TaxTMI 
TaxTMI 
2015 (2) TMI 538
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....ing to the assessment year 2006-07. 2. In this appeal, assessee has raised the following Grounds of Appeal :- "Based on the facts and circumstances of the case, BMC Software India Private Limited (hereinafter referred to as the 'Appellant') respectfully craves leave to prefer an appeal against the order dated 28 March 2013 passed by the learned Commissioner of Income Tax - I, Pune (hereinafter referred to as 'the learned CIT') under section 263 of the Income-tax Act, 1961 (hereinafter referred to as 'Act') on the following grounds which are independent of and without prejudice to one another: On the facts and in the circumstances of the case and in law, the Honorable CIT has: On validity of revision proce....
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....he show-caused the assessee as to why the assessment order dated 27.09.2010 (supra) should not be considered as erroneous in so far as it is prejudicial to the interests of the Revenue within the meaning of section 263 of the Act. The show-cause notice issued by the Commissioner was on account of two facets, namely, (i) the treatment of facility relocation of expenses of Rs. 1,07,24,297/-, which according to the Commissioner were capital in nature and that the Assessing Officer allowed assessee's claim for deduction without raising any query on this issue; and, (ii) that the assessee had failed to deposit to the credit of the Central Government, the taxes deducted at source in a few instances and therefore the corresponding expenditure of R....
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....diture corresponding to the outstanding amount of TDS was Rs. 1,32,83,963/-. As per the Commissioner, the aforesaid expenditure was liable to be disallowed in terms of section 40(a)(ia) of the Act. As per the Commissioner, once taxes are deducted at source by the assessee, it is a statutory obligation of the deductor-assessee to remit such taxes to the credit of the Central Government within the prescribed dates. In the event of failure to do so, the expenditure corresponding to such outstanding TDS was liable to be disallowed u/s 40(a)(ia) of the Act. As per the Commissioner, the failure of the Assessing Officer to disallow such expenditure in the assessment order dated 27.09.2010 (supra) has rendered the order was erroneous in so far as i....
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.... Central Government. With regard to the other plea that assessee was eligible for the deduction u/s 10A of the Act, the Commissioner did not accept the same. Firstly, according to him, the income of the assessee has to be first determined and the deduction u/s 10A of the Act comes next. As per the Commissioner, the "Determination of income cannot be wished away merely on reference to the deduction which the assessee may become eligible for." He, therefore, concluded that the failure on the part of the Assessing Officer to apply the provisions of section 40(a)(ia) of the Act adversely effected the determination of income thereby rendering the assessment order as erroneous. The Commissioner further went on to hold that assessee was not eligib....
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....lowance made because of the application of statutory provisions i.e. section 43B in the case of employer's contribution and section 36(1)(v) r.w.s. 2(24)(x) in the case of employees' contribution would only lead to increase in the 'business profits' of the assessee, and in the case of an assessee who is entitled to the benefits of section 10A of the Act, the claim of exemption u/s 10A of the Act would be available with reference to such enhanced income also. Alternatively, it has been pointed out that the expenditure sought to be disallowed u/s 40(a)(ia) of the Act represented Provision for expenses, which have indeed being reversed in the next year and offered to tax u/s 41(1) of the Act. On this basis also, it is sought to be canvassed th....
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....sed on the plea that the enhanced income resulting on application of section 40(a)(ia) of the Act, would be entitled for exemption u/s 10A of the Act. The factum of the assessee's enhanced income being eligible for the benefits of section 10A of the Act is not disputed by the Revenue at any stage. In-fact, the judgement of the Jurisdictional High Court in the case of Gem Plus Jewellery India Ltd. (supra) clearly supports the plea of the assessee. Therefore, it would be appropriate to infer that the disallowance of Rs. 1,32,83,963/- sought to be made by the Commissioner by invoking section 40(a)(ia) of the Act would result in an enhanced income which is eligible for the benefit of section 40(a)(ia) of the Act. If such be the situation, the m....