TaxTMI 
TaxTMI 
2015 (3) TMI 353
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....sessee. 2.1 The assessee is in the business of development and trading of softwares and hardwares. The return of income for the year under consideration was filed on 27/11/2006 declaring total loss of Rs. 20.98 crores. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. A reference under section 92CA(1) was made to the TPO. The TPO passed an order under section 92CA(3) on 22/10/2009 without making any adjustment. During the course of scrutiny assessment proceedings the AO noticed that the assessee has claimed deduction under section 10A at Rs. 42,94,66,344/- in respect of five units. The further observed that the deduction under section 10A was disallowed in A.Y 1998-99 and 1999-2000 on the ground that undertaking was formed by splitting or reconstruction of business already in existence and the undertaking has been carrying on its activities prior to 1995-96. It is further observed that the Tribunal has decided the issue in favour of the assessee and against the Department and in subsequent order, assessment orders of A.Y 1998-99 and 1999-2000 were followed by the AO and the Tribunal followed its own order.....
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....facts and the submissions made by the assessee Ld. CIT(A) observed that the Customs Authorities have recognized only three undertakings and sub-units shown by the assessee have not been recognized as separate undertakings by Custom Authorities /STP. Ld. CIT(A) further observed that all these facts were not earlier before AO/Appellate Authorities. Therefore, earlier finding shall be not applicable to the facts of the case. Ld. CIT(A) finally allowed the claim of deduction in respect of three units. Aggrieved by this the assessee is before us. 3. Ld. Counsel for the assessee reiterated what has been stated before first appellate authority. Ld. Counsel strongly submitted that in earlier years Tribunal has allowed the claim of deduction and, therefore, Ld. CIT(A) has erred in denying the claim of deduction in respect of all the units on frivolous grounds. The Ld. Counsel pointed out that in respect of five units the year of deduction is 9th year. In respect of two units the year of deduction is second year. Out of five units the assessee has claimed deduction in respect of three units only. It is the say of the Ld. Counsel that it is a settled proposition of law that without disturb....
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.... Hon'ble Bombay High Court and the Hon'ble Court in Income Tax Appeal No.311 of 2004 had an occasion to consider inter-alia the following question of law: "(a) Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the assessee was entitled to an exemption in respect of the profit derived from the STP undertaking on the basis of that the condition of section 10A(2) are fulfilled." And after considering the facts, Hon'ble High Court at para-13 of its order held that the first question of law would have to be ansered in the affirmative in favour of the assessee and against the Revenue. In respect of claim of deduction for units BG3 & HYD the year of deduction is second year which makes initial assessment year 2005-06. The claim of deduction in the initial assessment year was allowed by the Tribunal vide ITA No. 3514/Mum/2010. 5.2 Thus, it can be seen that the claim of deduction in respect of each unit where section 10A deduction has been claimed as per chart mentioned herein above. The assessee was allowed the deduction in the initial assessment year which make fact of the case squarely covered by the decision of the Hon'ble Gujarat....
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....ings the AO noticed that the assessee has claimed software purchases expenses of Rs. 4,28,65,714/- which includes purchases of Rs. 20,59,671/- claimed to be purchased by foreign branches of the assessee. The AO found that no TDS has been made on this amount on the ground that the purchases are outside India for outside India. In the light of the provisions of section 195(2) of the Act, the AO disallowed a sum of Rs. 20,59,671/- under section 40(a)(i) of the Act. 6.1 Aggrieved, assessee carried the matter before Ld. CIT(A). It was pointed out to the Ld. CIT(A) that the assessee has capitalized the said amount of Rs. 20,59,619/- and has claimed only depreciation of Rs. 6,17,901/-. Therefore, the provisions of section 40(a)(i) of the Act are not applicable for claiming of deduction under section 32 of the Act. After considering the facts and the submissions Ld. CIT(A) observed that the AO is incorrect in holding that the assessee has claimed the entire expenditure of Rs. 20,59,671/- as a revenue. Ld. CIT(A), therefore, restricted the disallowance only to the claim of depreciation of Rs. 6,17,901/-. Aggrieved by this the assessee is before us. 7. Ld. Counsel for the assessee vehe....
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....therein, Ground No.1 is accordingly dismissed. 11. Ground No.2 relates to the deletion of addition of Rs. 15,25,91,438/- on account of arbitration settlement claim. The AO has considered this issue at para-21 of his order. The AO observed that the assessee has made the claim on the basis of International Arbitration Award. The AO further observed that the arbitration award mention payment of Rs. 15 lacs Britain Pounds in respect of claim of M/s. New Water Consulting Ltd., including VAT and cost. The AO has further noticed that out of the said amount only 7,50,000 Britain Pounds were to be paid in F.Y. 2005-06 and the remaining amount was to be paid in F.Y. 2006- 07. However, the assessee has claimed the entire amount in A.Y 2006-07. The AO, accordingly, disallowed Rs. 15,25,91,238/-. Aggrieved, the assessee carried the matter before Ld. CIT(A). 11.1 Ld. CIT(A) has considered the grievance vide para-9 of his order. It was pointed out before the Ld. CIT(A) that as per arbitration award the settlement sum was payable in three installments, 7.50 lacs Britain Pounds + VAT by 15/04/2006 and 3.75 lacs Pounds + VAT by 15/5/2006. After considering the facts and the submissions, the Ld....