Assessee wins appeal on link charges, depreciation rates, and deduction computation.

The Tribunal decided in favor of the assessee on various grounds including the reduction of link charges from export turnover, allowance of higher depreciation rates on networking equipment/computer peripherals and electrical installations, and computation of deduction under Section 10A without setting off brought forward losses and unabsorbed depreciation. The appeal was allowed, and the order was pronounced on August 16, 2017.

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Issues Involved:
1. Completion of assessment under Section 143(3) read with Section 144C(13) at an income of Rs. 3,29,10,533.
2. Reduction of link charges from "export turnover" without similar adjustment from "total turnover".
3. Disallowance of depreciation on networking equipment/computer peripherals.
4. Disallowance of depreciation on electrical installation.
5. Computation of deduction under Section 10A after setting off brought forward losses and unabsorbed depreciation.
6. Charging of interest under Sections 234B and 234C.

Detailed Analysis:

GROUND NO.1:
- This ground is general in nature and does not require adjudication.

GROUND NO.2 & 2.1:
- The AO reduced link charges amounting to Rs. 15,89,95,369 from the export turnover under clause (iv) of Explanation 2 of Section 10A without making a similar adjustment from the total turnover. This was despite the fact that the issue had been previously decided in favor of the assessee for AY 2004-05 by the ITAT and upheld by the Delhi High Court.
- The Tribunal followed its earlier decision in the assessee's own case for AY 2004-05, which mandated that the total turnover and export turnover should be treated similarly. Therefore, the link charges should also be reduced from the total turnover.
- The Tribunal determined grounds no.2 & 2.1 in favor of the assessee.

GROUNDS NO.3 & 3.1:
- The AO allowed depreciation on certain networking equipment/computer peripherals at 25% by treating them as plant and machinery instead of the 60% claimed by the assessee.
- The Tribunal relied on the Delhi High Court's judgment in CIT vs. BSES Rajdhani Powers Ltd., which allowed 60% depreciation on computer accessories and peripherals, considering them integral parts of the computer system.
- The Tribunal decided grounds no.3 & 3.1 in favor of the assessee, allowing 60% depreciation on the said items.

GROUND NO.4:
- The AO allowed depreciation on electrical installations at 15% instead of 25% claimed by the assessee.
- The Tribunal referred to the Gujarat High Court's decision in CIT vs. Express Resorts & Hotels Ltd., which treated electrical installations as plant and machinery, thus qualifying for 25% depreciation.
- The Tribunal decided ground no.4 in favor of the assessee, allowing 25% depreciation on electrical installations.

GROUNDS NO.5, 5.1 & 5.2:
- The AO computed the deduction under Section 10A after setting off brought forward losses and unabsorbed depreciation.
- The Tribunal referred to the Supreme Court's judgments in CIT vs. Yogokawa India Ltd. and CIT vs. JP Morgan Services India Pvt. Ltd., which clarified that deduction under Section 10A should be computed before setting off brought forward losses and unabsorbed depreciation.
- The Tribunal directed the AO to compute the deduction under Section 10A accordingly and decided grounds no.5, 5.1 & 5.2 in favor of the assessee.

GROUND NO.6:
- This ground was deemed consequential and required no separate adjudication.

Conclusion:
- The appeal of the assessee was allowed, and the order was pronounced in open court on August 16, 2017.

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