2016 (1) TMI 251

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng additions and assessed income at Rs. 22,52,35,607/-. 3. The first ground raised by the assessee in appeal on denial of exemption claimed u/s.10B of the Act in respect of export proceeds received after stipulated period and also foreign exchange gains from the calculation of exemption u/s.10B of the Act. 3.1 The assessee company is manufacturer of electronic components and filed audit report under section 44AB and also claimed exemption u/s.10B in respect of EHTP Division (Electronic Hardware Technology Park Division) engaged in manufacture of UPS and power condition system. Out of the total turnover of Rs. 3,91,72,095/-, net profit on export turnover has worked out to Rs. 15,09,803/- after considering the overheads. The assessee has filed all statutory forms for claiming deduction u/s.10B and also copies of foreign inward remittances undertaken by the EOU division. Against the total turnover of Rs. 3,91,72,095/-, the foreign exchange received within stipulated time of six months from the end of financial year into country is Rs. 3,42,66,477/- and the balance sum of Rs. 48,23,426/- was received from subsidiary company after the due date. The ld. Assessing Officer has restricted....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....out of India are received in, or brought into, India by the assessee inconvertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf." At the outset, RBI is the competent authority to give special permission in writing to the assessee to receive sale proceeds after the said date. In the present case Rs. 48,23,426/- was received in October, 2008 and February 2009, after a period of six months from the end of the previous year and the circular of the RBI is effective from 2011 onwards in respect of inward remittances and not retrospectively. Considering the above facts, we are inclined to uphold the order of the Commissioner of Income Tax (Appeals). The ld. AO also excluded from the export turnover foreign exchange gain of Rs. 2,98,953/- for the computation of deduction u/s.10B as assessee could not explain the source for foreign exchange gains attributed to units and the ld.CIT(A) has confirmed the addition. Before us, the Authorised Representative has not submitted any particulars but pleaded for consideration of foreign exchange gains for deduction u/s.10B and it is ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... 4.3 We heard both the parties and perused the material on record. We find that facts and circumstances of the present case pertaining to holding and subsidiary company of two different countries, and which needs to be verified with the quantum of share holding and DTA agreement for dividend income. We are of the considered opinion that matter needs to be re-examined and set aside the issue in dispute to the file of the Assessing Officer. The Assessing Officer is directed to allow the claim after considering the satisfactory explanations and material evidence for dividend income. 5. The third ground raised by the assessee with regard to disallowance u/s.40(a) (ia) to the tune of Rs. 11,68,912/- 5.1. The assessee company is in the business of manufacturing and export of the UPS and electronic parts used for global networking and has entered into contracts with various communication channels which provides internet services including M/s.SAP India Pvt. Ltd for providing software services. The assessee company based on the nature of transaction and working conditions deducted TDS under provisions u/s.194C of the Act @2% on such contract payments. In the assessment proceedings, the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... depositing the same with the Government, which is not disputed by the Assessing Officer. We are of the opinion, that if any difference in strategy of taxability or nature of payment arises, in such circumstances alternatively, the Assessing Officer can treat the assessee as defaulter u/s.201 of the Act but not by invoking provisions u/s.40(a)(ia) of the Act. It is also apparent from facts of the case the assessee has deducted TDS and remitted to the treasury and we direct the Assessing Officer to delete the impugned addition and allow the grounds of the assessee. 6 The last ground raised by the assessee with regard to disallowance of interior decoration works Rs. 16,05,120/-. 6.1 The assessee in the financial year 2007-08 has incurred an expenditure of Rs. 17,83,467/- on the interior works in the nature of Aluminum glass partitions, toilet refurbishing, granite tiles and strips doors etc., The assessee company has treated such expenses as Revenue expenditure. In the assessment proceedings, it was explained that temporary partitions, fixation of glass, granite tiles etc on rented premises are considered as current repairs and 100% deduction claimed but the Assessing Officer allow....