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TMI Blog2011 (4) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... rds GPF, before Tribunal in view of questions of facts and law involved vide minutes of the meeting of the Committee circulated vide letter dated 10th September, 2008. 3. Ground No.1 is general in nature and needs no adjudication as no arguments were placed in this behalf. 4. Ground No.2 is directed against CIT(A)'s order in confirming the action of the AO in not allowing deduction u/s 80IA of the Act claimed by the assessee as a telecom service provider. 5. The assessee is a public sector undertaking incorporated on 28.2.1986. It is engaged in providing basic telephone services in metro cities as also cellular and other value added telecommunication services. In the return of income, the assessee claimed deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee further pointed out that the Hon'ble Delhi High Court vide its order dated 15.12.2006 set aside the very issue of deduction u/s 80IA to the file of the AO for taking a decision afresh. He further contended that AO thereafter readjudicated the issue for all the aforesaid assessment years and after examining the facts and evidences upheld the eligibility of the assessee for claiming exemption u/s 80IA of the Act. The AO vide its order dated 29.12.2006 allowed the deduction u/s 80IA on proportionate basis in the ratio of the exchanges as against full exemption claimed by the assessee. The appeal filed by the assessee against the AO's order for allowing only proportionate exemption has been decided by the Tribunal vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng restored by the Tribunal to him, and in the fresh assessment, the AO allowed proportionate deduction u/s 80IA to the assessee. Therefore, the issue involved in all these appeals was with regard to quantum of deduction u/s 80IA of the Act. In the first round, the assessee's claim of deduction u/s 80IA was rejected. However, while framing the fresh assessment in the second round, the AO has accepted the position that the assessee is eligible to claim deduction, but he restricted the claim in terms of total telephone exchanges set up by the assessee. On the quantum of deduction, the Tribunal has taken the view as under vide paragraph 36 of its order:- "36. A plain reading of the above Section makes it clear that unlike provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce this technology has been totally abandoned and revamped, replacing the old, most of the income generated is attributable to such new technology exchanges. Merely on the number of old exchanges which were not in operation at all or had undergone totally revamped, income cannot be attributable to such old exchanges, we found that the new technology and the new exchanges made possible a multitude of new intelligent network services which are like cellular services, virtually calling card services, premium rate services, ISDN, calling line identification, call forward on busy and free lines, credit card payment scheme, telemart interactive voice response services, directory on CDRom etc. Various add on services such as Datacom, Inet, DID PA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have also nowhere declined the very fact of old exchanges totally being revamped, most of which were non-operating and under discarded position. As the income generated through so many services being rendered by the new exchanges which is eligible for claim of deduction u/s 80IA, we cannot restrict the claim in respect of the nominal income if any generated out of the old exchanges. Keeping in view the totality of facts and circumstances of the case, we direct the AO to attribute 75% (seventy five percent) of the income from various services enumerated above as having been carried out only by virtue of new exchanges having been installed. 25% of the income may be attributed to the old exchanges. Accordingly, the matter is restored back to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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