2019 (1) TMI 1087
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....egard to Section 10A (5) and Section 80A(5) of the Act?" 4. The respondent assessee engaged in the business of providing 'Processing Outsourcing Services', during the assessment year in question had no other business activity apart from business activities covered under Section 10A of the Act. Accordingly, in return of income filed on 29th September, 2009 it had claimed deduction of Rs. 17.87 crores under Section 10A of the Act with NIL taxable income under the head of 'income from business and profession'. In order to claim deduction under Section 10A of the Act the respondent-assessee had filed Form 56F along with its return. In addition, respondent - assessee, had earned income of Rs. 19.66 lakhs on fixed deposit receipts from banks, which it declared as income under the head 'Other Sources'. Accordingly, the net taxable income was Rs. 19.68 lakhs. 5. During the course of the assessment proceedings, the respondent-assessee had filed a revised computation of income making suo motu disallowance of Rs. 2,14,50,610/- and allowance of Rs. 33,25,522/- from business income as declared which it claimed was inadvertently missed out, as per the details given below: " Suo Motu Disallow....
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....es and not disallowance under the head business income. He allowed the appeal filed by the respondent-assessee, by accepting the revised computation of income furnished by it during the course of the assessment proceedings. 10. Revenue preferred an appeal which has been dismissed by the impugned order, as it was held that the respondent assessee was indisputably eligible for deduction under Section 10A and the revised computation was filed when the assessment proceedings were in progress. Further, the respondent assessee had duly explained the reasons for revising the computation, which was otherwise genuine and not disputed. 11. The contention of the revenue is that the revised computation should not have been accepted, for which reliance is placed on the judgment of the Supreme Court in Goetze (India) Ltd. Vs. Commissioner of Income Tax (2006) 284 ITR 323 (SC). It was also submitted that the first Appellate Authority and the Tribunal have failed to take notice of the amendment to Section 80A (5) vide Finance Act, 2009 w.e.f. 1st April, 2003. In support, reference was made to the judgment of this court in Nath Brothers Exim International Ltd. Vs. Union of India & Ors., (2017) 39....
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.... Commissioner of Income Tax Vs. Sam Global Securities Ltd. [2014] 360 ITR 682 (Delhi), wherein judgment in the case of CIT Vs. Jai Parabolic Springs Ltd. [2008] 306 ITR 42 (Delhi) was quoted. In Jai Parabolic Springs Ltd. (supra), decision in Goetze (India) Ltd. (supra) was distinguished in the following words:- "In Goetze (India) Ltd. Vs. CIT [2006] 284 ITR 323 (SC) wherein deduction claimed by way of a letter before the Assessing Officer, was disallowed on the ground that there was no provision under the A ITA 261/2002 Page 4 of 6 the return without filing a revised return. Appeal to the Supreme Court, as the decision was upheld by the Tribunal and the High Court, was dismissed making clear that the decision was limited to the power of the assessing authority to entertain claim for deduction otherwise than by a revised return, and did not impinge on the power of the Tribunal." 8. In Sam Global (supra) reference was also made to the decision of the Supreme Court in National Thermal Power Co. Ltd. Vs. CIT [1998] 229 ITR 383 (SC). Reliance was placed on an earlier decision of the Supreme Court in Jute Corporation of India Ltd. Vs. CIT, [1991] 187 ITR 688 (SC), in which it has been....
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....reme Court in Goetze (India) Ltd. (supra). The common thread running through the ratio in all the decisions of the High Courts is that while an AO may not be entitled to grant a deduction or an exemption on the basis of a revised computation of income, there was no such fetter on the appellate authorities. This was recently reiterated by this Court in a decision dated 25th August 2015 in ITA No. 644/2015 (Pr. Commissioner of Income Tax-09 v. Western India Shipyard Limited). In Sam Global Securities Ltd. (supra), this Court pointed out that the power of the Tribunal in dealing with appeals was expressed in the widest possible terms and the purpose of assessment proceedings was to assess the correct tax liability. The Court noted that "Courts have taken a pragmatic view and not a technical view as what is required to be determined is the taxable income of the Assessee in accordance with law." In Influence v. Commissioner of Income Tax (supra) a similar approach was adopted when the AO in that case refused to accept the revised computation submitted beyond the time limit for filing the revised return under Section 139(5) of the Act. This Court noted that the decision in Goetze (India)....
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....i) the aggregate of the deductions under the various provisions referred to in (i) above, shall not exceed the profits and gains of the undertaking or unit or enterprise or eligible business, as the case may be; (iii) no deductions under the various provisions referred to in (i) above, shall be allowed if the deduction has not been claimed in the return of income; 20. In the facts of the present case, we do not think Sub-section 5 to Section 80A would be attracted and should be applied. Revised computation made by the assessee, in fact, as noticed above had resulted in disallowance of more than Rs. 2.14 crores, which could have been made by the Assessing Officer while computing the claim for deduction under Section 10A of the Act. Nevertheless, the enhanced income would not have been taxable. The assessing officer had also accepted that Rs. 6,13,047/- i.e. the provision for leave encashment claimed on payment basis should be allowed. He however, did not allow the other suo motu allowances made by the respondent-assessee. Disallowances and allowances in the revised computation were made in relation to bonus with reference to provision of Section 43B of the Act. Further, allowance....