Tribunal remits issue to Assessing Officer for fresh decision in line with law, referencing ITO Vs. Sak Soft Ltd.

The Tribunal remitted the issue back to the Assessing Officer to decide the matter afresh in accordance with the law, considering the decision of the Special Bench in the case of ITO Vs. Sak Soft Ltd. The appeal of the assessee was allowed for statistical purposes.

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Issues:
1. Exclusion of leased telecommunication line and foreign exchange expenses from export turnover for deduction under section 10B of the Act.

Analysis:
The appeal was filed by the assessee against the order of the Commissioner of Income Tax, (Appeals)-III, Chennai for the assessment year 2009-10 under section 143(3) of the Act. The main issue raised in the appeal was the exclusion of leased telecommunication line and other expenses incurred in foreign exchange from export turnover for computing the deduction under section 10B of the Act.

The counsel for the assessee argued that the Commissioner of Income Tax (Appeals) did not address the ground raised regarding the deduction of expenditure on the leased telecommunication line and other expenses incurred in foreign exchange from export turnover. The counsel referred to the decision of the Special Bench of the Tribunal in ITO Vs. Sak Soft Ltd., which held that such expenditures should be excluded from the total turnover for computing the deduction under section 10B of the Act.

On the other hand, the Departmental Representative contended that the Commissioner of Income Tax (Appeals) had directed the Assessing Officer to consider the claim of the assessee under section 10A of the Act if the deduction under section 10B was not allowable. The Departmental Representative highlighted that the Commissioner directed the Assessing Officer to verify the claim and conditions under section 10A and allow the claim if applicable.

After hearing both sides and reviewing the orders of the lower authorities, the Tribunal found that the assessee had originally claimed deductions under both section 10B and alternatively under section 10A of the Act during the assessment proceedings. The Tribunal noted that the Commissioner of Income Tax (Appeals) had instructed the Assessing Officer to verify the conditions under section 10A and allow the claim accordingly. Therefore, the Tribunal remitted the issue back to the Assessing Officer to decide the matter afresh in accordance with the law, considering the decision of the Special Bench in the case of ITO Vs. Sak Soft Ltd.

As a result, the appeal of the assessee was allowed for statistical purposes, and the order was pronounced in an open court on the specified date in Chennai.

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