2019 (9) TMI 143

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....acts and in the circumstances of the case and in law, the Ld. CIT(A) erred in relying on the decision in the case of Gem Plus Jewellery India Ltd. (330 ITR 175), ignoring that the income Tax Department has not accepted the principles laid down by the said decision and SLP (Civil) 11030/2011 has been filed against the said decision?" (ii) "On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in holding that expenses disallowed u/s. 40(a)(ia) amounting to Rs. 7,77,98,460/- shall be reduced from the Export Turnover and the Total Turnover while working out the amount eligible for deduction u/s 10A of the Act, ignoring that the disallowances made on the ground of non compliance of the mandatory provisions of the Act cann....

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....ictional High Court in CIT vs. Gem Plus Jewellery Pvt. Ltd. [2010] 194 Taxman 192. Thus, aggrieved by the order of ld. CIT(A), the revenue has filed the present appeal before us. 3. At the outset of hearing, the ld. AR of the assessee submits that the ground of appeal raised by revenue is squarely covered by the decision of Tribunal in assessee's own case for Assessment Year 2010-11 in ITA No. 1900/Mum/2015 dated 28.02.2017, wherein on identical grounds of appeal, the appeal of revenue was dismissed. The ld. AR of the assessee furnished the copy of order of Tribunal for Assessment Year 2020-11 dated 28.02.2017. 4. On the other hand, the ld. Departmental Representative (DR) for the revenue after going through the contents of order of Tribu....

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....the Tribunal was justified in directing the A.O to exempt u/s 10A of the Act, on the assessed income which was enhanced due to allowance of the employers as well as the employees contribution towards Provident Fund/ESIC. The Hon'ble High Court decided the issue in favour of the assessee holding as under:- "11. For the purposes of the appeal it is necessary to refer to the admitted position which is that the assessee had deposited both the employer's and the employees contribution towards provident fund and ESIC, though beyond the due date including the grace period. The Assessing Officer added these payments to the total income of the assessee and made an addition in the amount of Rs. 71.59 lakhs, However, for the deduction under ....

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....see have been derived from manufacturing activity. The salaries paid by the assessee, It has not been disputed, relate to the manufacturing activity. The disallowance of the provident fund/ ESIC payments has been made because of the statutory provisions-section 43B in the case of the employer's contribution and section 36(v) read with section 2(24) (x) in the case of the employees' contribution which has been deemed to be the income of the assessee. The plain consequence of the disallowance and the add back that has been made by the Assessing Officer is an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under section 10A the addition made on account of the disallowance ....