 263 of the Act. [The ][plea ][of ][the ][assessee ][before ][the Tribunal ][was ][that]insofar as issue regarding [deduction under Section 10B ][of ][the ][Act ][is ][concerned, ][it ][was]debatable issue, moreso, when [the ][assessee ][had ][clairned deduction under Section 80HHE]of the Act in the earlier [year ][as ][well ][and ][was ][allowed. ][This ][plea ][of ][the ][assessee ][has been]accepted by the ITAT [relying ][upon ][its ][own ][order ][in ][the ][case ][of ][Legato ][System (P) ][Ltd.]Vs. ITO,93 TTJ 828. ,l \(.r We may also record that [the ][appeal ][of ][the Revenue ][in ][the ][case ][of ][Legato ][System](supra) was dismissed by this Court. We [rnay ][also ][record ][that identical ][issue ][had ][arisen]in ITA 123312007, ITA 16012009 [and ]ITA [50712008 ][entitled ][Commissioner ][of ][Income]TaxYs. fnterra Software fntlia Pvt. Ltd. [and ][this Court ][had ][disrnissed ][those ][appeals ][of]the Revenue upholding the order of [the ][Tribunal. ][The ][Revenue had ][prefered ][SLPs]thereagainst which have also been [dismissed ][by ][the ][Supreme ][Court ][vide ][orders dated ][23'd]September ,2OIL On the [aforesaid ground, the order ][of ][the ][Tribunal ][on ][these ][aspects ][is]without any blemish and needs no [interference.] ,l \(.r We may also record that [the ][appeal ][of ][the Revenue ][in ][the ][case ][of ][Legato ][System](supra) was dismissed by this Court. We [rnay ][also ][record ][that identical ][issue ][had ][arisen]in ITA 123312007, ITA 16012009 [and ]ITA [50712008 ][entitled ][Commissioner ][of ][Income]TaxYs. fnterra Software fntlia Pvt. Ltd. [and ][this Court ][had ][disrnissed ][those ][appeals ][of]the Revenue upholding the order of [the ][Tribunal. ][The ][Revenue had ][prefered ][SLPs]thereagainst which have also been [dismissed ][by ][the ][Supreme ][Court ][vide ][orders dated ][23'd]September ,2OIL On the [aforesaid ground, the order ][of ][the ][Tribunal ][on ][these ][aspects ][is]without any blemish and needs no [interference.] Insofar as expenditure incurred [on the ][development ][of ][package ][software ][is]goncerned, the ITAT set aside the order of [the Cornmissioner ][under Section ][263 ][of ][the]Act on this count [as ]well [holding that ][even ][this ][issue ][was ][debatable ][and, ][therefore, ][the]order of the assessing Officer [could ][not ][be ][said ][to ][be ][erroneous ][and ][prejudicial to ][the]interest of the Revenue. After [reading ][the ][order ][of ][the ][Tribunal ][on ][this ][issue, ][we ][are ][in]agreement with the view taken by [the ][Tribunal.] No question of law arises [in ][these ][appeals ][which ][are ][accordingly ][dismissed.] SIDDHARTH MRIDUL,J. SEPTEMBER 3O,}OLIskb