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2015 (8) TMI 557
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....re expenditure of Rs. 37,07,994/- The learned CIT(A) has erred in treating the software expenditure of Rs. 37,07,994/- as capital in nature and upholding the disallowance made by the AO. Ground No 2 - Disallowance of deduction claimed under Section 35D of the Act in relation to expenditure incurred for increase in authorised share capital The learned CIT(A) has erred in upholding the disallowance of Rs. 3,08,000/- made by the AO in relation to the expenditure incurred for increase in authorized share capital of the company. Ground No 3 - Ad-hoc disallowance of certain business expenditure The learned CIT(A) has erred in upholding the following ad-hoc disallowances made by the AO: (a) Entertainment expense, gift expense and general expense of Rs. 91,793; b) Lease rent on vehicles, petrol and vehicle maintenance and vehicle taxes and registration of Rs. 100,000; c) Guest house expenses of Rs. 50,000; d) Telephone expenses of Rs. 100,000; e) Staff welfare expense of Rs. 73,518; and (f) Business promotion expenditure of Rs. 50,000. Ground No 4 - Rejection of claim of deduction of premium of Rs. 3,91,80,000 paid towards lease of land made during the cour....
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....was very thin and it was dependent upon the facts and circumstances of the case. As per the Assessing Officer, the assessee during the year had incurred substantial expenditure on software totaling Rs. 37,81,284/-. Considering the nature of software procured by the assessee, the Assessing Officer observed that the said software expenses were recurring expenses or expenses of general repairs and maintenance, to be incurred every year. Once the expenditure has been incurred for the said account of software which need not be incurred for another next 4-5 years, as the expenditure on the various items of software entailed enduring benefit to the assessee over a period of time, the same was held to be capital expenditure and depreciation @ 25% as applicable to Plant & Machinery was allowed by the Assessing Officer. 7. The CIT(A) vide para 11 at pages 13 onwards observed that Annual subscription charges of Rs. 73,920/- were revenue expenditure in nature. The CIT(A) thereafter placed reliance on the ratio laid down by the Special Bench of Delhi Tribunal in Amway India Enterprises Vs. DCIT (2008) 114 TTJ (Del)(SB) 473 and observed that even where there was license to use the software, t....
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.... on the functional test. Another expenditure of Rs. 3,75,075/- being expenditure on conversion cost from R3 license to MySAP was also held to be capital expenditure by the CIT(A). 9. The assessee is in appeal against the order of CIT(A). 10. The learned Authorized Representative for the assessee pointed out that the assessee was in the business of developing software and also for SAP implementation and maintenance. For the operations of its business, two softwares i.e. Windchill software and flexible Pro-engineer softwares were acquired, which were claimed to be revenue in nature. Reliance in this regard was placed on the ratio laid down by the Hon'ble Bombay High Court in CIT Vs. Raychem RPG Ltd. (2012) 346 ITR 138 (Bom). 11. The learned Departmental Representative for the Revenue placed reliance on the order of CIT(A) with special reference to para 15 of the order of CIT(A). 12. We have heard the rival contentions and perused the record. The assessee was engaged in the business of software development and provisions of software services. As per the assessee, the range of services included IT consultancy, transfer of SAP licenses, SAP implementation and maintenance, pr....
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....red by the assessee was on acquisition of license to use the software, but there is no acquisition of ownership rights of the software. The assessee had incurred expenditure of Rs. 12,56,870/- on the acquisition of Windchill Software which is a PDM software purchased for developing resources and providing customization and implementation services to customers. Another expenditure of Rs. 16,86,394/- was incurred for the acquisition of Flexible Pro-Engineer software, which was admittedly, first time acquisition and was acquisition of rights to run the said software. The Windchill software was upgraded regularly and similarly, the other software Flexible Pro-Engineer software was also upgraded regularly. The functionality test laid down by the Special Bench of Delhi Tribunal in Amway India Enterprises Vs. DCIT (supra) is to be applied for determining the nature of expenditure to be capital or revenue. Where the assessee had incurred expenditure on software which has been acquired to facilitate the smooth functioning of day-to-day business operations of the assessee and which do not form part of its profit making apparatus, then the expenditure is allowable as revenue expenditure in th....
