Tribunal allows Assessee's appeal on corporate tax issues, directs Assessing Officer to verify claims.

The Tribunal allowed the Assessee's appeal on corporate tax issues, directing the Assessing Officer to verify and consider the claims in accordance with the law. The appeal was allowed for statistical purposes, with the order pronounced on 7th April 2021. Corporate tax issues regarding the exclusion of other income, adjustment of foreign exchange gain, and unbilled revenue were addressed, with the Assessee's grounds allowed for statistical purposes in each instance.

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Issues involved:
Corporate tax issues not adjudicated in the previous order dated 11/12/2017 by the Tribunal.

Issue 1: Corporate Tax - Other Income not considered for Section 10A deduction
The appeal raised concerns about the exclusion of other income from the eligible business profits while computing Section 10A deduction. The Assessee argued that all income and expenses are closely related to the business and should be considered for deduction. The Assessee provided additional evidence to support their claim, including details of various types of other income. The Assessee relied on a Karnataka High Court decision emphasizing that other income is eligible for deduction under Section 10A. The Revenue, however, argued that there is no nexus between other income and business income based on the Assessee's own case for the assessment year 2006-07. The Tribunal directed the Assessing Officer (AO) to verify the details filed by the Assessee and consider the claim in accordance with the law. The ground raised by the Assessee was allowed for statistical purposes.

Issue 2: Adjustment of Foreign Exchange Gain
The Assessee raised concerns about the exclusion of foreign exchange gain from export turnover but not from the total turnover for computing Section 10A deduction. The Tribunal referred to a Supreme Court decision which settled this issue, directing the AO to compute the deduction in line with the Supreme Court's ruling. The ground raised by the Assessee was allowed for statistical purposes.

Issue 3: Adjustment of Unbilled Revenue
The Assessee contested the adjustment of unbilled revenue from the export turnover for computing Section 10A deduction without a corresponding reduction from the total turnover. The Assessee argued that the unbilled revenue represents work done pending client approval and acceptance. The Tribunal noted that the AO failed to follow the directions of the Dispute Resolution Panel (DRP) and remanded the issue to the AO for verification and consideration in accordance with the law. The ground raised by the Assessee was allowed for statistical purposes.

In conclusion, the Tribunal allowed the Assessee's appeal on the corporate tax issues adjudicated, directing the AO to verify and consider the claims in accordance with the law. The appeal was allowed for statistical purposes, and the order was pronounced on 7th April 2021.

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