TaxTMI 
TaxTMI 
2021 (1) TMI 168
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.... therefore, the questions raised in the present appeals can be answered accordingly, with respect to Section 10A and 10B of the Income Tax Act. 2. In view of the above submission, the following order is passed. 3. The summary of the coverage of various questions in the form of a chart prepared by both the counsel jointly, is quoted below for ready reference: S.No. Issue SQL and Appeal No. Covered by 1 Tax holiday on provisions no longer required written back (towards link charges and annual day expenses) TCA No.83 of 2017 (SQL 1 & 2) TCA No.84 of 2017 (SQL 3 & 4) TCA No.85 of 2017 (SQL 1, 2 & 3) Covered in favour of the Assessee by the order of this Hon'ble Court in TCA Nos.206 & 207 of 2009 in the case of ....
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.... an undertaking from the export of article or thing or computer software? (3) Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the gain on foreign exchange fluctuation is eligible for deduction under Section 10A even though the said gain nothing to do with the realized income from the eligible undertaking and was a result of restatement of outstanding balances on the last date of the financial year? TCA No.84 of 2017 - Assessment Year 2003-04 (1) Whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that the communication charges are to be excluded both from the total turnover and the Export turnover while computing deduction under....
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.... especially when the annual day events was celebrated in the year 2001 for which expenses were provided in the year 2000? TCA No.86 of 2017 - Assessment Year 2004-05 (1) Whether on the facts and in the circumstances of the case, the Tribunal was correct in holding that the communication charges are to be excluded both from the total turnover and the Export turnover while computing deduction under Section 10A especially when the explanation clearly stipulates that in the case of Export turnover alone it is to be deducted? (2) Is not the finding of the Tribunal bad, especially when Section 10A postulate that the expenditure incurred in foreign exchange in providing technical services outside India has to be reduced from t....
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....en by the learned Tribunal is not sustainable." 7. As far as the substantial question of law with regard to Foreign Exchange Fluctuation Gain is concerned, the same is covered by the decision in CIT v. M/s. Pentasoft Technologies Ltd. [(2010) 347 ITR 578 (Mad.)], the relevant portion of the same is quoted below: "4. In order to allow a claim under Section 10A of the Act, what all is to be seen is whether such benefit earned by the assessee was derived by virtue of export made by the assessee. The exchange value based on upward or downward of the Rupee value is not in the hands of the assessee. In other words, the assessee does not determine the exchange value of the Indian Rupee. It has to be remembered but for the fact that the....
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....head "profits and gains from business" in Chapter IV and denied the benefit of deduction. The provisions of Sub-section (6) of Section 10A, as amended by the Finance Act of 2003, granting the benefit of adjustment of losses and unabsorbed depreciation etc. commencing from the year 2001-02 on completion of the period of tax holiday also virtually works as a deduction which has to be worked out at a future point of time, namely, after the expiry of period of tax holiday. The absence of any reference to deduction under Section 10A in Chapter VI of the Act can be understand by acknowledging that any such reference or mention would have been a repetition of what has already been provided in Section 10A. The provisions of Sections 80HHC and 80HHE....
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.... not have any material relationship with the other business of the assessee outside these zones or units for the purposes of this provision." 17. If the specific provisions of the Act provide [first proviso to Sections 10A(1); 10A (1A) and 10A (4)] that the unit that is contemplated for grant of benefit of deduction is the eligible undertaking and that is also how the contemporaneous Circular of the department (No.794 dated 09.08.2000) understood the situation, it is only logical and natural that the stage of deduction of the profits and gains of the business of an eligible undertaking has to be made independently and, therefore, immediately after the stage of determination of its profits and gains. At that stage the aggregate of t....