TaxTMI 
TaxTMI 
2012 (6) TMI 632
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.... the appellant is not engaged in the business of rendering technical services outside India. 6. That the Learned CIT-A /AO having excluded expenditure incurred in foreign currency amounting to Rs. 47,89,64,483/- from the export turnover ought to have excluded similar amount from the Total Turnover. 7. The appellant denies the liabilities for interest u/s 234B & D. Further prays that interest if any should be levied only on returned income. 8. No opportunity has been given before levy of interest u/s 234B & D of the Act. 9. Without prejudice to the appellant's right of seeking waiver before appropriate authorities the appellant begs for consequential relief in the levy of interest u/s 234B and D. 10. For the above and other grounds and reasons which may be submitted during the course of hearing of this appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered." 3. Ground Nos. 1, 2 & 10 are general in nature, so do not require any comment on our part. 4. Vide ground Nos.3 to 5, the grievance of the assessee relates to claim of deduction of Rs. 23,17,32,627 u/s. 10A of the Income-tax Act, 1961 [hereinafter referred to as "the Act" in short"]. 5....
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....pecific to an undertaking registered under STPI Scheme engaged in export of software and an undertaking otherwise eligible for deduction should not be denied the same under the contention that the undertaking has a new owner. Reliance was placed on the following decisions of ITAT: (i) DCIT v. LG Soft India Pvt. Ltd. (ITA Nos. 623 & 847/Bang/2010). (ii) ITO v. GXS Technology Center Pvt. Ltd. (ITA No.616/Bang/2009. It was also contended that restrictive provision in the form of sub-section (9) which provided for discontinuance of benefit of tax holiday in case of transfer of an undertaking enjoying tax holiday had been withdrawn from the F.Y. 2003-04 and a new provision under sub-section (7A) had been simultaneously introduced, therefore the omission of sub-section (9) was to be read to mean removal of restriction for all modes of transfer of an eligible undertaking and not restricted to amalgamations and demergers only. A reference was also made to Circular No.7 of 2003 issued by the Central Board of Direct Taxes wherein a clarification with regard to subsection (7A) of section 10A of the Act was made stating that this subsection has been inserted with a view to give boost to the....
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....ets individually, rather the entire business undertaking comprising of assets, liabilities, contracts, employees, licences etc. was taken over by the subsidiary company. It was further submitted that STPI had endorsed the transfer by substituting the name of operating agency in their report and it was not a case of surrender of licence and issue of a new licence to the assessee, it was the case of the assessee that since the existing business undertaking continued in the same shape and style without any change or disruption and the deduction u/s. 10A being undertaking specific, there was no question of applying any of the qualifying conditions laid down in section 10A(2) of the Act to the assessee. It was also submitted that the transaction was a mere conversion and could not be qualified as a transfer. 10. The ld. CIT(Appeals) after considering the submissions of the assessee observed that a new company had come into existence and taken over the assets of branch pursuant to a slump sale, by virtue of its incorporation and by taking over these assets, a new business entity had undeniably come into existence, though it might have been involved in exactly the same business run with ....
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....sessee reiterated the submissions made before the authorities below and further submitted that this issue stands covered in favour of the assessee by the decisions of the ITAT Bangalore, in the following cases:- (i) DCIT v. LG Soft India Pvt Ltd (ITA No 623 & 847/Bang/2010). (ii) ITO v. GXS Technology Centre Pvt. Ltd (ITA No 616/Bang/2009) 13. In his rival submissions, the ld. CIT(DR) strongly supported the orders of the authorities below. 14. We have considered the submissions of both the parties and carefully gone through the material available on record. It is noticed that a similar issue having identical facts has been decided by the ITAT Bench 'B' Bangalore in ITA No.623 & 847/Bang/2010 for the assessment years 2004- 05 & 2005-06 respectively in the case of DCIT v. M/s. LG Soft India Pvt. Ltd., order dated 19.05.2010 wherein vide para 10 it has been held as under:- "10. We considered the rival contentions and the facts of the case reflected in the orders passed by the lower authorities. As rightly pointed out by the CIT(A), the assessee's undertaking existed in the same place, form and substance and did carry on the same business before and after the change in the legal c....
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....& 5 which read as under:- "4. The learned departmental representative strongly supported the order of the AO while the learned counsel for assessee supported the order of the CIT(A) and also placed reliance upon the decision of the 'B' Bench of this Tribunal in the case of Dy.CIT v. M/s. L.G. Soft India Pvt. Ltd. in ITA Nos.623 & 847/Bang/2010 dated 19-5-2010 wherein it has been held that where an undertaking existed in the same place, form and substance and did carry on the same business before and after the change in the legal character of the form of organization, the assessee is eligible for deduction u/s. 10A of the Act. He also placed reliance upon the decision of the Calcutta High Court in the case of CIT vs. P.K. Engg. & Forging (P) Ltd., reported in 87 Taxman 101 wherein, while considering the assessee's claim for deduction u/s. 80J, it was held that where the industrial undertaking run by a firm which had been allowed deduction u/s 80-J for a period of 5 years, it would be entitled to benefit of residuary period. He also placed reliance upon the decision of the Delhi Bench of the Tribunal in the case of Tech Books Electronics Services (P) Ltd. vs. Addl. CIT wherein....
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....2. In his rival submissions, the ld. CIT(DR) although supported the orders of authorities below, but could not controvert the above contention of the ld. counsel for the assessee. 23. We have considered the submissions of both the parties and carefully gone through the material available on record. It is noticed that an identical issue has been decided in favour of the assessee by the Special Bench of ITAT Chennai in the case of ITO v. Sak Soft Ltd. 313 ITR (AT) 353 (Chennai)(SB) wherein it has been held as under: "To say that in the absence of any definition of "total turnover" for the purpose of section 10B, there is no authority to exclude anything from the expression as understood in general parlance would be wrong, as there has to be an element of turnover in the receipt if it has to be included in the total turnover. That element is missing in the case of freight, telecom charges or insurance attributable to the delivery of the goods outside India and expenses incurred in foreign exchange in connection with the providing of technical services outside India. These receipts can only be received by the assessee as reimbursement of such expenses incurred by him. Mere reimbursem....