TMI Blog2019 (9) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. - I.T.A. No.8102/Mum/2010 - - - Dated:- 16-9-2019 - Shri C.N. Prasad, JM And Shri Manoj Kumar Aggarwal, AM For the Assessee : Shri J.D. Mistri-Ld. Sr. Counsel; Shri Ninad Patode For the Revenue : Chaudhary Arun Kumar Singh - Ld.Sr.DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. He erred in summarily holding that the revenues earned by the appellant are from trading in bandwidth, especially since a registered internet service provider can only render internet services in India and is not permitted to trade in bandwidth, 3. He failed to appreciate the fact that the appellant would not have invested heavily in infrastructure had it been a so called trader of bandwidth . 4. He erred in upholding that network support services provided by the appellant to Reach Global Services Limited are distinct and different from the services provided by it to its other clients. 5. He erred in concluding that the revenues earned by the appellant from provision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer without appreciating the fact that the customers of the appellant declined to respond to the creditor verification requests in spite of repeated follow ups by the appellant. 1.4 We have heard and considered the oral as well as written submissions / arguments advanced by respective representatives. Our adjudication to the issue would be as follows. 2.1 Upon perusal of quantum assessment order, it transpires that the assessee was denied deduction u/s 80IA(4)(ii) in view of the observations that (i) the assessee was a mere trader in bandwidth; (ii) the agreement with Govt of India was in respect of Internet Service Provider (ISP) and not mere as a Bandwidth provider; (iii) Its major source o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also noted that the entities to whom the assessee had sold the bandwidth were themselves internet services providers. In the above background, it was concluded that the assessee was nothing more than a trader in the bandwidth. Further, the assessee never used the purchased bandwidth to provide any internet service on its own and therefore the aforesaid deduction u/s 80IA was denied to the assessee. 2.4 Proceeding further, the assessee had reflected income of ₹ 2.21 crores stated to be received from RGSL. The perusal of the agreement revealed that the assessee was hiring out its equipment and network services to RGSL and providing the services to the customers of RGSL for which it was getting pro-ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f rendering of internet services. However, since the assessee had paid a sum of ₹ 3.06 Crores to RDSIPL against the same, the net result being a loss, it was held that the assessee was not entitled for deduction u/s 80- IA(4)(ii) against the same also. Aggrieved, the assessee is in further appeal before us. 4.1 The Ld. Sr. Counsel, drawing our attention to various documents placed in the paper-book, pitched for assessee s case by submitting that the assessee was, in fact, engaged in providing bandwidth as well as internet services to its customers since it was not possible to trade in bandwidth as wrongly noted by the lower authorities. It has been pleaded that lower authorities have completely misunderstood the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee to RGSL as well as to other customers was quite similar and therefore, there was no reason to deny the stated deduction to the assessee. 4.4 During the course of hearing, it also transpires that this is the only year in which this deduction has been claimed by the assessee since in all the other eligible years, the assessee has incurred losses. 4.5 The Ld. Sr. DR, on the other hand, contested the submissions by drawing our attention to the observations made by lower authorities in their respective orders. It has been asserted that assessee was a mere trader of bandwidth. 5. Upon careful consideration of stated facts circumstances, the bench formed an opinion that the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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