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.... not eligible under section 35D of the Act. 21. The assessee is in appeal against the order of CIT(A). 22. The issue raised in the present appeal is squarely covered by the ratio laid down by the Hon'ble Supreme Court in Brooke Bond India Ltd. Vs. CIT (supra) as also Punjab State Industrial Development Corporation Ltd. Vs. CIT (supra). The expenditure having been incurred by the assessee for increasing share capital admittedly, was a capital expenditure and the same could not be considered for computing deduction under section 35D of the Act. The ground of appeal No.2 raised by the assessee is thus, dismissed. 23. The issue vide ground of appeal No.3 raised by the assessee is against the disallowance made out of various heads of expenditure. 24. The Assessing Officer had taken note of different expenditures booked by the assessee in the Profit & Loss Account and considered the nature of said expenses and made certain adhoc disallowances both for personal / non-business element of the expenditure. The various heads of expenditures considered by the Assessing Officer were as under:- (a) Entertainment expense, gift expense and general expense of Rs. 91,793; ....
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....ration. Out of these amounts, lump sum disallowance of Rs. 1,00,000/- was made being for personal in nature. The case of the assessee being a limited company, there is no warrant for any personal expenses and hence, expenditure of Rs. 1,00,000/- is directed to be allowed. 31. Another set of expenses were the Guest house expenses of Rs. 5,38,286/- and telephone expenses of Rs. 26,52,426/-. Out of which adhoc disallowance of Rs. 50,000/- and Rs. 1,00,000/- respectively were made for the reason that it was not possible to verify whether the same were incurred wholly and exclusively for business purposes and there was no personal usage of telephone. Following the earlier line of reasoning that in the case of a company, there is no merit in disallowance on account of personal use and hence, we direct the Assessing Officer to delete the addition of Rs. 50,000/- and Rs. 1,00,000/- made on these accounts. Similarly, Rs. 50,000/- was disallowed out of business promotion expenses which was not warranted in the absence of particular expenditure having been pointed out by the authorities below. No disallowance on account of personal usage can be made in the hands of the assessee. Consequent....
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....06.04.2011 had set-aside the matter to the file of Assessing Officer to decide the applicability of depreciation on leasehold rights under the provisions of the Act. 37. The learned Departmental Representative for the Revenue on the other hand pointed out that the issue of allowability of leasehold premium as revenue expenditure was decided against the assessee by the Special Bench of Mumbai Tribunal in JCIT Vs. Mukund Ltd. (2007) 106 ITD 231 (Mumbai) (SB). Further, it was pointed out that even the amortization of leasehold premium over the life of lease was not to be allowed as expenditure. The learned Departmental Representative for the Revenue further stressed that no depreciation on the leasehold rights holding the same as intangible asset was to be allowed in the hands of the assessee. 38. We have heard the rival contentions and perused the record. The first aspect of the issue raised in the present appeal is the allowability of an expenditure which was not claimed in the return of income but was raised by way of submissions filed during the course of assessment proceedings. Both the Assessing Officer and CIT(A) rejected the claim of the assessee at the outset since no c....
