TaxTMI 
TaxTMI 
2019 (12) TMI 400
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....cts and in the circumstances of the case and in law, the Learned Commissioner of Income-tax (Appeals) [CIT(A)] erred in not considering the factual and legal submissions made by the Appellant Company and further erred in not providing adequate opportunity of being heard to the Appellant Company. 2. That on the facts and circumstances of the case and in law, the Learned Deputy Commissioner of Income Tax, Circle 1(1), Hyderabad ['Ld. AO'] erred in reducing foreign exchange fluctuation gain of INR 4,43,39,427 from export turnover and thereby resulting into erroneous computation of 7 deduction claimed under section 10A of the Income Tax Act, 1961 ('the Act') and the Ld. CIT(Appeals) further erred in upholding the said a....
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....) Bad debts written off 25,60,343 Total Income 31,16,81,256 Less: Deduction u/s.10A 12,32,25,975 Total income assessed 18,84,55,281 3.1. While allowing the deduction, the AO changed the calculations of allowable deduction qua the quantification of export turnover and the total turnover figures. Further, the AO reduced the foreign exchange fluctuations gain from the scope of the 'export turnover', which lead to the changes in the allowable deduction u/s.10A of the Act. AO also did not adjust the total turnover to the extent. Further, the AO did not allow the claim relating to the cross charges expenditure. 4. During the Fir....
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....rovisions". 6.2. From the above, it is evident that the 'principle of parity' demands inclusion of such gains in the definition of export turnover when the same are included in the definition of total turnover. The said principle stands now consolidated by the order of Hon'ble Supreme Court in the said case CIT Vs. HCL Technologies Ltd., (supra). 6.3. Ld.Counsel for the assessee also submitted that the decision of the Hon'ble Madras High Court in the case of CIT Vs. Pentasoft Technologies Ltd., (2013) [33 taxmann.com 570] (Madras) is for treating the said foreign exchange fluctuation gains as part of the export sales for the purpose of deduction u/s.10A of the Act. The relevant para reads as under: "4. In order to all....
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....the assessee to its overseas foreign company (ATI Canada). Relevant facts as narrated in para 2.2.1 of the statement of facts (Appendix-A) includes the following: "2.2.1. The Appellant Company, being a captive service provider, provides software development services to its parent company, ATI Canada under a cost plus mark-up arrangement. Since the Appellant Company did not possess certain requisite skill sets to perform certain portion of its software development services, the parent company ATI Canada entered into a contractor service agreement' with M/s Soctronics Technologies Private Limited (hereinafter referred to as 'Soctronics') [earlier known as GD Microsystems Private Limited], a company incorporated in India, ....
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....It has paid up share capital of Rs. 5,00200/-. d) M/s. Soctronics Private Limited is a VLC Design Services Company As submitted by the appellant, ATI Canada has entered agreement with M/s. Soctronics Private Limited as the appellant company M/s.AMD Research & Development Center India Private Limited was not capable of doing the work. Hence, the credit work for this part of income is attributable to M/s. Soctornics Private Limited, India. Therefore, this income is not direct income of the appellant company. Section 10A is very clear regarding "Income from the eligible Business", this income is not generated by the work of the appellant company. Hence, the Assessing Officer is correct in taking this income as not de....
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....by the Ld.DR for the Revenue, we find that no differential facts were brought to our notice for the AO to deviate from his line of accepting the claim of assessee in the past years. In this regard, we perused para 3 of the decision of the Hon'ble High Court of Bombay in the case of CIT Vs. Gopal Purohit (2010) [188 Taxman 140] (Bombay), which was confirmed by the Hon'ble Apex Court. For the sake of completeness, para 3 of the said order is reproduced here under: "3. Insofar as Question (b ) is concerned, the Tribunal has observed in paragraph 8.1 of its judgment that the assessee has followed a consistent practice in regard to the nature of the activities, the manner of keeping records and the presentation of shares as inve....