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2012 (11) TMI 536 - AT - Income TaxComputation of eligible income for deduction u/s 10A Treatment of misc. income, credit Balance written back Held that:- Following the decision in case of EXTRUSION PROCESS PVT. LTD. (2006 (6) TMI 261 - ITAT MUMBAI), there is no decision to the contrary brought to its notice and finally decided the issue in favour of the assessee. In favour of assessee Notice period salary for the purposes of arriving at the deduction u/s 10A Held that:- Since the said amount represents recovery of the business expenses earlier incurred by the assessee in recruiting and training of the employees concerned, the income arising on account of such recovery also represents the business income of the assessee. Included in income. In favour of assessee Eligible income u/s 10A - Foreign exchange fluctuation gain Held that:- Following the decision in case of Renaissance Jewellery (P.) Limited. (2005 (5) TMI 246 - ITAT BOMBAY-G) held that the profit on account of foreign exchange gain is directly referable to the articles and things exported by the assessee. Such profits are, therefore, in the same nature as the sale proceeds and there is no reason while deduction u/s 10A should not be allowed in respect of such exchange gain. In favour of assessee Interest income for purposes of computing eligible income u/s. 10A Held that:- Following the decision in case of Navbharat Explosives Co. P. Ltd. (2010 (6) TMI 588 - CHHATTISGARH HIGH COURT) wherein it was held that the income by way of interest on fixed deposits is not eligible for special deduction u/s 10A. In favour of revenue Deduction u/s 10A - Sales made to the branch office located in US AO argued that it is merely a case of transfer Held that:- Following the decision in case of Virage Logic International (2007 (1) TMI 299 - ITAT DELHI) held that the said exports constitutes sales. As the transfers between the HO and the Branch Office and vice versa with the approval of the STPI clubbed with satisfaction of other conditions like realization of proceeds in foreign exchange, constitutes exports for the purpose of the deduction u/s 10A. In favour of assessee Disallowance made invoking Sec 195 r.w. Sec. 40(a)(ia) - DTAA with USA Whether remittance made by the assessee to its branch office abroad subject to TDS provision - Assessee made payment to its US Branch on account of work sub-contracted to them Held that:- Following the decision in case of GE India Technology Centre Private Ltd. (2010 (9) TMI 7 - SUPREME COURT OF INDIA) that these payments are outside the scope of Sec 195 for the reason that the branch office abroad is part and parcel of the assessee and it is a 'resident' in status and 'not non-resident', as made out by the Revenue. The provisions of Sec 195(1) mention clearly that only the payments to non-residents attract provisions of Sec 195. Issue is decided in favour of the assessee
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