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.... the ratio laid down by the Bangalore Bench of the Tribunal in DCIT Vs. Columbia Asia Hospitals (P) Ltd. (2013) 142 ITD 225 (Bangalore - Trib), which in turn relied on the ratio laid down by the Hon'ble Karnataka High Court in CIT Vs. H.M.T. Ltd. (1993) 203 ITR 820 (Kar). 40. The learned Departmental Representative for the Revenue however, placed reliance on the decision of Special Bench of Mumbai Tribunal in JCIT Vs. Mukund Ltd. (supra). 41. The issue arising before the Special Bench of Mumbai Tribunal in JCIT Vs. Mukund Ltd. (supra), was in relation to the claim of expenditure against the payment made for acquisition of leasehold rights from MIDC. The said payment was termed as premium on leasehold land which was claimed as revenue expenditure by the assessee. The Tribunal noted that the Assessing Officer had not allowed the claim of the assessee though the assessee had placed reliance on the ratio laid down by Hon'ble Karnataka High Court in CIT Vs. H.M.T. Ltd. (supra). The Tribunal after considering the issue at length and also after referring to various judicial propositions propounded by different High Courts, Tribunals and applying the ratio laid down by the Hon'ble Bo....
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....ng the course of assessment proceedings or appellate proceedings. 45. However, we find that the Pune Bench of the Tribunal in M/s. Drilbits International P. Ltd. Vs. DCIT in ITA No.1361/PN/2010, relating to assessment year 2006-07, vide order dated 23.08.2011 had considered the issue of allowability of depreciation on leasehold rights of land and had held that no such depreciation is allowable to the assessee on the premise that a person holding freehold land would not be allowed depreciation on such land and where the person holds leasehold rights in the land if depreciation is allowed, then it would place the person holding freehold land to be at dis-advantage and the same is not justifiable. The Tribunal also held that the leasehold rights in the land were not intangible assets. The relevant observations of the Tribunal vide para 13 are as under:- "13. After considering the above submissions, we do not find substance in the contention of the Ld. A.R. that the leasehold rights in the land are entitled to depreciation. The decision of Hon'ble Supreme Court in the case of Techno Shares (Supra) is not helpful to the assessee as the Hon'ble Supreme Court has been pleased ....
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....hnology Limited Human Resource Policy, which was part of the terms of employment of all employees joining the assessee company. The assessee further submitted that interest subsidy given to all the employees had been disclosed in Form No.16 issued to all the employees, who had availed the benefit. The copies of sample Form No.16 were submitted during the course of assessment proceedings along with extract of Human Resource Policy of the assessee. The next plea of the assessee was that the said expenditure was considered as part of staff welfare expenses for the year ending 31.03.2001 and was claimed as allowable expenditure under section 37(1) of the Act. The Assessing Officer did not accept the contention of the assessee as on the perusal of the Profit & Loss Account, it was noted that the assessee had debited interest of Rs. 65,31,486/- which was interest paid by the assessee @ 13.5%. On the other hand, the assessee was found to be charging interest on the housing loans extended to the employees @ 4% interest. Since the assessee had debited the interest which was paid at higher rate whereas funds which were mixed funds i.e. own funds and also borrowed funds, out of which, the hou....
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....Further, as per Rule 3 of the Rules, the perquisites valuation rules also takes cognizance of the provision of said type of benefit by the employers to the employees and accordingly, provides for the valuation of perquisites in respect of housing loans. The plea of the assessee before us was that in view thereof, the relevant expenditure is allowable under section 37(1) of the Act. 54. We have heard the rival contentions and perused the record. The assessee during the year under consideration had made provision for interest on housing loans to the employees totaling Rs. 25,90,959/-. The said expenditure was incurred on account of reimbursement of interest cost on housing loans obtained by the employees. Where the said benefit forms part of employee compensation package and is provided as per the Human Resource Policy adopted by the assessee company vis-à-vis of its employees, then such expenditure incurred by the assessee is wholly and exclusively incurred for the purpose of carrying on the business. The expenditure of providing benefit to the employees had been considered by the assessee as part of the salary cost of the respective employee and the perquisites value of s....
