TaxTMI 
TaxTMI 
2019 (12) TMI 986
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.... prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored. 4. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal. 3. The learned DR of the Revenue supported the assessment order whereas the learned AR for the assessee supported the order of the CIT(A). He also submitted that this issue is squarely covered in favour of the assessee by the Tribunal order in assessee's own case for Assessment Year 2004-05 in ITA No. 1736/Bang/2013 dated 11.10.2013. It was submitted that copy of this tribunal order is available on pages 801 to 820 of the Paper Book and the relevant page is page 809 of the Paper Book. 4. We have considered the rival submissions. In this regard, we find that it is noted by the AO on page Nos.2 and 3 of the assessment order that the assessee's explanation revolves around the argument that the software expenses were incurred to acquire right to access to use software for a limited duration and the payment represent the payment for the use of copyright. In the light of these facts of t....
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....f deduction under section 10A and the learned CIT(A) has erred in confirming the action of the learned AO. Amount wrongly reduced from export turnover under the caption 'sale proceeds received in kind' 3. The learned assessing officer has erred in reducing a sum of Rs. 1,57,14,000/- from the figure of export turnover for the reason that the above amount represents sale proceeds received in kind and the Id. CIT(A) has erred in confirming the action of the Id. AO. The above sum and the transaction happened during FY 2003-04 relevant to AY 2004-05 and has no relevance for the year under consideration. On facts and in the circumstances of the case and law applicable, the above amount should not be reduced from export turnover in computing deduction under section 10A. Export sale proceeds realised late reduced from export turnover 4. The learned assessing officer has erred in excluding export sale proceeds realized after 6 months from the end of relevant previous year amounting to Rs. 1,35,83,760/- from the figure of export turnover in computing deduction under section 10A and the learned CIT(A) has erred in confirming the action of the learne....
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....bmitted by learned AR of the assessee that ground No.1 is general and regarding ground No.2, reliance was placed on the judgment of the Hon'ble Karnataka High Court rendered in the case of CIT Vs. Hewlett Packard Global Ltd., as reported in 403 ITR 453, copy available on pages 570 to 584 of the Paper Book. Our attention was drawn to para Nos.31 and 37 of this judgment and it was pointed out that it was held by Hon'ble Karnataka High Court in this case that the assessee is entitled to 100% exemption/deduction under section 10A of the IT Act in respect of interest income earned by it on the deposits made by it with the banks in the ordinary course of business and also interest earned by it from the staff loans and such interest income would not be taxable as income from other sources under section 56 of the IT Act. 8. It was pointed out that it is also held by the Hon'ble Karnataka High Court in para 37 of the judgment that the incidental activity of parking of surplus funds with the banks or advancing of staff loans by such special category of assessee covered under sections 10A or 10B of the IT Act is integral part of their export business activity. When our attention was drawn ....
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....tivity arid has also allocated certain expenses not allocated to 10-A units as under liquidated damages recovered from suppliers, write back of credit balances in customer account scrap sales of newspapers, battery and expenses like corporate headquarters while computing deduction. The assessment came to be completed by the order dated 28-3-2001. Aggrieved by the said order the assessee preferred an appeal to the Commissioner of Income-Tax (Appeals). The Commissioner granted relief on some counts and rejected on other grounds. Aggrieved by the same, the Revenue as well as the assessee preferred independent appeals before the Tribunal. The appeal preferred by the Revenue was dismissed and the appeal preferred by the assessee was allowed. Aggrieved by the said order, the Revenue has preferred two appeals against the order dismissing their appeal as well as the order partly allowing the assessee's appeal. 3. The 1st substantial question of law which arises for consideration reads as under:- " 1) Whether Tribunal was correct in holding that income from sale of scrap i7ewspaper, stationery and battery etc., should be treated as profits and gains from exports and de....
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....nding of any of the authorities below in the present case as to whether the loan given to subsidiary company and staff advances were given by the assessee in ordinary course of business or not and hence, the AO has to examine this factual aspect and if it is found that such loan and staff advances are given by the assessee in ordinary course of business, then on resultant interest income earned by the assessee, deduction should be allowed under section 10A. Regarding the second aspect in respect of deemed income under section 41(1) of the IT Act, 1961, amounting to Rs. 107,62,841/-, we allow the claim of the assessee by following the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Wipro Ltd., (supra). 13. Regarding ground No.3, learned AR of the assessee submitted that as per note No.3 (i) of the audited accounts for the year ended 31.03.2004, it was reported that the company entered into agreement for services rendered to one of its customers where the customer has agreed to settle the consideration by transferring certain software programmes and annual maintenance services amounting to Rs. 157.14 Crores and the assessee company had considered these tra....
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.... Regarding ground No.4, it was submitted by learned AR of the assessee that on page No.168 of the Paper Book is a detail regarding realisation of export proceeds in respect of invoice Nos.1299 and 1226/2004-05. He pointed out that as per these details, invoice No.1299 for Rs. 131.22 lakhs was realised on 19.01.2007 and the second invoice of Rs. 461,760/- was realised on 19.12.2005 and these invoices are dated 31.03.2005 and 30.03.2005 respectively. Thereafter, he submitted that on pages 257 to 273 of the Paper Book is a rejoinder filed with CIT(A) on 21.07.2009 and in particular, our attention was drawn to para No.3.3 and 3.4 of this submission available on pages 261 and 262 of the Paper Book. It was pointed out that before the learned CIT(A), it was submitted that as per RBI's Master Circular No.9.2006-07 dated 01.07.2006 and Circular No.50 dated 03.06.2008 and Circular No.70 dated 30.06.2009, it was prescribed by RBI that unit set up under STPI Schemes are permitted to realize value of export proceeds within a period of 12 months from the date of export in respect of exports made on or after 01.09.2004. It was also pointed out that this was explained before the CIT(A) that these ....
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.... CIT(A) that the amount of Rs. 19.07 lakhs was considered by the AO mistakenly as brokerage when the actual brokerage paid was only Rs. 420,632/-. He submitted that since in Assessment Year 2004-05, the brokerage was allowed by the CIT(A) and since no appeal was filed by the Revenue before the Tribunal against this order of CIT(A), in the present year also, the claim of brokerage should be allowed. The learned DR for the Revenue supported the order of the CIT(A). 19. We have considered the rival submissions. We find that in Assessment Year 2004-05 in para 7.1 of his order, it is noted by the learned CIT(A) that the actual brokerage is only Rs. 420,632/- but the AO has disallowed Rs. 19.70 lakhs by mistake and this amount was incurred on employees referral bonus and only this is the finding given by the learned CIT(A) that this employee's referral bonus is an expenditure incurred in connection with the business and the same is therefore allowable and there is no finding by the learned CIT(A) in that year regarding brokerage charges and hence, the order of the CIT(A) for Assessment Year 2004-05 has no relevance in the present year. We find that in para Nos.29 and 30 of his order, ....