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2013 (2) TMI 263 - AT - Income TaxNon deduction of TDS u/s 194J - disallowance u/s 40a(ia) - Held that:- As decided in Merilyn Shipping & Transports Visakhapatnam V/s. ACIT Range-I, Visakhapatnam [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] the provisions of S.40a(ia) are applicable only in respect of the expenditure which remains payable as on 31st of the March of the relevant previous year, and such disallowance cannot be made in respect of the expenditure which has already been paid during the relevant previous year, though without deducting tax at source - thus set aside order of the CIT(A) and directing AO to allow the claim to the extent already paid. Deduction under S.10A - disallowance in the absence of requisite proof and details furnished by the assessee - CIT(A) allowed the claim - Held that:- The assessee is a software developer and this is not the first year of operation. In earlier years also, the assessee has claimed exemption under S.10A which was allowed by the AO as well. The assessee has filed all the requisite details as required under S10A before the CIT(A), thus no infirmity in the action of the CIT(A) in granting deduction under S.10A - AO cannot disturb the exemption under S.10A in the middle of the period, having granted the same in the earlier years, unless he has material to show that the assessee has violated any of the provisions of S.10A - in favour of assessee. Disallowance of US branch expenditure - assessee furnished the additional evidence as per Rule 46A(1)- Held that:- Effective opportunity of hearing has been granted by the CIT(A) to the AO,the Revenue has not placed any material to suggest that the CIT(A) has not given reasonable opportunity of hearing to the assessing officer. In the circumstances, the order of the CIT(A) is upheld that the expenses incurred by the assessee in foreign branch is for the purposes of business only and has to be treated as expended for the purposes of business. Further that enhanced income, if any, on account of any disallowance, is construed as income from exports only, consequently boosting the income eligible for exemption under S.10A. Even on that count also, the claim of be assessee has to be allowed. Expenditure claimed towards product development expenditure - Allowance as expenditure is not allowable for amortization - Held that:- As seen from the order of the CIT(A), this expenditure has been incurred by the assessee year after year and 10% of the product development expenditure is written off in the year under consideration. This being expenditure of regular nature, and has been incurred by the assessee for the purpose of business, we find no infirmity in the order of the CIT(A) on this issue - in favour of assessee.
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