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ITAT Upholds Deduction under Section 10A for Assessee in Favor, Excludes Certain Expenses The ITAT upheld the CIT(A)'s decision in favor of the assessee regarding the re-computation of deduction u/s 10A of the IT Act for the assessment year ...
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ITAT Upholds Deduction under Section 10A for Assessee in Favor, Excludes Certain Expenses
The ITAT upheld the CIT(A)'s decision in favor of the assessee regarding the re-computation of deduction u/s 10A of the IT Act for the assessment year 2010-11. The ITAT dismissed the revenue's appeal, citing the High Court's ruling that excluded expenses from export turnover should also be excluded from total turnover for the deduction. Additionally, the ITAT upheld the CIT(A)'s decision to allow the deduction for delay in remittance of employees' PF and ESI contributions, based on the High Court's judgment that payments made before the due date for filing returns are eligible for deductions.
Issues: 1. Re-computation of deduction u/s 10A of the IT Act, 1961. 2. Adding back employees' contribution towards PF and ESI for remittance beyond the due date.
Re-computation of deduction u/s 10A of the IT Act, 1961:
The appeal by the revenue challenged the CIT(A)'s order concerning the re-computation of deduction u/s 10A for the assessment year 2010-11. The AO had reduced certain foreign currency expenses from the export turnover, contending they were incurred in providing technical services abroad. The CIT(A), following a judgment of the jurisdictional High Court, allowed the appeal. The ITAT noted that the High Court had ruled that expenses excluded from export turnover should also be excluded from total turnover for deduction u/s 10A. Despite the revenue's disagreement with the Supreme Court's decision, the ITAT upheld the CIT(A)'s order based on the High Court's ruling, dismissing the revenue's appeal.
Adding back employees' contribution towards PF and ESI for remittance beyond the due date:
The AO disallowed a sum for delay in remittance of employees' PF and ESI contributions. The CIT(A) allowed the deduction based on judgments including one from the jurisdictional High Court. The ITAT referred to the High Court's decision stating that payments made before the due date for filing returns can be claimed as deductions. Accordingly, the ITAT upheld the CIT(A)'s decision in favor of the assessee, dismissing the revenue's appeal. The ITAT pronounced the order on August 14, 2015, dismissing the revenue's appeal in its entirety.
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