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2013 (1) TMI 767 - AT - Income TaxDisallowance of expenditure u/s 10A - foreign currency expenditure and telecommunication expenditure - Held that:- The assessee eveloped software on contract basis according to the agreement and handed over the same to the customer - expenditure incurred was for development of software according to the software development agreement entered into between the client and the assessee and therefore the expenses incurred in that connection in foreign currency cannot be excluded from the export turnover - Decided im favor of assessee Telecommunication expenditure incurred in Indian currency should not be excluded from the export turnover as per the judgment of the Income-tax Appellate Tribunal, Hyderabad Bench in the case of Patni Telecom P. Ltd. vs ITO, [308 ITR (AT) 414] - Decided im favor of assessee Can the losses of eligible units be allowed to set off against other taxable profits u/s 10A - Held that:- held that the current year’s profit of the eligible units should not be reduced by setting off of the brought forward losses of earlier years even though relating to eligible units - The AO has to give deduction under section 10A on eligible profits of the current AY - Decided im favor of assessee Disallowance of 2% of exempt income treating as expenditure u/s 14A - Held that:- the disallowance of 2% made by the assessing authority is reasonable - also the profit for the purpose of section 10A will be enhanced to the extent of the above disallowance - partly decided in favour of the assessee
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