2012 (6) TMI 824 - AT - Income Tax

Improper Deduction Granting Decision Reversed

The Tribunal found that the CIT(A) wrongly granted deduction under section 10B of the Income Tax Act, which was not admissible. The matter was remanded ... - Issues involved: Appeal against deletion of addition u/s 10B of the Income Tax Act, 1961 by CIT(A).Facts:- Assessee company filed return declaring total income.- Providing information technology services to foreign clients.- Earned dividend income, long-term capital gain, and interest income.- Claimed deduction u/s 10B.- Certificate from STPI filed.- AO found discrepancies and lack of Board approval for 100% export-oriented undertaking.- AO disallowed claim u/s 10B.CIT(A) Decision:- Assessee furnished replies to discrepancies.- CIT(A) held conditions for u/s 10B fulfilled.- CIT(A) allowed exemption u/s 10B based on fulfillment of conditions.- AO's disallowance deleted.Appellant's Submission:- Confusion on whether claim made u/s 10A or 10B.- Claim revised to u/s 10A before AO.- Form 56F filed for u/s 10A.- Discrepancies argued as frivolous.- Delay in submission of Softex forms condoned.- No discrepancy in FIRC and turnover.- Claim under u/s 10A should have been granted.Tribunal Decision:- Assessee initially claimed u/s 10B, denied by AO.- CIT(A) granted deduction u/s 10B, not admissible.- Matter restored to CIT(A) for fresh consideration.- CIT(A) to determine entitlement to exemption u/s 10A and fulfillment of conditions.- Assessee to be given opportunity to be heard.Result:- Appeal treated as allowed for statistical purpose.