2018 (1) TMI 539

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.... issues are involved in all these appeals, these are heard together and decided by this common order. 2. Briefly stated, assessee is a company engaged in the business of Bio-Informatics, Contract Research Services etc. In the years under consideration, assessee has claimed deduction u/s. 10A of the Income Tax Act [Act] and also u/s. 80IB on some of the units, but offered income u/s. 115JB of the Act as well. In the scrutiny assessments completed, the Assessing Officer (AO) invoked the provisions of Section 14A for AY. 2009-10, denied deduction u/s. 80IB(8A) in the AYs. 2009-10, 2010-11 & 2011-12. In addition, AO also restricted the disallowance u/s. 10A by excluding certain communication charges from the Export Turnover alone and made ad....

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....on by the AO. In fact, as seen from the order, AO did not verify whether there is any direct expenditure or not. Assessee states that there is direct expenditure by way of cost of one employee at Rs. 2,30,000/-. Ld.CIT(A) without examining the issue has accepted the contention. Moreover, it is also noticed that the average of investments as stated by the AO seems to be not correct. The average of opening investment at Rs. 44,49,44,803/- and closing balance at Rs. 16,14,79,458/- results in average value of Rs. 30,32,12,130/- as against Rs. 17,17,32,670/- stated by the AO in the order. 0.5% thereon at Rs. 7,08,664/- was not correctly worked out. Therefore, without going into merits of the addition, we accept the Revenue's ground and restore t....

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....ibed authority vide letter No. TU/IV /R&D.com/GVK/81/2005 dated 29-07-2011. 7. Ld.DR, however, submitted that CIT(A) is not correct in granting relief as the ITAT order indicate that the facts are to be examined in each of the years. 8. We have considered the rival contentions and perused the orders placed on record. In the light of the decision of the ITAT in assessee's own case for earlier years, which the Ld.CIT(A) has followed, we do not see any reason to differ from the order of the CIT(A). It is true that ITAT has stated that the claim has to be examined in each of the years and left a note of caution that the view taken therein may not apply to subsequent years, if there are change of facts. However, as seen from the approval g....

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....on two of the units. AO noticing that there may be internet charges attributable to delivery of article/thing outside India, disallowed the claim of communication charges. (Bio-informatics Division, Balanagar, Hyderabad at Rs. 1,18,877/- & an amount of Rs. 11,082/- in Informatics Division, Chennai.) Aggrieved by the disallowance made u/s. 10A, assessee preferred an appeal before the Ld.CIT(A) and relied on various case law including the definition of 'Export Turnover' and 'Total Turnover' based on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Lakshmi Machine Works Ltd., [290 ITR 667] (SC). Ld.CIT(A), however, Ld. CIT(A) did not agree stating that the claim does not hold water. 12. After considering the rival conten....

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....the entire claim on Section 10A on the reason that some of the FIRCs issued by Kotak Mahindra Bank mentioned the purpose as 'research services'. Since assessee has claimed the deduction for software exports, AO was of the opinion that research services provided by assessee are not eligible for deduction u/s. 10A. Ld.CIT(A) confirmed the disallowance, even though assessee explained that they were into software exports and gave detailed explanation and also furnished necessary invoices in support of the claim. 14. Ld. Counsel referred to the submissions made before the CIT(A) and submitted that the reference to research services is because assessee is mainly involved in providing medical research services. Therefore, there may be mistake i....