TaxTMI 
TaxTMI 
2013 (2) TMI 261
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....same. 4). The Ld. CIT(A) has grossly erred on facts as well as in law in confirming disallowance of Rs. 1,65,000/- for purchase/hiring of software u/s 40(a)(ia). 5). The appellant craves leave to add, alter, modify and withdraw any ground of appeal before or during the appellate proceedings." 3. Briefly stated facts are that the case of the assessee was selected for scrutiny and assessment u/s 143(3) of the Income Tax Act, 1961 (herein after refer to as the Act) was framed vide order dated 11.12.2009. The Assessing Officer while framing the assessment disallowed the claim of exemption u/s 10A, depreciation and made disallowance u/s 40(a)(ia). 4. At the request of Ld. Counsel for the assessee, ground No.-1 & 2 are taken together. The first effective ground is regarding disallowance of relief u/s 10A of the Act. Ld. Counsel for the assessee, Sh. V.K.Aggarwal, submitted that the assessee company is engaged in the export of engineering based software series since May 2003 and the appellant vide its application dated 10.04.2006 applied for registration with Software Technology Parks of India (STPI) for conversion from DTA to STP unit. Th....
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....ties below was that as per para 4, the assessee failed to intimate the commercial production to STPI. He submitted that this cannot be termed as mandatory condition, as has been admitted by the STPI in the later years that the intimation regarding commercial production to STPI was immaterial. Therefore, he submitted that the authorities below grossly erred in rejecting the claim on the basis that no intimation was given to STPI. Further, he submitted that an intimation dated 26.03.2007 was duly given acknowledgement, thereof, is enclosed at page 3 of the paper book. Therefore, the condition regarding intimation does not survive. He submitted that another basis which the Ld. CIT(A) has taken for declining the relief u/s 10A is that the purchase of computers amounting to Rs. 1,78,940/- on 19.08.2006 from M/s Gaurav Computers service has been treated as a bogus and, therefore, the commercial production has not been started in STPI. He submitted that a perusal of the schedule 2 to the balance sheet pertaining to fixed assets clearly indicates that cost of the computers in the opening balance is Rs. 6,74,310/- and an addition of Rs. 3,70,340/- was during the year. Similarly, the value o....
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....2006, does not qualify for exemption u/s 10A. He further observed that the first purchase of computer was made on 01.07.2006, therefore, the 5 export orders executed before 01.07.2006 are not entitled to relief u/s 10A. He submitted that the Assessing Officer failed to appreciate that the advance taken on 12.04.2006 but the sale was affected on 06.05.2006, as per the invoices raised. He submitted that the work was executed after 03.05.2006 and 4 invoices out of 5 invoices were between 03.05.2006 and 01.07.2006. Therefore, during the previous year 2006-07, all the sales were affected after the date of permission from STPI. He submitted that the date of booking the order is immaterial because the profit accrues only when sale is affected by STP unit, it will be entitled to relief u/s 10A. He relied on the decision of Hon'ble ITAT, Banglore rendered in the case of Infosys Technologies Ltd. vs JCIT;(2007) 108 TTJ (Bang) 282, therefore the appellant have effected all the sales after 03.05.2006 after becoming STPI has entitled to relief u/s 10A. He submitted that without prejudice to the submissions made here in before the STPI has clearly mentioned that the intimation for commercial pro....
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....rted to STP unit and, therefore, there was no restructuring and or transferring of the business as such. Therefore, in our considered opinion, the conditions as mentioned in section 10A(2)(ii) & (iii) are not violated as there is neither splitting up or the re-construction of the business already in existence because conversion and splitting up or the re-construction are completely different terms. Moreover, conversion cannot be termed as transfer. In our view, the circular as relied by the Ld. Counsel for the assessee would be applicable on the present case also. We are fortified by the decision of the Hon'ble Coordinate Bench rendered in the case of ITO vs Forsee Information Systems (P) Ltd (supra). Further, the finding of the authorities below that the intimation with regard to commercial production was not given, therefore, the permission as given STPI became non-existent and consequently, disentitled the assessee company from claiming relief u/s 10A, this view of the authorities below is not acceptable as there is nothing on record suggesting that permission granted was subsequently, cancelled or withdrawn on the basis that the assessee could not give intimation to STPI in ....
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....s mentioned in the bill of M/s Gaurav Computers, was a residential house of one Sh. Yadav, who is an employee of the Transport Department of the U.P. Government and informed that no such firm in the name of M/s Gaurav Computer ever existed there. He submitted that the assessee failed to submit any convincing evidences to controvert the findings of the inspector. In rejoinder, the Ld. Counsel for the assessee submitted that the assessee ought to have been given a chance to rebut the findings of the Inspector. Moreover, he submitted that the assessee has given all requisite details and not prudent person who make payment to a non-existing entitle. 10. We have heard the rival contentions perused material available on record. The Assessing Officer has disallowed the claim of depreciation on the basis that the firm was not existing at the given address. From the records, it is transpired that the Assessing Officer has not made inquiry from the office of the assessee about the installation of computers etc. But fact remains that assessee did not controvert the report of Inspector by seeking cross-examination at any stage. The Assessing Officer has also not given any finding in respect....