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....or the purpose of tax could be over ruled. Reliance was placed on series of decisions including the ratio laid down by the Hon'ble Supreme Court in Madras Industrial Investment Corporation Ltd. Vs. CIT 225 ITR 802 (SC) and the Hon'ble Bombay High Court in CIT Vs. Taparia Tools Ltd. 260 ITR 102 (Bombay). The Assessing Officer out of the total claim of Rs. 46,89,760/- excluded the salary cost of Rs. 2,89,395/- and the SAP license cost of Rs. 44,00,365/- was spread over three years and 1/3rd of the cost was allowed during the year. The balance of Rs. 29,33,577/- was disallowed. 57. The CIT(A) allowed the claim of the assessee observing as under:- "21. I have considered the submissions and the material available on record. It is noticed that the expenditure is incurred in obtaining the SAP licence cost for the appellant's own use. In the explanation, it was explained that since the appellant was also engaged in SAP implementation for other customers, a total of 3000 licences were obtained during the year costing Rs. 26.8 crores, out of which 40 licences were used by the appellant for its inhouse SAP implementation for increasing its productivity and business systems etc....
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....ing to Rs. 44,00,365/- was debited to the Profit & Loss Account. The assessee has placed the copy of invoices for purchase of SAP license at pages 247 to 250 of the Paper Book. The explanation with regard to the said acquisition of SAP licenses was that it decided to implement the first phase of SAP Module in financial year 2000-01. The assessee further explained that SAP was an Enterprise Resource Planning Package (ERP Package), was a information system management tool, used for the purpose of integration of business information data management, etc. The assessee had implemented certain SAP Modules i.e. in the field of Finance, Costing, Sales & Distribution, Material management and Fixed assets during the year under consideration and the purpose of SAP implementation was to reap the benefits of system integration and improved time cycles, accuracy and efficiency. The assessee in the books of account, had deferred the expenditure over a period of 36 months and sum of Rs. 1,30,271/- was charged to the Profit & Loss Account for the year ending 31.03.2001. However, in the computation of income filed along with return of income, the assessee added back the said sum of Rs. 1,30,271/- an....
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....Vs. Raychem RPG Ltd. (supra), wherein the assessee had acquired an Enterprises Resource Planning i.e. ERP package. The Tribunal while deciding the appeal of the assessee had held that the said package facilitates the assessee's trading operations or enables the management to conduct its business more efficiently or profitably, but was not in the nature of profit making apparatus. The order of the Tribunal has been upheld by the Hon'ble Bombay High Court and software expenditure was allowed as revenue expenditure. 63. In the facts of the present case before us also the assessee had made investment in the ERP package and following the ratio laid down by the Hon'ble Bombay High Court, we hold that the assessee is entitled to the claim of deduction under section 37(1) of the Act. The Assessing Officer while deciding the issue had allowed 1/3rd on cost as being relatable to the year and the balance sum of Rs. 29,33,577/- was disallowed. The assessee had only booked Rs. 1,30,271/- in Profit & Loss Account as allowable expenditure but in the computation of income had claimed the entire expenditure of Rs. 46,89,760/- to be allowed under section 37(1) of the Act. In contrast to which the....
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....charging notional interest on the said advances made, which became available to the subsidiary company only from the next financial year. Upholding the order of CIT(A), we dismiss the ground of appeal No.3 raised by the Revenue. 67. The assessee in ITA No.1346/PN/2011 has raised the following grounds of appeal:- Ground No 1 - Disallowance of deduction claimed under Section 35D of the Act in relation to expenditure incurred for increase in authorised share capital The learned CIT(A) has erred in upholding the disallowance of Rs. 3,08,000/- made by the AO in relation to the expenditure incurred for increase in authorized share capital of the company. Ground No 2 - Disallowance of deduction of amortized lease premium expenditure The learned CIT(A) has erred in upholding the disallowance made by the AO in respect of deduction claimed for amortized lease premium of Rs. 4,15,053/-. Ground No 3 - Disallowance of provision for expenditure in respect of provision for benefit under Bhavishya Kalyan Yojanano ('BKY'), an employee welfare scheme The learned CIT(A) has erred in upholding the disallowance of provision for expenditure under BKY scheme of Rs. 54,16,204/-. ....
