2019 (9) TMI 771 - AT - Income Tax

Tribunal remits case for reevaluation of deduction denial under section 80-IA(4)(ii).

The Tribunal remitted the case back to the Assessing Officer for reevaluation of the denial of deduction under section 80-IA(4)(ii) to the appellant. The ... Deduction u/s 80-IA(4)(ii) - HELD THAT:- Factual submissions made before us would require re-appreciation by lower authorities since it has been stressed by Ld. Sr. Counsel that trading in bandwidth like a commodity was not permissible / possible and the assessee was providing bandwidth / internet services only and therefore, eligible to claim the deduction u/s 80-IA(4)(ii). The lower authorities have primarily gone by the assessee’s submissions made during assessment proceedings as well as financial statements and reached a conclusion that the assessee was trading in bandwidth, which the assessee has not contested before us. Therefore, the matter stand remitted back to the file of learned AO, for adjudication de novo, keeping all the issues open, with a direction to the assessee to substantiate his claim. Needless to add that reasonable opportunity of being heard shall be granted to the assessee. Undisputedly, the onus would be on assessee to establish that it fulfills the eligibility conditions of Section 80-IA(4)(ii). - Decided in favour of assessee for statistical purposes. Issues involved:Interpretation of deduction u/s 80-IA(4)(ii) for the appellant.Detailed Analysis:Issue 1:The Tribunal recalled the matter due to the denial of deduction u/s 80-IA(4)(ii) to the appellant. The revenue expressed intent to file a writ against the recall, but as no writ petition was served, the Tribunal proceeded with the fresh hearing.Issue 2:The primary issue for adjudication was the denial of deduction u/s 80-IA(4)(ii) by the Commissioner of Income-tax (Appeals) to the appellant. The Commissioner held that the appellant was engaged in trading bandwidth, not rendering internet services, based on financial statements and lack of customer confirmations.Issue 3:The appellant argued that it provided internet services, not just traded bandwidth, supported by ISP license, invoices, and audit reports. The appellant contended that it acquired transmission capacity from ISPs to provide internet services, making it eligible for the deduction u/s 80-IA(4)(ii).Issue 4:The Tribunal found discrepancies in the lower authorities' conclusions and the appellant's submissions regarding the nature of the appellant's business. As the appellant contested trading bandwidth and claimed to provide internet services, the matter was remitted back to the Assessing Officer for reevaluation.Issue 5:The Tribunal emphasized that the appellant must substantiate its claim to be eligible for the deduction u/s 80-IA(4)(ii). The onus lies on the appellant to establish compliance with the eligibility conditions of the provision.In conclusion, the Tribunal remitted the matter back to the Assessing Officer for a fresh adjudication, directing the appellant to substantiate its claim for the deduction u/s 80-IA(4)(ii) and granting a reasonable opportunity for the same. The appeal was partly allowed for statistical purposes.