TaxTMI 
TaxTMI 
2010 (12) TMI 142
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.... of the Act when in the previous years, the assessee had claimed deduction under Section 80HHE of the Income Tax Act. To put it otherwise, the issue is as to whether sub-Section (5) of Section 80 HHE of the Act would bar the assessee from seeking benefit under Section 10A of the Act if the preceding year, benefit was claimed under Section 80HHE to Section 10A is not permissible? (2) Whether finding recorded by the ITAT that the sale proceeds in convertible foreign exchange had been brought by the assessee in India within the extended time is based on correct facts and relevant material and thereby suffers from factual perversity? (3) Whether ITAT was correct in law in allowing exemption under Section 10A of the....
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....ion 10A of the Act on the entire claim and, in particular, in respect of Japan Branch, on the ground that the said branch is not covered under Section 10A(2) of the Act. The assessee had relied upon many documents which were furnished before the Assessing Officer in the course of assessment proceedings vide letter dated 27th March, 2006 but the Assessing Officer did not accept the explanation of the assessee and denied the exemption on revenues of Japan Branch. The CIT (A) however allowed the expenses accepting the submissions of the assessee and observed "there is no doubt the Japan Branch has been opened by the appellant as per the agreement with the Japanese Company to also provide onside Development service with approval of RBI and also....
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.... the approval of RBI. It has been incurring all sorts of expenses for maintaining its Branch Office. The assessee is thus not entitled to deduction u/s 10A on the revenues of the Tokyo Branch Office under 10A/80 HHE of the Act. It is submitted that the nature of the operations of the said branch office can be gathered from various letters filed by the assessee to Development Commissioner, Noida Export Processing Zone, the General Manager, RBI, etc. In fact, the submission of the appellant becomes crystal clear by referring to the letter of the assessee addressed to the Manager, Bank of America which leads, "…in view of the current slide down which has hit the US software market most, Japan is emerging as a critical market in the Internati....
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.... the RBI which was not backed by any evidence. 8. In order to appreciate the rival contentions, it is necessary to note of the provisions contained in Section 10A of the Act. This Section carves out special provision in respect of newly established 100% export oriented undertakings. It, inter alia, stipulates that deduction of such profits and gains as are derived by an undertaking for export of articles or computer software shall be allowed from the total income of the assessee for a period of ten consecutive assessment years. 9. The assessee is dealing with the export of computer software, it is 100% export oriented unit. There is no dispute that the assessee is engaged in the business of development or development of software throu....
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....ations, that would not be treated as on site development. 12. We are in agreement with this interpretation suggested by learned counsel for the Revenue. However, what we find from the record that matter is not examined in this perspective by the authorities below. The Assessing officer while rejecting the claim of the assessee observed as under:- "It may further be mentioned that the assessee has claimed 10A in respect from its branch at Japan for an amount of Rs. 1851545/-. The provisions of Section 10A are only applicable in case of an industrial undertaking manufacturing or producing articles as approved in the sub Section set up in a free trade zone/electronic hardware technology park/software technology park after certain due dates.....