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....as an employee welfare scheme. As per the scheme, in the event of death of an employee during the tenure of his / her service, the employee's nominee would be paid 50% of the last drawn consolidated pay every month for the balance period of the service with the company up to reaching the age of superannuation. The assessee further explained that as on 31.03.2003, the provision required for such a benefit scheme was worked out at Rs. 1.24 crores, out of which, an incremental provision of Rs. 54.16 lakhs was debited for the year under consideration. The claim of the assessee was that the said liability was worked out on scientific and reasonable basis and the provision was made as per the Accounting Standards issued by the ICAI. The Assessing Officer observed that the provision made by the assessee was contingent in nature as the said payments were to be made in the event of death, and there was no certainty of the said event. The Assessing Officer observed that it is an established position of law that when the occurring of an event is not certain, then the same cannot be treated as a liability that has accrued to the assessee. In the instant case it was seen that no expenditure was....
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....made in accordance with the AS-15 on the basis of actuarial valuation was considered and allowed by the Chandigarh Bench of the Tribunal in M/s. Glaxo Smithkline Consumer Healthcare Ltd. Vs. ACIT in ITA No.1148/Chd/2011 relating to assessment year 2007-08, vide order dated 02.04.2013 and also in Bokaro Power Supply Co. (P) Ltd. Vs. DCIT in ITA No.4921/Del/2010, relating to assessment year 2007-08, vide order dated 24.01.2013. It was the contention of learned Authorized Representative for the assessee that the law of precedence can to be reviewed because of change in circumstances as held by Hon'ble Bombay High Court in CIT Vs. Thane Electricity Supply Ltd. (1994) 206 ITR 727 (Bom). 75. The learned Departmental Representative for the Revenue placed reliance on the order of Assessing Officer with special reference to the observations on page 8 of appellate order. 76. We have heard the rival contentions and perused the record. The issue arising before us was in respect of the provision made for benefit under BKY Scheme which as per the assessee was an employee welfare scheme. Another claim made by the assessee was on account of provision for expenditure in respect of Mediclaim I....
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.... as only such persons who separate from the services of the company as a permanent employee on or after 01.04.1989, at an age below their normal superannuating age of 60 years or by reason of death or permanent and total disablement either as a result of injury on works or otherwise. Further, the beneficiary was also defined under the said scheme and once the beneficiary satisfies the conditions contained in the Rules, then he or she actually becomes eligible to receive the benefits under the scheme. The relevant findings of the Tribunal vide para 33 are as under:- "33. On reading the aforesaid Clauses, it is more than clear that this Scheme is applicable only in relation to an "Ex-Employee" as defined under these Rules, who does not already have a ward employed in any unit of the Company and, who has not taken voluntary retirement. Ex-Employee, for the purpose of this Scheme, is defined as only such persons, who separate from the services of the Company as a permanent employee on or after 1st April, 1989, at an age below their normal superannuating age of sixty years as per Company's records, by reason of death or Permanent and Total Disablement either as a result of ....
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....nsidering the various aspects of the scheme, the Tribunal considered whether liability to make the Kalyan payment accrues and arises on the assessee during each accounting period and it was held that it does not so arise. The relevant observations of the Tribunal vide paras 34 to 36 are as under:- "34. In the light of the above provisions, we have to see whether the liability to make Kalyan Payment accrues and arises on the assessee during each accounting period in respect of its all permanent employees. Our answer to this has to be in the negative, inasmuch as the assessee's liability to pay Kalyan Payment arises only when its any permanent employee, who does not already have a Ward employed in any unit of the company, and who has not taken any voluntary retirement, is separated from the services of the company on or after the 1st April, 1989, at an age below their normal superannuating age of 60 years, by reason of death or permanent and total disablement, either as a result of injury on works or otherwise. In other words, the assessee's liability to make Kalyan Payment arises on the happening of certain contingencies, i.e. a permanent employee of the assessee co....
