TaxTMI 
TaxTMI 
2018 (7) TMI 288
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....come Tax Act, 1961 (the Act) concerning assessment year 2010-11. 2. The substantive grounds of appeal raised by Revenue reads as under: "1). "Whether the Commissioner of Income-Tax (Appeals) erred in law and on facts in allowing depreciation @ 60% on computer software purchased separately (SAP Software) against 25% applicable to intangible assets ignoring the findings of AO". 2). "Whether the Commissioner of Income-Tax (Appeals) erred in law and on facts in allowing the assessee's claim of deduction u/s.10AA of the Act on exchange fluctuation gain, which is not of first degree and not derived from export". 3. Ground no.1 concerns eligibility of depreciation on computer software purchases separately by the assesse....
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....the industry in which the assessee by placed in. The learned AR, thereafter, pointed out that the issue is no longer res integra and is covered in favour of the assessee by the decision of the co-ordinate bench of the Tribunal ACIT vs. Zydus Infrastructure (P.) Ltd. [2016] 72 taxmann.com 199 (Ahmedabad-Trib.). Learned AR submitted that in one of group cases as pointed out, the identical issue came up wherein in similar facts, it was held that assessee is eligible for accelerated depreciation year after-year and therefore, higher depreciation in initial years would ultimately lead to lower depreciation in the subsequent years and accordingly, over a period of time, the entire exercise would be revenue neutral. The learned AR accordingly asse....
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.... from' as provided in Section 10AA(1) of the Act. In essence, it is the case of AO that the fluctuation gains is not derived from export of articles or things etc. per se but is merely attributable to profits and gains from export and consequently not eligible for deduction under s.10AA of the Act. The AO accordingly denied claim of deduction under s.10AA of the Act in respect of business profits by way of foreign exchange fluctuation gains. 9. The CIT(A), in first appeal, revisited the entire issue at length. The CIT(A) took note of the provisions of Section 10AA(7) of the Act which provides for the manner in which the profits derived from exports of articles or things etc. under s. 10AA(1) of the Act is required to be computed. The CIT....
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....ch gain and loss are part and parcel of the sale of export. I am also inclined with appellant that Hon'ble Bombay High Court for same issue and in similar facts (deduction u/s.10A of the Act) following its judgement in the case of CIT vs. Amber Export (India) & Hon'ble Gujarat High Court judgement in the case of CIT vs. Amba Impex (2006) 282 ITR 144 held in favour of assessee for large amount realized in terms of Indian Rupees as a result of a foreign exchange fluctuation that took place in the course of the export transaction. Similarly Hon'ble Mumbai ITAT in the case of Renaissance Jewellery (P)Ltd. (supra) after considering ratio of various case laws held that- "There is no material difference between the requirement....
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....Ahd/2013 vide order dated 07.05.2014 considered the issue of business income of eligible unit and claim of deduction though in reference to different grounds as follows: "Since the foreign exchange fluctuation gain or loss is in Indian Rupees being realized as per exchange rate, provisions of section 10AA (7) of the Act which provide the manner in which the profits derived from "Export of articles or things or securities is to be computed for the purpose of 10AAdeduction reflect that- "The profits of the business of the undertaking are to be computed as per the provisions of Chapter IV D of the Act and the only adjustment which is permitted by the legislature to be made to such profits of the business is to apportion the s....
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.... excess claim of deduction u/s.10AA of the Act of Rs. 2,14,08,877 (35,17,14,408 - 33,03,05,531) but now considering the relief granted for depreciation at para 5.1 above and treating such gain as part of business profit, the appellant's claim u/s.10AA of the Act will be worked out at Rs. 35,17,14,408. The AO is directed to allow such deduction. This ground is therefore treated as allowed." 10. Aggrieved by the reversal of the action of the AO, the Revenue is in appeal before the Tribunal. 11. We have carefully considered the rival submissions on the issue and perused the orders of the authorities below. We have no hesitation in endorsing the view of the CIT(A) in this regard. The issue is substantially covered in favour of the ass....