Proportionate disallowance of deduction claimed u/s. 80 IA of the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘D’, NEW DELHI
BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER
AND
SH. AMIT SHUKLA, JUDICIAL MEMBER
(THROUGH VIDEO CONFERENCING)
ITA No.7297/Del/2017, 6509/Del/2019 & 2234/Del/2019
Assessment Year: 2013-14, 2015-16 & 2010-11

Verizon Communications
India Pvt. Ltd. A-wing, 3rd
Floor, Radisson
Commercial Plaza, NH-8,
New Delhi-110037
PAN No AAACW3738L

vs

Addl. CIT Special Range-9,
New Delhi

Appellant by Sh. S. K. Aggarwal, CA
Sh. Alok Kumar Sinha, CA
Respondent by Sh. Gangadhar Panda, CIT
Date of hearing: 11/10/2021
Date of Pronouncement: 20/10/2021

ORDER

ITA No.2234/Del/2019 is the appeal by the assessee preferred against the order of the CIT(A)-15, Delhi dated 28.12.2018 pertaining to A.Y.2010-11.

2 The underlying facts in the issue are that the assessee commenced providing telecommunication services from May,2002. A deduction u/s. 80 IA of the Act was claimed by the assessee on profits derived from telecommunication services. A.Y.2007-08 was taken as the first of the 10 years out of a block of 15 years as stipulated under the provisions of section 80 IA of the Act. Accordingly the assessee claimed the deduction u/s. 80 IA for the first time in A.Y.2007-08. The claim was allowed by the AO.

3. The underlying facts in this issue are that the assessee contracts with its customers for providing data transmission services in India and overseas in a safe and secure manner. While the assessee possesses the requisite licenses and infrastructure to render the telecommunication services in India, it is not able to do so outside India. The assessee has entered into an agreement with MCI Communication Services Inc. (MCICS) and MCI International Inc. for providing telecommunication services outside India. This is a quid pro quo arrangement wherein the assessee provides similar telecommunication services to the Foreign Telecom Operators (FTOs) within India as and when they require. In consideration to the services received from FTO the assessee has made payments to the FTOs. The assessee separately received payments from the FTOs for the telecommunication services provided by it within India.

4. In the result, the appeal No.2234/Del/2019 is partly allowed and ITA No.7297/Del/2017 and 6509/Del/2019 are allowed.
Order pronounced in the open court on 20.10.2021.

Please find attached the enclosed file for the full judgement