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....ble employee would have attained the superannuating age of 60 years, subject to the provisions of Clause (5) of the Scheme. If only these contingencies, as discussed above, are satisfied in a given year, a definite liability can be said to have accrued and arisen to the assessee under the said Scheme, notwithstanding the fact whether the Kalyan Payment is started to be paid from the month of the separation of the Ex-Employee or not. The assessee would only be entitled to make the provision of liability under the said Scheme from year to year only in respect of such employees, who does not already have a Ward employed in any unit of the company, and who has not taken any voluntary retirement, are separated from the services of the company on or after the 1st April, 1989, at an age below their normal superannuating age of 60 years, by reason of death or permanent and total disablement, either as a result of injury on works or otherwise, for the period commencing from the month of such separation of eligible employee and which is relatable to the period falling in the relevant accounting year. 35. The terms and conditions of this Scheme makes it clear that right of an eligible employe....
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....t can be sought by the employee either during the years of service or at the end of the service with regard to the leave already earned by him during the course of service rendered by him from year to year. Therefore, it is clear that, in this case of Bharat Earth Movers, the leave was already earned by the assessee during the year, in which the provision was made for the leave credited to the assessee's account. The liability to pay leave encashment was thus certain, inasmuch as the employee has earned the leave during that year in which the provision was made. The provision made for meeting the liability incurred by the employer under the leave encashment scheme proportionate with the entitlement earned by the employee subject to the ceiling on accumulation on the relevant date was thus held to be not on account of any contingent liability. In this case, the Hon'ble Supreme Court found substance in the submission of the ld Senior Counsel for the assessee, which is as under:- "Shri S.li. Daslur, the learned senior advocate for the appellantcompany, has submitted that he liability is a certainty. A provision is made for meeting the liability to the extent of entitl....
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....loyee, notwithstanding the fact that the Gratuity was payable on the termination of the employee's service either due to retirement, death, or termination of service. The basis of determining the Gratuity was the year of services put in by the concerned employee. Here the services has already been rendered by the employee and in respect of his every additional year of services, the liability to Gratuity definitely accrued and arose to the company, notwithstanding the fact that the payment is deferred. So, this case is also not applicable to the facts and circumstances of the present case." 82. The Tribunal also made reference to the ratio laid down by the Hon'ble Supreme Court in Metal Box Co. of India Ltd. Vs. Their Workmen (1969) 73 ITR 53 (SC) and also the ratio laid down by the Hon'ble Supreme Court in Calcutta Co. Ltd. Vs. CIT (1959) 37 ITR 1 (SC), vide paras 39 and 40 and observed as under:- "40. In the case of Calcutta Co Ltd. (supra), .... However, in the present case, the assessee's undertaking to give benefits under the Scheme can import a liability on the assessee only when any permanent employee of the assessee company is separated from the service o....
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....ng age of 60 years, by reason of death or permanent and total disablement, either as a result of injury on works or otherwise, insofar as the liability is relatable to the months for which the Ex- Employee is entitled to receive the benefit in any given year, and then to allow the same, if any, as deduction while computing the profits and gains from the assessee's business. While ascertaining the quantum, the AO shall take into account the amount of benefit payable to each employee as well as the other conditions whereby the payment is otherwise ceased, in the relevant year." 85. The Tribunal further deliberated upon the provision made under the Mediclaim Insurance Scheme vide paras 46 to 51 and it was held that the provision is not allowable in the hands of the assessee. However, certain directions were given in respect of the liability of the assessee to reimburse the medical expenses of the persons retired and it was observed as under:- "51. It is definite that the assessee has to reimburse the medical expenses of its employees after their retirement upto the period of 10 years, and, therefore, making the provision thereof in each year in respect of employe....
