TaxTMI 
TaxTMI 
2020 (8) TMI 666
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....lating to assessment year 2013-14. 2. The grounds of appeal raised by the assessee reads as follows:- "1. That on the facts and in the circumstances of the case and in law, the order passed by the Learned Assessing Officer ("Ld. AO") is bad in law. 2. That the Learned Dispute Resolution Panel ("Ld. DRP")/ Ld. AO erred in law and on the facts and in the circumstances of the case in reducing the deduction allowable under section 10AA of the Income-tax Act, 1961 ("the Act") by Rs. 2,473,721 on account of adjustment of expenditure incurred on telecommunication expenses from the export turnover. 2.1. That the Ld. DRP/Ld. AO ought to have appreciated that the telecommunication expenses can be reduced only to the exte....
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....ncome earned by assessee is automatically reinvested as per the scheme and no such expenses have been incurred by the assessee for earning the exempt income. 3.2 That the Ld. DRP/ Ld. AO erred in law and on the facts and circumstances of the case by not taking cognizance of the detailed submission filed by the appellant. 3.3. Without prejudice to above Grounds, the Ld. DRP/ Ld. AO has erred in disregarding the fact that the disallowance of Rs. 518,427 pertains to the SEZ unit of the Assessee and addition made to the income of the Assessee of Rs. 518,427 should be entitled for enhanced deduction under section 10AA of the Act. 4. That the Ld. AO has grossly erred on facts and in law by initiating penalty proceedings....
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.... turnover." 4. The additional ground is an alternative ground on the original ground No.2 raised by the assessee in the Memorandum of grounds filed alongwith the appeal and therefore the same is admitted for adjudication. 5. As far as grounds 2.4 & 2.5 are concerned, the issue is with regard to computation of deduction u/s. 10AA of the Act. The AO reduced the expenditure incurred on telecommunication expenses from the export turnover for the purpose of allowing deduction u/s. 10AA. The DRP confirmed the order action of the AO. The assessee's alternative plea was that if the telecommunication expenses are regarded as expenses to be excluded from the export turnover, the same should also be excluded from the total turnover while computi....
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....e disallowance u/s. 14A. 9. In support of the claim for such deduction, the ld. counsel for the assessee placed reliance on the decision of the ITAT Bangalore Bench in the case of GE (India) Exports P. Ltd. v. DCIT [2018] 82 taxmann.com 464 [Bang. Trib.] wherein it was held as follows:- "11. The ground appeal of the assessee at 2.1 is as under:- "Without prejudice to the above, even assuming but not admitting that the above amount of Rs. 19,40,000/- is disallowance u/s 14A of the Act, the ld CIT(A) erred in upholding the order of the ld AO in not granting the relief u/s 10A of the Act on the enhanced income." In this regard, the ld AR has submitted that in case this Tribunal disallows the ground 2.1 and held th....
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....bmitted that the judgment relied upon by the ld AR are not applicable to the facts and circumstances of the case. Further, it was contended that for the purposes of sec. 10A, the income which is derived by an undertaking from the export of article etc. allowable as deduction from the total income of the assessee. The judgment referred by the ld AR viz., iNautix Technologies India (P) Ltd., was on different facts and in fact. The coordinate bench in the matter of iNautix Technologies India (P) Ltd., has relied upon the judgment of Bombay High Court in Gem Plus Jewellery India Ltd. case (supra) wherein it was held that the assessee was entitled to exemption u/s 10A with reference to addition or disallowance of various payments as the plain co....