TaxTMI 
TaxTMI 
2004 (2) TMI 293
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....lowance of prior period expenses to the extent of Rs. 2,19,892 was not pressed by the assessee during the course of the hearing of the appeal. Hence, this ground is rejected. 3. We have heard the rival submissions and carefully perused the orders of the authorities below and documents placed on record. Brief facts of the case borne out from the record are that the assessee has claimed deduction under s. 80-O at Rs. 77,34,317 but the AO has allowed deductions on the net profit arrived at after deducting proportionate expenses from the total convertible foreign exchange brought into India on the basis of Tribunal, Mumbai Bench decision in the case of Tata Unisys Ltd. vs. Dy. CIT (1996) 56 TTJ (Bom) 193 : (1993) 58 ITD 334 (Bom), wherein it....
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....the form of convertible foreign exchange would have to be considered for the purpose of allowing deduction under s. 80-O without deducting proportionate expenses in India. The learned counsel for the assessee further contended before the CIT(A) that since the direct project expenses has already been reduced from the gross receipt of convertible foreign exchange, the deduction should be allowed on the net earnings. Finding no force in the contention of the assessee, the CIT(A) confirmed the additions and while doing so, he relied upon the judgment of the Special Bench of the Tribunal in the case of Petroleum India International vs. Dy. CIT (1999) 65 TTJ (Mumbai)(SB) 671, besides other judgments. 5. Now the assessee has preferred an appeal....
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....hange and after adjusting the same against the total receipts, he worked out the eligible deduction under s. 80-O of the Act. The learned Departmental Representative further invited our attention to various judgments in support of his contention that the deduction under s. 80-O can only be allowed on a net income earned on the receipt of foreign convertible exchange, which are as under: (1) CIT vs. Chemical & Metallurgical Design Co. Ltd. (2001) 165 CTR (Del)(FB) 201 : (2001) 247 ITR 749 (Del)(FB); (2) Continental Construction Ltd. vs. CIT (1992) 101 CTR (SC) 386 : (1992) 195 ITR 81 (SC); (3) Consolidated Coffee Ltd. vs. State ofKarnataka(2002) 176 CTR (SC) 98 : (2001) 248 ITR 432 (SC); (4) CIT vs. Sabarkantha Zilla Kharid Vecha....
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....,455 x 2,25,98,067 Overheads x Overseas income 15,30,56,548 Total Consultancy Income 58,36,520 1,04,55,945 Claim under s. 80-O to the extent of 50 per cent : 52,27,973 8. We have also carefully perused the aforesaid judgments referred to by the parties and we are of the view that now controversy with regard to the claim of deductions whether it is to be worked out on gross receipts of foreign convertible exchange or it is net receipt, after adjusting the expenditure against these foreign convertible exchange has been set at rest by the Special Bench of the Tribunal in the case of Petroleum India International vs. Dy. CIT and judgment of the jurisdictional High Court i....