TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 1547
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.... Rs. 4,87,707/-. Pursuant thereof, vide notice dated 29/05/2012 u/s. 148 of the Act, reassessment proceedings were initiated against the assessee. The assessee challenged the said notice by filing objections before the Assessing Officer. However, the same were disposed of and the proceedings were continued. The said proceedings were completed by an order dated 31/03/2013 and the Assessing Officer made the following additions to the income already assessed vide order dated 10/11/2009:- 1. Unbilled Revenue : Rs. 7,93,47,506 2. Penalty for non compliance of Certain foreign tax laws : Rs. 29,59,969 3. Disallowance out of bonus Payment : Rs. 1,17,47,167 4. Income from other sources : Rs. 4,63,590 5. Deduction under section 10B of the I.T. Act : Rs. 26,94,61,666 3. Aggrieved by the order dated 31/03/2013, the assessee carried the matter in appeal before the Ld. CIT(A). The Ld. CIT(A) vide impugned order dated 02/01/2015 partly allowed the appeal of the assessee. The addition pertaining to unbilled revenue of Rs. 7,93,47,506/- was confirmed. The additions with respect to foreign tax related penalty, disallowance out of bonus payment and income from other sources....
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....the hearing of the appeal. 4.1 The assessee has also raised additional grounds of appeal: "4. Erroneous disallowance of the entire deduction claimed u/s. 10B of the Act On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) ('CIT(A)') has erred in upholding the order of the Assistant Commissioner of Income Tax ('ACIT') in disallowing Rs. 26,94,61,666/- claimed by the Appellant as deduction u/s. 10B of the Act. On the facts and in the circumstances of the case and in law, the learned CIT(A) has wrongly adopted a position that, approval from Inter Ministerial Standing Committee ('IMSC') constituted u/s. 14 of Industries (Development and Regulation) Act, 1951 ('IRDA') is not valid for the purpose of section 10B of the Act disregarding the fact that IMSC is constituted u/s. 14 of the IRDA, as stipulated for the purpose of section 10B of the Act. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the order of the ACIT, by disregarding the fact that once STPI approves the unit as a 100% export oriented undertaking, the Appellant should be allowed the bonafide claims....
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....nue earned during the year under consideration. The source of the said revenue, too, is unexplained in as much as there are no bills, vouchers from the persons to whom the services pertaining to the unbilled revenue were rendered by the assessee company. The assessee has failed to substantiate as to why the said amount was not included in the receivable account or in the sundry debtors account. In view thereof, the Ground No. 1 raised by the assessee is dismissed. 9. Ground No. 4 pertains to the deduction claimed by the assessee u/s. 10B of the Act. The assessee has claimed a deduction of Rs. 26,94,61,666/- in the original return of income. The assessee has obtained approval as a 100% export oriented unit from the director, Software Technology Parks of India (STPI) and had been claiming deduction u/s. 10B of the Act from the year 2001. The Assessing Officer relied upon the judgment passed by the Hon'ble Delhi High Court in the case of CIT vs. Regency Creations Ltd., 255 CTR 63 and proceeded to disallow the entire claim of deduction made by the assessee by holding that for claiming such deduction, the approval ought to have been taken from the Central government through the approp....
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.... by EOU/EPZ. Sale of imported materials, Disposal of scrap, Private bonded warehouses, period of bonding, and de-bonding. The notification therefore extended incentives to EOUs to set up units under the STP scheme. However, for the Court to conclude that the Interministerial Committee was authorized to issue approval u/s. 10-B and that its imprimatur or approval u/s. 10-A, ought to be deemed as an approval u/s. 10-B, there ought to be more direct, or express authorization. 15. Section 10A extends the exemption to the units set up under STP scheme which start production of goods during the previous year relevant to the assessment year commencing on or after 1st April, 1994. The assessee's plea about eligibility of a 100% EOU STP eligible for exemption would render the amendment brought about by the Finance Act, 1993 (extending the benefit u/s. 10A of the Act to the STPs from 1st April, 1994) superfluous. There is no reason for parliament to amend the law, and extend benefits of Section 10A to units under STP scheme and, restrict the benefits to those commencing their operations in the year of account relevant to the assessment year 1994-95, if a STP unit is otherwise eligible for....
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.... mistake, if any, committed by the department in previous years would not preclude the department to determine the true income in the relevant AY. Accordingly, Ground No. 4 raised by the assessee is dismissed. 13. Ground Nos. 2 & 3 are general grounds and are disposed of in view of our findings above. The appeal of the assessee in I.T.A. No. 153/Coch/2015 is dismissed. I.T.A. No. 154/Coch/2015 14. The facts in the present appeal are similar to those in I.T.A. No. 153/Coch/2015 and the same are not repeated. 15. The Department is in appeal before us and has raised the following grounds of appeal. 1. The order of the learned Commissioner of Income Tax, Trivandrum is so far as on the points mentioned below are concerned is opposed to law on the facts and circumstances of the case. 2. The learned Commissioner of Income tax(Appeals) ought to have noted that section 10A(5) of the Income Tax Act stipulates that the deduction u/s. 10A shall not be admissible unless the assessee furnishes Form No. 56F along with the return of income and the report of an accountant as specified. No such claim was made by the assessee in the return of income filed and this was not raised as an a....
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....sible as at the time of furnishing the original return, the assessee did not furnish Form No. 56F alongwith the report of an accountant as provided in the provision and therefore making of an alternate claim u/s. 10A of the Act before the Ld. CIT(A) by not filing the valid revised income is not permissible. The Ld. AR on the other hand argues that the alternate claim u/s. 10A is maintainable as the assessee had filed the revised return of income alongwith Form 56F in the appellate proceedings and the requirements therein are fulfilled by the assessee. 18. We have heard the rival contentions and perused the facts of the case. The Department has relied upon the judgment of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. (284 ITR 323). The facts of the aforesaid case are different with the present case in as much as the assessee therein had made an alternate claim by filing a letter before the Assessing Officer without filing a revised return. In the present case, the assessee has filed a revised return of income alongwith Form 56F before the Ld. CIT(A). In an identical case before us in ACIT vs. M/s. Q Burst Technologies P Ltd. in I.T.A. No. 172 & 173/Coch/2015, ....
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....previous assessment years. Only when the judgment of the Hon'ble Delhi High Court in the case of Regency Creations Ltd., cited supra, was pronounced, the claim of deduction u/s. 10B was denied in the assessment concluded. When the claim of deduction u/s. 10B was denied, the Assessing Officer ought to have examined whether the assessee is eligible for deduction u/s. 10A of the Act. The CBDT Circular No. 14 (XL-35) dated 11.4.1955 has clarified that the revenue shall not take advantage of ignorance of the assessee as to his rights and the officers are duty bound to grant deduction legally available to the assessee. The CIT(A) also relied the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Technovate E Solution P. Ltd. reported in 354 ITR110 wherein it was held that registration with Software Technology Parks of India is sufficient to allow deduction u/s. 10A of the Act. The copies of the certificate of registration issued by STPI and the certificate of the Chartered Accountant in Form 56F are also enclosed in the paper book filed by the assessee for the respective assessment years. On examination of the certificates of registration under STPI and the certificate of th....