Appeal partly allowed, remitted for reconsideration on transfer pricing, disallowance, set-off issues.

The appeal was partly allowed, with various issues remitted back to the Assessing Officer or CIT(A) for reconsideration following the Tribunal's directions and earlier decisions. Notably, the Tribunal directed the AO to follow previous rulings on transfer pricing adjustments, disallowance under Section 14A, set-off of losses of STP undertakings, and other specific issues related to deductions and exclusions under different sections of the Income Tax Act.

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Issues Involved:
1. General Grounds of Appeal
2. Transfer Pricing Adjustments
3. Disallowance under Section 14A
4. Set-off of Loss of STP Undertakings
5. Expenditure on Software Imports
6. Allocation of Corporate Expenses
7. Software Development Centres Outside India
8. Exclusion of Other Income from Profits of 10A Units
9. Exclusion of VAT/GST from Export and Total Turnover
10. Exclusion of Communication Link and Other Reimbursements
11. Exclusion of Expenditure in Foreign Currency from Export Turnover
12. Collections Beyond 30th September 2007
13. Deduction under Section 10A for Undertakings at Bangalore
14. Deduction under Section 80IB (Allocation of Corporate Overheads to 80 IB Unit)
15. Trading Activity of Monitors & Printers
16. Exclusion of Other Income from Profits of 80-IB Units
17. Deduction under Section 80IC
18. Exclusion of Other Income from Profits of 80-IC Units
19. Deduction under Section 80-IAB
20. Credit for Foreign Taxes Paid
21. Credit for TDS
22. Interest under Sections 234B and 234D

Detailed Analysis:

1. General Grounds of Appeal:
The grounds raised at S.Nos.1 to 4 are general in nature and no separate adjudication is called for thereon.

2. Transfer Pricing Adjustments:
The grounds of appeal at S.Nos.5 to 10 relate to the transfer pricing adjustments. The assessee contested the TPO's order suggesting a transfer pricing adjustment of Rs. 9,67,89,370 on the issue of interest chargeable to its associated enterprises. The Tribunal found that a similar issue was considered in the assessee's own case for Assessment Year 2004-05, where it was held that TP adjustment is possible only if comparable uncontrolled transactions are established. The Tribunal directed the Assessing Officer to follow the directions given in the orders for earlier years.

3. Disallowance under Section 14A:
The grounds raised at S.Nos.11 to 14 pertain to disallowance under section 14A. The assessee argued that the AO erred in not accepting the actual expenditure incurred in relation to exempt income and instead made an adhoc disallowance. The Tribunal restored this issue back to the file of the AO with a direction to decide the issue afresh by applying the ratio of the judgment of the Hon'ble High Court of Bombay in the case of Godrej & Boyce Mfg. Co. Ltd.

4. Set-off of Loss of STP Undertakings:
The grounds raised at S.Nos.15 to 20 concern the set-off of losses of STP undertakings against other business income. The Tribunal directed the AO to set off brought forward losses of the units for which the assessee has disclosed positive income for the purpose of claiming deduction under section 10A.

5. Expenditure on Software Imports:
The grounds of appeal at S.Nos.21 to 25 relate to the disallowance of depreciation on imported software products. The Tribunal, following its earlier decision in the assessee's own case, decided this issue in favor of the assessee.

6. Allocation of Corporate Expenses:
The grounds of appeal at S.Nos.26 to 29 pertain to the allocation of corporate expenses to undertakings under section 10A. The Tribunal, following its earlier decision, held that no artificial allocation of expenses should be made and decided the issue in favor of the assessee.

7. Software Development Centres Outside India:
The grounds of appeal at S.Nos.30 to 32 concern the exclusion of profits from software development centers outside India from the deduction under section 10A. The Tribunal remitted this issue back to the AO for necessary action as per its earlier decision.

8. Exclusion of Other Income from Profits of 10A Units:
The grounds raised at S.Nos.33 to 38 relate to the exclusion of other income from the profits of 10A units. The Tribunal, following its earlier decision, held that interest income and income from the sale of scrap should be included in the profits of the undertaking eligible for deduction under section 10A.

