2012 (11) TMI 1260

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....lected for scrutiny and thereafter the assessment was framed u/s.143(3) vide order dated 1-5-2009 and the total income was determined at Rs. 1,43,84,473/- after making the disallowance and denying deduction u/s. 80IA. Aggrieved with the order of A.O. assessee carried the matter before the CIT (A). 2. CIT (A) vide his order dated 7-12-2009 granted partial relief to the assessee. 3. Aggrieved by the order of CIT (A) Revenue is now in appeal before us. Before us the first ground of the Revenue reads as under:- "1. The Ld. CIT (A)-XI Ahmedabad has erred in law and on facts in allowing the claim made u/s. 80IA of the I.T. Act of Rs. 1,12,96,603/-." 4. During the course of assessment proceedings the A.O. observed that the assess....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....us. 7. Before us at the outset the Ld. A.R. submitted that on identical facts the assessee has been allowed the deduction u/s. 80IA by Hon'ble Tribunal in Assessment Years 1997-98 onwards. He placed on record the copy of the assessment orders for A.Y. 1997-98 to 2001-02 (ITA No.830A/04, 832/A/04, 1219/A/04, 1859/A/04. He also placed on record the orders of the Tribunal for A.Y. 2002-03, 2004-05 and 2005-06 in ITA No.155 to 157/A/2009. He further placed on record the copy of order for A.Y. 2006-07 inITA No.1912/A/09. He therefore, submitted that since the facts are identical and the issue is covered in his favour by the earlier decisions of the Hon'ble Tribunal. 8. The Ld. D.R. on the other hand relied on the order of A.O. 9. We hav....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....the services as a PCO. From clause 24 of the agreement, it is evident that the STD/PCO can be provided by the assessee i.e. one of the customers of the assessee, who can run the STD/PCO and to such STD/PCO commission will be paid by the assessee. Similarly, it is clear that the services provided by the assessee are not only the network of trunking as mentioned by the Ld. CIT (A). As per clause 3 of the agreement, the assessee is responsible for installation, networking operation and maintenance of EPABX equipments, user terminal equipments, connected cables etc. As per clause 4, the assessee is also responsible for treatment of compliances, issue of bills, collection of bills etc. Therefore, in our opinion the assessee is providing basic te....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the co-ordinate Bench of Tribunal we find no reason to interfere with the order of the CIT (A).Thus this ground of the Revenue is rejected. Ground No.2 reads as under:- "2. The Ld. CIT (A)-XI, Ahmedabad has erred in law and on facts in restricting the disallowance of Rs. 1,00,000/- to Rs. 75,000/- made on account of Telephone etc., expenses." 11. On perusing the Profit and loss account of M/s. Arvind Travels & Arvind Telesystems A.O. noticed that the assessee has claimed expenses towards traveling and telephone amounting to Rs. 3,43,734/- and office expenses of Rs. 73,428/-.The assessee was asked to prove and justify the evidence that the expenditure was incurred for the exclusively for the purpose of business and no satisf....