ITAT directs re-examination of deduction eligibility, investment write-off, software purchases, and salary disallowance.

The ITAT allowed the appellant's appeal for statistical purposes, directing the AO to re-examine the eligibility and amount claimed for deduction under section 10A. The ITAT also instructed a factual examination of the claim for investment write-off to determine if it could be treated as a revenue expenditure. Additionally, the ITAT directed the AO to allow software purchases as a revenue expenditure based on furnished vouchers and to verify and permit the audit fee. The disallowance of salaries paid to overseas employees was overturned after detailed submissions, with the ITAT upholding the CIT(A)'s decision and dismissing the Revenue's grounds.

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Issues Involved:
1. Claim of deduction u/s.10A of the Act
2. Investment written-off Rs. 4,09,46,675/-
3. Software purchases
4. Issue of audit fee Rs. 1 Lakh
5. Salary paid to overseas employees

I. Claim of deduction u/s.10A of the Act:
The appellant filed a belated return for AY 2009-10, resulting in various disallowances by the AO, including a deduction under section 10A. The AO disallowed the entire claimed amount of Rs. 6,75,96,165, stating that the prerequisites for claiming the deduction were not fulfilled. The CIT(A) acknowledged a typographical error and restricted the disallowance to Rs. 1,53,00,444. The ITAT held that the matter required re-examination by the AO, emphasizing the need to assess the eligibility of the claim and the amount claimed for deduction under section 10A. The issue of capital work in progress was also directed for re-examination due to lack of proper assessment by the AO.

II. Investment written-off Rs. 4,09,46,675/-:
The appellant claimed this amount as a write-off in the P&L A/c, which the AO disallowed as not a revenue expenditure. The CIT(A) concluded that the write-off did not meet the prescribed conditions. The ITAT decided that the claim required re-examination by the AO to assess whether the write-off could be allowed as a revenue expenditure, directing a factual examination of the contentions made by the appellant.

III. Software purchases:
The appellant, engaged in software development, claimed software purchases of Rs. 59,97,744, of which the AO accepted only a small portion. The ITAT noted that the vouchers were furnished before the CIT(A) and directed the AO to allow the amount as a revenue expenditure, as the issue was primarily about the lack of proof of software purchase.

IV. Issue of audit fee Rs. 1 Lakh:
The AO disallowed this amount due to non-deduction of TDS. The CIT(A) directed the AO to verify and allow the amount, leading the ITAT to reiterate the same direction, allowing the ground of appeal accordingly.

V. Salary paid to overseas employees:
The AO disallowed Rs. 3,32,00,000 claimed as salaries to overseas employees, citing lack of details and absence of branches in the relevant countries. The CIT(A) deleted the disallowance after detailed submissions and clarification by the appellant. The ITAT, after examining the provided information and clarification, upheld the CIT(A)'s decision, dismissing the Revenue's grounds on this issue.

In conclusion, the ITAT allowed the appellant's appeal for statistical purposes and dismissed the Revenue's appeal, emphasizing the need for re-examination and proper assessment by the AO on various issues raised during the proceedings.

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