9. Exclusion of VAT/GST from Export and Total Turnover:
The ground raised at S.No.42 pertains to the exclusion of foreign taxes (VAT/GST) from export turnover. The Tribunal, following its earlier decision, dismissed the assessee's ground.

10. Exclusion of Communication Link and Other Reimbursements:
The grounds of appeal at S.Nos.43 to 48 and 57 to 58 concern the exclusion of reimbursements and telecommunication expenses from export turnover. The Tribunal remitted this issue back to the AO for fresh examination.

11. Exclusion of Expenditure in Foreign Currency from Export Turnover:
The grounds raised at S.Nos.49 to 56 relate to the exclusion of expenditure in foreign currency from export turnover. The Tribunal, following its earlier decision, directed the AO to follow the findings of the Tribunal.

12. Collections Beyond 30th September 2007:
The grounds of appeal at S.Nos.59 to 62 concern the exclusion of collections beyond 30th September 2007 from export turnover. The Tribunal directed the AO to include in export turnover the collections made after the expiry of six months.

13. Deduction under Section 10A for Undertakings at Bangalore:
The grounds raised at S.Nos.63 to 74 pertain to the denial of deduction under section 10A for undertakings at Bangalore. The Tribunal, following its earlier decision, directed the AO to allow the deduction under section 10A.

14. Deduction under Section 80IB (Allocation of Corporate Overheads to 80 IB Unit):
The grounds of appeal at S.Nos.75 to 77 concern the allocation of corporate overheads to the 80 IB unit. The Tribunal, following its earlier decision, directed the AO not to allocate any corporate overheads to the 80 IB unit.

15. Trading Activity of Monitors & Printers:
The grounds raised at S.Nos.78 to 80 relate to the treatment of the sale of monitors and printers as a trading activity. The Tribunal, following its earlier decision, held that the profit from the sale of monitors and printers is not to be included in the computation of deduction under section 80 IB.

16. Exclusion of Other Income from Profits of 80-IB Units:
The ground raised at S.No.81 concerns the exclusion of other income from the profits of 80-IB units. The Tribunal held that rental income and provision no longer required should not be included in the profits eligible for deduction under section 80 IB.

17. Deduction under Section 80IC:
The grounds raised at S.Nos.82 to 84 pertain to the allocation of corporate overheads to units eligible for deduction under section 80 IC. The Tribunal, following its earlier decision, deleted the allocation of corporate overheads made by the AO.

18. Exclusion of Other Income from Profits of 80-IC Units:
The ground raised at S.No.85 concerns the exclusion of other income from profits of 80-IC units. The Tribunal found this ground to be infructuous as no dispute on this issue arises from the order of the DRP.

19. Deduction under Section 80-IAB:
The grounds raised at S.Nos.86 to 89 relate to the allocation of corporate overheads to SEZ units and the exclusion of other income while computing the deduction under section 80-IAB. The Tribunal, following its earlier decision, directed the AO not to allocate corporate expenditure to the SEZ unit.

20. Credit for Foreign Taxes Paid:
The ground raised at S.No.90 concerns the credit for foreign taxes paid. The Tribunal, following its earlier decision, restored the matter to the file of the CIT(A) for reconsideration.

21. Credit for TDS:
The ground raised at S.No.92 pertains to the credit for TDS. The Tribunal directed the AO to examine and verify the TDS claims of the assessee and to allow eligible TDS.

22. Interest under Sections 234B and 234D:
The grounds raised at S.Nos.93 to 96 concern the levy of interest under sections 234B and 234D. The Tribunal held that the charging of interest is consequential and mandatory, and directed the AO to recompute the interest chargeable while giving effect to its order.

Conclusion:
The appeal is partly allowed, with various issues remitted back to the Assessing Officer or CIT(A) for reconsideration in light of the Tribunal's directions and earlier decisions.

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