Dy. Commissioner of Income-tax-13(1)(1), Mumbai v. QAD India Pvt. Ltd
[Citation -2019-LL-0821-46]

Citation 2019-LL-0821-46
Appellant Name Dy. Commissioner of Income-tax-13(1)(1), Mumbai
Respondent Name QAD India Pvt. Ltd.
Court ITAT-Mumbai
Relevant Act Income-tax
Date of Order 21/08/2019
Assessment Year 2014-15
Judgment View Judgment
Keyword Tags time limit • additional grounds • directions of commissioner • computation of income • claim of deduction
Bot Summary: AO observed in his order that in A.Y.2013-14 same disallowance was made in respect of fee for technical services payable to QAD Ireland on which tax was not deducted and paid and the assessee had accepted such disallowances in A.Y.2013-14. Since time limit for filing revised return had already expired, the assessee filed the revised computation to this effect and claimed deduction before the ld. The assessee filed its return of income on 28.11.2014 declaring income Rs. 3, 73,38,725/-. After analysis of the submissions filed by the assessee and on the facts and in the circumstances of the case, the A.O. did not allow the said claim. Further, the assessee has also referred to the old Circular issued by CBDT No :14 Dated 11.04.1955 and various case laws in support of its claim. The A.O. is directed to allow the deduction of Rs 61,65,121/- as claimed by the assessee after verification of details. CIT(A) had given a categorical finding that the said deduction is entitled to the assessee in A.Y.2014-15 and had rejected the reasoning of the ld.


IN INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI M.BALAGANESH, AM & SHRI AMARJIT SINGH, JM ITA No.3694/Mum/2018 (Assessment Year : 2014-15) Dy. Commissioner of Vs. QAD India Pvt. Ltd. Income Tax-13(1)(1) Unit Member 301, nd 2 Floor, Room No.218 Techniplex 1 Aayakar Bhavan Techniplex Complex M.K.Road, Goregaon (W) Mumbai 400020 Mumbai 400 061 PAN/GIR No. AAACQ1307K (Appellant) (Respondent) Revenue by Shri D.G. Pansari Assessee by Shri Aliasger Rampurwala Shri Nishant Shah Date of Hearing 05/08/2019 Date of Pronouncement 21/08/2019 / O R D E R PER M. BALAGANESH (A.M): This appeal in ITA No.3694/Mum/2018 for A.Y.2014-15 arises out of order by ld. Commissioner of Income Tax (Appeals)-21, Mumbai in appeal No.CIT(A)-21, DCIT-13(1)(1)/IT-505/2016-17 dated 28/12/2016 (ld. CIT(A) in short) against order of assessment passed u/s.143(3)of Income Tax Act, 1961 (hereinafter referred to as Act) dated 28/12/2016 by ld. Dy. Commissioner of Income Tax, Circle 13(1)(1), Mumbai (hereinafter referred to as ld. AO). 2 ITA No.3694/Mum/2018 M/s.QAD India P. Ltd., 2. first issue to be decided in this appeal is as to whether ld. CIT(A) was justified in directing ld. AO to allow claim of deduction of Rs.61,65,121/- u/s.40(a)(i) of Act on account of software license payment in light of law prevailing that CIT(A) does not have power to set aside case to ld. AO. 3. brief facts of this issue are that assessee is engaged in business of rendering software development and related services. It had filed its return of income for A.Y.2014-15 on 28/11/2014 declaring total income of Rs.3,73,38,730/-. ld. AO observed that during course of assessment proceedings, assessee company vide letter dated 12/11/2016 filed revised computation sheet wherein claim for allowance of additional amount of Rs.61,65,121/- which was not claimed u/s.40(a) of Act was made by assessee. ld. AO observed in his order that in A.Y.2013-14 same disallowance was made in respect of fee for technical services payable to QAD Ireland on which tax was not deducted and paid and assessee had accepted such disallowances in A.Y.2013-14. assessee claimed deduction for this amount of Rs.61,65,121/- in A.Y.2014-15 on ground that tax has been duly deducted and paid. Since time limit for filing revised return had already expired, assessee filed revised computation to this effect and claimed deduction before ld. AO during course