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....re purely of contingent in nature being dependant on happening of certain events. As already discussed above, the benefit to be paid by the assessee under these two schemes viz. "Bhavishya Kalyan Yojana" and Medi-claim Scheme" are not determinable by reference to the employee's earnings and/or years of service the employee has put in, in any relevant accounting year. These two benefit schemes promoted by the assessee are not akin to the scheme of pension, gratuity, leave encashment benefit on retirement and other retirement benefits that are determinable with reference to the employee's earnings and / or the years of service the employee has put in, so as to make it necessary for the assessee to make a provision for these benefits in all the years. This issue as to the applicability of AS-15 to both the schemes in question has been rightly decided by the CIT (A) by holding that AS-15 are of no help to the assessee to claim the deduction of a provision made on account of both the schemes, which is found to be purely of contingent in nature dependant on the happening of certain events. We are in full agreement with the observations and conclusion arrived at by the CIT (A) with re....
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....verage Scheme amounting to Rs. 19,53,311/-. However, as held by the Tribunal, the assessee is entitled to claim of expenditure in respect of benefit payable to Ex-employees, who have retired & fulfill the conditions of the Scheme. Reference is made to paras 46 and 51 of the order of the Tribunal (supra). Accordingly, we direct the Assessing Officer to determine the deduction on account of BKY Scheme and Medical Insurance Scheme, in view thereof, the grounds of appeal Nos.3 and 4 raised by the assessee are thus, partly allowed. 88. The last issue raised by the assessee vide ground of appeal No.5 is vis-à-vis exclusion of export turnover of Rs. 3.57 crores pertaining to the Software Technology Unit from the eligible export turnover for the purpose of computing the deduction under section 80HHE of the Act. 89. The brief facts relating to the issue are that the assessee during the year under consideration had claimed deduction under section 10A in respect of its first unit and separate deduction under section 80HHE of the Act was claimed on account of second unit. The claim of the assessee was that in computing export turnover and total turnover for the purpose of computin....
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....ill be clearly expressed. Therefore, following the same logic, no deduction u/s.80HHE was admissible on the same export turnover, which was already utilized to claim 100% deduction u/s.10A for the STP unit belonging to the appellant. It is therefore, held that by including the export turnover of STP unit for the purpose of claiming deduction u/s.80HHE, the appellant has proportionately claimed higher deduction than was otherwise available under the scheme of the Act. The Assessing Officer was therefore, right in disallowing the claim to this extent by excluding the export turnover in the STP unit for the deduction u/s.80HHE in the non-STP unit. This ground of appeal is accordingly dismissed." 91. The assessee is in appeal against the order of CIT(A). 92. The learned Authorized Representative for the assessee at the outset of hearing pointed out that the issue of exclusion of export turnover pertaining to STP for the purpose of claiming deduction under section 80HHE of the Act is squarely covered by the decision of Pune Bench of the Tribunal in Serum Institute of India Ltd. Vs. ACIT in ITA No.948/PN/2005 relating to assessment year 2001-02, vide order dated 18.01.2012. 93. ....
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....e use of expression 'any' before 'goods and merchandise' all the goods and merchandise is covered. However, the restriction apply to such goods and merchandise, which are listed in clause (b) of Section 80HHC (2) i.e. Mineral oil and minerals and ores (other than processed minerals and ores specified in 12th Schedule to Act." 95. The CIT(A) had placed reliance on the ratio laid down by Mumbai Bench of the Tribunal in Tata BP Solar India Ltd. Vs. ACIT reported in 103 ITD 386 (Mum) (Trib) in holding that the Assessing Officer was correct in excluding the export turnover while computing exemption under section 80HHE of the Act. The Pune Bench of the Tribunal in Serum Institute of India Ltd. Vs. ACIT in ITA No.948/PN/2005, relating to assessment year 2001-02, vide order dated 18.01.2012 had considered the ratio laid down by the Mumbai Bench of the Tribunal in Tata BP Solar India Ltd. Vs. ACIT (supra) and reliance was placed on the ratio laid down by the Hon'ble Bombay High Court in Hindustan Unilever Ltd. Vs DCIT (2010) 325 ITR 102 (Bom) and it was held that the assessee was entitled for inclusion of export sales in the export turnover. 96. Further, section 80HHE (5) of the Act p....