TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 1597
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.... realization post the filing of original return of income and deduction under section 10AA of the Income-tax Act, 1961 (for short 'the Act') was recomputed accordingly. The Assessing Officer in his order dated 30.03.2016 passed u/s. 143(3) of the Act has assessed the net income of the assessee at Rs. 959,94,93,705/- after making certain additions and disallowances. 3. Aggrieved, assessee preferred an appeal before the ld. CIT(A), who vide impugned order dated 18.10.2016 has partly allowed the appeal of the assessee. 4. Aggrieved with the ld. CIT(A)'s order, Revenue as well as Assessee both are in cross appeals before us raising various grounds of appeal. 5. First we take up Revenue's appeal wherein Revenue has taken the following grounds of appeal :- "Revenue's Appeal (ITA No. 6414/Del/2016) 1. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in treating income of Rs. 12,49,13,689/- from interest on fixed deposits as eligible for deduction u/s 10A & 10AA of the I.T. Act, 1961. 2. Whether on the facts and circumstances of the case & in law, the Ld. CIT(A) erred in treating income of Rs 1,92,57,781/- from interest on inter corporate deposits....
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....drafted by the AO. During the year under consideration, the issue in dispute is only vis-a-vis deduction claimed u/s. 10AA of the Act. He further submitted that in the assessment order at page 4 vide para no. 4.4, AO recorded that this income "is being taxed as income from other sources and exemption u/s. 10AA is not allowable on this income", however thereafter at pages 22 and 23, the AO further clarified his above conclusions by taxing these interest income as "Other Business Income". He further submitted that recently identical issue has been decided in favour of the assessee by the ITAT in assessee's own case for the assessment year 2011-12 in ITA Nos.4060 & 4251/Del/2016 vide order dated 29.04.2024 and the relevant issue is discussed at para 7 onwards with conclusions in para 7.5. He further submitted that these interest incomes are incidental to the IT / IT Enabled Service business carried on by the assessee. Interest earned on fixed deposits and inter corporate deposits are part of the export business of the undertakings claiming deduction under section 10A/10AA of the Act as the assessee had placed temporary surplus generated out of revenue, earned from export of Informatio....
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....ation, the issue in dispute is only vis-a-vis deduction claimed u/s 10AA of the Act. For the year under consideration, foreign exchange gain pertaining to undertaking eligible for deduction under section 10AA was Rs. 24,72,40,126/ and deduction us 10AA was claimed on this. It was further submitted that recently identical issue has been decided in favour of the assessee by ITAT in assessee's own case for AY 2011-12 (supra) and the relevant issue was discussed at para 8 onwards with conclusions in paras 8.5 to 8.8. He further relied on the following decisions: (i) Pentasoft Technologies reported in 347 ITR 578 (Mad). (ii) Gen Plus Jewellery reported in 233 CTR 248(Bom) (iii) Cognizant Technology Solutions reported in (2023) 151 taxmann.com 401(Mad) SLP dismissed in 454 ITR 1 (SC). 10. Per contra, Ld. DR neither controverted the aforesaid contention of the Ld. AR nor placed any contrary decision before us. 11. In the background of the aforesaid discussions and precedents relied upon by the ld. AR, we do not find any infirmity in the order Ld. CIT(A) on this issue, hence, we uphold the same and reject Ground no. 4 raised by the Revenue. 12. As regards ground no. 5 relating to ....
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.... therefore, the quantum of export turnover for deduction u/s 10AA does not include such recovery and hence no exclusion is warranted from the export turnover. Furthermore, the assessee has not provided any technical service outside India as the predominant objective is migration of work to Indian units whereby assessee sends people abroad to customer locations to understand in detail the client's operation, data processing system. etc. to prepare for shift of data processing work from abroad to India. It is therefore submitted that since as per Explanation 1(i) only "expenses, if any, incurred in foreign exchange in providing the technical services outside India" is to be excluded, as the same has no applicability in the instant case as the assessee did not incur the said expense for provision of any technical service. In the present case, the export bills were raised by the assessee to its overseas customers basis the agreed rates/ remuneration methodology in respect of the projects executed. Revenue from the contracts is recognized by the assessee on the basis of billable time spent by the employees working on the project, priced at the contracted rate. Telecommunication expe....
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.... further submitted that recently identical issue has been decided in favour of the assessee by ITAT in assessee's own case for AY 2011-12 (supra) and the relevant issue is discussed at para 10 onwards with conclusions in para 10.1. He further submitted that the assets like printers, routers along with other accessories/ peripherals form one integrated system and would be of no use independently of each other. Therefore, all such facilities form part of computers and are hence eligible for depreciation rate specified for "Computers'. The issue is now squarely covered by the following decisions :_ - Hotel Excelsior reported in 141 TTJ 248 (Dell) - Delhi High Court in case of BSES Yamuna Powers ITA No. 1267 of 2010 order dated 31.08.2010 - Orient Ceramics reported in 200 Taxman 64(Del)@ para 13 - Delhi High Court in case of M/s Birlasoft Ltd. ITA No. 1284 of 2011 order dated 15.12.2011 21. Per contra, Ld. DR neither controverted the aforesaid contention of the Ld. AR nor placed any contrary decision before us. 22. In the background of the aforesaid discussions and precedents relied upon by the Ld. AR, we do not find any infirmity in the order Ld. CIT(A) on this issue, he....
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.... in upholding the order of AO partly and not allowing complete relief as claimed. 6. That on facts and in law the order passed by Assessing Officer {herein above referred to as the "AO"} is void ab initio and bad in law." 27. Assessee has also raised the Additional Ground which is relating to restricting rate of DDT to 5% as per DTAA as against a rate of 16.2225% as per section 115-O. Ld. AR submitted that this additional ground of appeal is purely a legal issue and should be allowed to be raised even at the appellate stage. To support his contention, he relied upon the various citations including NTPC vs. CIT (1998) 229 ITR 383 (SC) etc.. In view of the aforesaid settled law, we deem it appropriate to admit the aforesaid additional ground and deal in the following manner. 28. Ld. AR for the assessee himself admitted that on merits the issue presently stands decided against the assessee by the ITAT, Special Bench decision in the case of Total Oil India (P) Ltd. reported in [2023] 149 taxmaan.com 332 (Mumbai- Trib) (SB). Ld. DR agreed that this issue is against the assessee and prayed that this may be dismissed. In view of the aforesaid Special Bench decision, we dismiss this ad....