of assessment proceedings. ld. AO by placing reliance on decision of Hon ble Supreme Court in case of Goetze India Ltd., reported in 157 Taxman 1 denied claim of assessee as it was not made by way of valid return. This grievance was addressed by ld. CIT(A) by granting relief to assessee by observing as under:- I have considered facts of case and submissions made by appellant. It is seen from facts available on record that assessee 3 ITA No.3694/Mum/2018 M/s.QAD India P. Ltd., provides support, development and other service needs of clients, business units of QAD Inc and its subsidiaries as Global Resource Centre. assessee filed its return of income on 28.11.2014 declaring income Rs. 3, 73,38,725/-. case was selected for scrutiny under CASS. During course of assessment proceedings, assessee filed revised computation claiming additional deduction of Rs 61,65,121/- u/s 40(a) of Income-tax Act, 1961. After analysis of submissions filed by assessee and on facts and in circumstances of case, A.O. did not allow said claim. A.O. has relied on decision of case of Goetze (India) Ltd Vs CIT 157 Taxman 1(SC). During appellate proceedings, appellant in its submission brought to my notice that Hon'ble High Court of Bombay in case of CIT vs. Prithvi Brokers & Shareholders (P) Ltd., held that "the jurisdiction of appellate authorisation to entertain such claim has not been negated by Hon'ble Supreme Court in its judgment." Further, assessee has also referred to old Circular issued by CBDT No :14 (XL 35) Dated 11.04.1955 and various case laws in support of its claim. In view of above judicial pronouncements and facts of case, it is considered that deduction claimed' should be allowed. A.O. is directed to allow deduction of Rs 61,65,121/- as claimed by assessee after verification of details. Therefore, this ground of appeal is therefore allowed subject to verification. 4. Aggrieved, revenue is in appeal before us. 5. We have heard rival submissions. We find that ld. CIT(A) had given categorical finding that said deduction is entitled to assessee in A.Y.2014-15 and had rejected reasoning of ld. AO by placing reliance on Goetze India supra and ld. CIT(A) had instead placed reliance on decision of Hon ble jurisdictional High Court in case of Prithvi Brokers and Shareholders Pvt. Ltd. reported in 349 ITR 336. However, we find that ld. CIT(A) had merely directed ld. AO to verify details and grant deduction accordingly. Though we are in agreement with arguments advanced by ld. DR that power of setting aside to ld. AO by ld. CIT(A) had been removed from statute, still in view of peculiar facts and circumstances, we are inclined to accept arguments of ld. AR that in order to avoid 4 ITA No.3694/Mum/2018 M/s.QAD India P. Ltd., multiplicity of proceedings , there is no wrong committed by ld. CIT(A). Accordingly, ground No.1 raised by revenue is dismissed. 6. ground No.2 is with regard to challenging action of ld. CIT(A) deleting addition of Rs.6,71,653/- towards addition made on account of AIR information. ld. AR fairly stated that this addition has been subsequently deleted by ld. AO vide 154 order passed by him on 20/06/2019, accordingly, there is no need to adjudicate this ground at this stage. To substantiate his contention, ld. AR also placed copy of submission made by assessee before ld. AO and copy of 154 order passed by ld. AO in paper book. Accordingly, ground No.2 raised by revenue is dismissed. 7. In result, appeal of revenue is dismissed. Order pronounced in open court on this 21/08/2019 Sd/- Sd/- (AMARJIT SINGH) (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 21/08/2019 KARUNA, sr.ps Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A), Mumbai. 4. CIT DR, ITAT, Mumbai 5. BY ORDER, 6. Guard file. //True Copy// (Asstt. Registrar) ITAT, Mumbai Dy. Commissioner of Income-tax-13(1)(1), Mumbai v. QAD India Pvt. Ltd
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