TaxTMI 
TaxTMI 
2017 (12) TMI 862
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....order of the CIT (A)-2, Hyderabad, dated 26.2.2016 directing the AO to allow expenditure claimed by the assessee u/s 10B of the Act, even though the assessee has not been approved as a 100% EOU by the Board appointed in this behalf by the central Govt. 3. Brief facts of the case are that the assessee is engaged in the business of rendering software development services to its Associate Enterprises (AE) located in various places outside India. For the A.Y 2004-05, the assessee filed its return of income on 1.11.2014 declaring an income of Rs. 1,66,03,779. An order u/s 143(3) was passed on 29.12.2006 determining the taxable income of the firm at Rs. 2,55,79,796 after disallowing the excess of the exemption claimed u/s 10B of the Act aggreg....
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....e Act. Relevant paragraphs are reproduced hereunder for ready reference: "6. We heard the parties and perused the impugned orders of the lower authorities. The only question that clinches the issue involved in this appeal is whether for becoming eligible to the deduction under S.10B of the Act, whether it is enough if the assessee is registered with Software Technology Park of India as a 100% EOU or it is also necessary for the assessee to have the approval of the Board constituted by the Central Government under S.14 of the Industries (Development and Regulation) Act, 1951. The CIT(A) has decided this issue in favour of the assessee, and held the assessee as eligible for deduction under S.10B of the Act, following the decisions of....
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....peal is dismissed. ITA Nos.815 to 817/Hyd/2016 & ITA No.916/Hyd/2017 A.Ys 2007-08 to 2009-10 5. ITA No.815/Hyd/2016 is for the A.Y 2007-08, 816/Hyd/2016 is for the A.Y 2008-09 and ITA Nos.817/Hyd/2016 and ITA No.916/Hyd/2017 are for A.Y 2009- 10. All these are the appeals filed by the Revenue for the respective A.Ys. ITA No.817/Hyd/2016 is an appeal for the A.Y 2009-10 for the assessment order passed u/s 143(3) of the Act, while for the same A.Y 2009-10, ITA No.916/Hyd/2017 is for the re-assessment order passed u/s 143(3) r.w.s. 147 of the Act. In all these appeals, the common ground raised by the Revenue is against the direction of the CIT (A) to reduce the communication charges and Band Width VOIP charges both from export turnover a....
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....vables. 8. As regards the first issue, the learned Counsel for the assessee submitted that the AO has not followed the direction of the DRP to take the "profit before depreciation" of both the assessee as well as comparable companies for determining the ALP, as the assessee is a partnership firm, while the comparables taken by the TPO are companies and the rate of depreciation is high in the case of the firm. He has drawn our attention to the directions of the DRP at para 2.4 at page 5 of its order wherein the DRP has directed the AO to consider the margin in the case of the assessee as well as the margins of the comparable companies after excluding the depreciation. He submitted that the AO has not followed the said direction while pass....
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....ses and beyond 12 months in one case, the interest charged by the Department at 14.75% on the total of the receivables is not sustainable. Even otherwise, he submitted that since the payments are from AEs outside India, the interest rates prevalent in India should not have been charged. 12. The learned DR, however, supported the orders of the authorities below. 13. Having regard to the rival contentions and the material on record, we find that in most cases of the AE's, the amounts were received within a period of six months except in one case where it was received after 12 months. We find that the Coordinate Bench of this Tribunal in the case of GSS Infotech Ltd in ITA No.497/Hyd/2015 has considered similar issue and at Para 10 to 12....
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.... credit period itself is arbitrary. Moreover, as seen from the calculation provided in page 7 of the assessment order, the date of realization was shown as 02- 02-2011 and interest was levied from 01-04-2010 to 02-02-2011 which is not pertaining to the year under consideration. As far as this year is concerned, the invoices raised on 31-12- 2009 were outstanding only for a period of three months by the end of the accounting year. We are of the opinion that this period is reasonable and so no interest can be levied, just because amounts are shown as 'outstanding'. Accordingly, we cancel the interest levied and allow assessee's contentions. Grounds are considered allowed". 12. In the result, appeal is considered allowed f....