The assessee is a cellular company selling SIM cards and recharge coupons. The assessee has deducted TDS on both the sale, i.e. SIM cards as well as recharge coupons upto the financial year 2007-08. Thereafter TDS was deducted only on SIM cards and no TDS was deducted insofar as the recharge coupons are concerned. It was explained before the Assessing Officer that because of change of policy decision TDS was not deducted. The amount paid on selling of recharge coupons was not commission but only a discount.
The ground raised by the Revenue relates to exclusion of foreign currency expenses not related to onsite software development from the export turnover for the purpose of computing deduction u/s 10A and 80HHE of the Act. The case of the assessee is that foreign expenditure which has been incurred on on-site software development activity should not be excluded from the export turnover.
We find that we are bound to follow the judgment of the Income-tax Appellate Tribunal, Chennai ‘B’ Special Bench rendered in the assessee’s own case for the assessment years 1998-99 to 2002-03. In the said decision rendered in the case of Mahindra Holidays & Resorts (India) Ltd. (supra), the Special Bench has held that 40 percent of deferment of membership fee resorted to by the assessee is justified. The said decision of the Special Bench is rendered in the assessee’s own case in exactly similar circumstances. Therefore, the rule of precedence demands that the decision of the Special Bench must prevail.
In the instant case also services were provided by the assessee outside India and for this business the services of non-residents were utilized to whom technical fee in question was paid. No good reason could be shown by the DR as to why the aforesaid decision of the Tribunal is not applicable in the instant case and why the said decision should not be followed in the instant case. We, therefore, following the above decision, hold that the services of non-residents to whom the technical fee of Rs. 74,63,768/- was paid by the assessee were utilized for the business which was carried out outside India for earning income from a source outside India. Therefore, the grounds of appeal of the assessee are allowed.
In our considered opinion, the notice issued under section 148 of the Act is nothing but mere change of opinion. The issues which have already been considered in the original assessment cannot be reappreciated in reassessment proceedings under the garb of income escaping assessment. If the Assessing Officer has not given any finding after considering the evidence on record, it cannot be said that the income had escaped assessment on account of concealment of income of the assessee.
It is a well settled law that when two different views of the different jurisdictional High Courts are available, the decision favourable to the assessee is to b03e followed. The hon’ble Supreme Court of India in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) has held that (page 195) “if two reasonable constructions of a taxing provisions are possible, that construction which favours the assessee must be adopted. This is a well-accepted rule of constructions recognized by this court in several of its decisions”. Therefore, in view of the above, the Tribunal has been following the judgment of the hon’ble Karnataka High Court in the case of Yokogawa India Ltd. (supra) in various cases holding that exemption under section 10B is to be allowed without setting off brought forward unabsorbed loss and depreciation from earlier assessment year or the current assessment year. A similar view has been taken by the Tribunal in the following cases as well :
We observe that the assessee can either captively consume the electricity generated or can sell the same to the Tamil Nadu Electricity Board at Rs. 2.70 per unit. The assessee is refrained from directly selling generated electricity to the consumers. The assessee has no other option but to sell the electricity generated to the Tamil Nadu Electricity Board at the predetermined rates.
From the decision of the hon’ble Delhi High Court in the case of CIT v. Hindustan Coco Cola Beverages (P.) Ltd. [2011] 331 ITR 192 (Delhi) it is clear that ‘business or commercial rights of similar nature’ are not manufactured or produced over-night, but are brought into existence by experience and reputation. The non-compete fee is outcome of an agreement entered into between two parties.
In addition to the regular cricket matches, the assessee is conducting commercially oriented matches like Indian Premier League (IPL). Players of IPL teams are selected by sponsors to play under their brand names. Players are selected through auctions. Players choose that sponsor which offers the highest amount of money. IPL Matches are played with hype and celebration so as to create more and more revenue out of sale of telecast rights. All these activities when read together, one has to come to a finding that the entire activities of the Association is poised towards generating huge amount of income through the game of cricket.
After perusing the findings of the Assessing Officer and the CIT(A), it is evident to us that the assessee had earlier purchased the windmill in question, generated wind energy, sold the windmill to its sister concern and got the same leased back and raised claim of deduction in hand. The moot question before us is as to whether the said course of action adopted by the assessee is hit by section 80IA(3) or not. At this stage, we deem it appropriate to reproduce the said provision, which reads as under:
