2024 (5) TMI 152 - AT - Income Tax

ITAT allows foreign currency expenditure inclusion in export turnover for section 10AA deduction calculation

Renault Nissan Technology And Business Centre India Private Limited Versus The Assistant Commissioner of Income Tax, Corporate Circle 5 (1), Chennai

Renault Nissan Technology And Business Centre India Private Limited Versus The Assistant Commissioner of Income Tax, Corporate Circle 5 (1), Chennai - TMI Issues Involved:1. Exclusion of expenses incurred in foreign currency from export turnover for the purpose of computation of deduction u/s 10AA of the Income Tax Act.2. Inclusion of disallowance/addition as profits of the business in the computation of deduction u/s 10AA of the Act.3. Double addition of interest from fixed deposits in the computation of income.4. Granting TDS credit.Summary:Issue 1: Exclusion of Foreign Currency ExpensesThe assessee challenged the CIT(A)'s confirmation of the Assessing Officer's decision to exclude expenses incurred in foreign currency from export turnover for the purpose of deduction u/s 10AA of the Income Tax Act. The Tribunal noted that the Assessing Officer did not examine the details provided by the assessee regarding these expenses. The Tribunal found that the issue was covered by the decision of the Hon'ble Jurisdictional High Court of Madras in the assessee's own case for AY 2009-10, which held that such expenses should not be excluded from export turnover. Consequently, the Tribunal allowed the assessee's grounds on this issue.Issue 2: Inclusion of Disallowance/Addition as ProfitsThe assessee raised an additional ground regarding the non-inclusion of disallowance/addition as profits of the business in the computation of deduction u/s 10AA. The Tribunal noted that the CIT(A) had not adjudicated this issue and directed the CIT(A) to dispose of the matter by affording an opportunity of being heard to the assessee.Issue 3: Double Addition of Interest from Fixed DepositsThe assessee contended that there was a double addition of interest from fixed deposits in the computation of income. The Tribunal observed that the Assessing Officer had added the interest twice and noted that the assessee had filed a rectification application u/s 154 of the Act, which was still pending. The Tribunal directed the Assessing Officer to pass orders on the rectification application, thus allowing the assessee's ground for statistical purposes.Issue 4: Granting TDS CreditThe assessee challenged the CIT(A)'s confirmation of the Assessing Officer's decision to grant TDS credit only to the extent of Rs. 4,33,05,944/- as against Rs. 4,44,92,327/-. The Tribunal noted that the original assessment order had granted the full TDS credit and directed the Assessing Officer to give full TDS credit as was given in the original assessment proceedings, thereby allowing the assessee's ground for statistical purposes.Conclusion:Both appeals filed by the assessee are partly allowed for statistical purposes.Order pronounced on 30th April, 2024 at Chennai.