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2011 (6) TMI 735 - AT - Income Tax
Disallowance of deduction claimed u/s 010A - Non-maintenance of separate books of accounts - HELD THAT:- In view of the fact that the maintenance of separate books of account for STP Units is not a condition laid down in the provisions of s.010A of the Act and also in conformity with the rulings of the (i) CWT Vs KRIPASHANKAR DAYASHANKER WORAH [1971 (7) TMI 4 - SUPREME COURT] (ii) SMT. TARULATA SHYAM Vs CIT, [1977 (4) TMI 3 - SUPREME COURT], (iii) PHILIP JOHN PLASKET THOMAS Vs CIT [1963 (3) TMI 45 - SUPREME COURT] and the finding of the Hon’ble Bench in the assessee’s own case for the immediately preceding AY, we are of the considered view that the Ld. CIT (A) was not justified in denying the legitimate claim of the assessee u/s 010A of the Act. It is ordered accordingly.
Disallowance sub-contracted work - HELD THAT:- The fact remains that the assessee had exported from STP Units and the engagement of the sub-contractors by the assessee to whom assessee paid from its bank account maintained abroad which only provided services to the assessee and have not exported anything by themselves and it would not be considered as exports, unless provision of those services from one STP unit to another unit that exports is considered as exports within the meaning of the Act. Since it is accepted that it is the assessee who had exported computer software for which it was paid, the entitlement of exemption u/s 010A is satisfied. In conformity with the reasoning of the Hon’ble Bench, we are of the considered view that the assessee is entitled to relief u/s 010A of the Act in respect of the work subcontracted by IBM India. It is ordered accordingly.
Deduction on bad debts - In the case of CIT v. Star Chemicals (Bombay) P. Ltd. [2008 (2) TMI 399 - BOMBAY HIGH COURT] held that u/s 036(1)(vii) and Circular No.551 dated January, 23, 1990 if the assessee had written off the debt as a bad debt that would satisfy the purpose of the section. Accordingly, we hold that the bad debts written off by the assessee in its books of account shall be allowed as a deduction. It is ordered accordingly.
Disallowance claim for exclusion of foreign currency expenses - The assessee’s claim for exclusion of foreign currency expenses from both the export turnover as well as total turnover. it is held that up-linking charges which are reduced for ascertaining the export turnover are also not to be considered for the purposes of total turnover, as total turnover is sum total of export turnover and internal turnover. We are in total agreement with the observations of the earlier Bench as well as the Hon’ble special Bench of Chennai Tribunal on the issue. It is ordered accordingly.
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