2013 (4) TMI 859 - AT - Income Tax

Summary

Issues involved: Interpretation of deduction u/s 10A for the assessment year 2007-2008.

Issue 1: Interpretation of deduction u/s 10A

The appeal by the Revenue challenged the order of the Commissioner of Income-tax (Appeals) regarding the deduction u/s 10A for the assessment year 2007-2008. The main ground raised was the contention that the profit derived by the assessee from the business of manufacturing Industrial Sewing Machine Needles was abnormally high due to an extraordinary arrangement with a German Co., and thus, the deduction of Rs. 34,32,68,706/- should not have been allowed. The AO had initially restricted the profit at 60% based on the preceding year's assessment, but the CIT(A) overturned this decision.

Issue 2: Precedent and Judicial Interpretation

Upon reviewing the facts and relevant material, the Tribunal noted a previous case from the assessment year 2004-2005 which had a similar issue regarding deduction u/s 10A. In that case, the Tribunal had accepted the assessee's claim for the full deduction u/s 10A. Furthermore, a judgment from the Hon'ble jurisdictional High Court had upheld the Tribunal's decision, dismissing the Revenue's appeal. Given these precedents, the Tribunal found that the question of deduction u/s 10A in the present appeal was settled law, and the CIT(A)'s decision was in line with the previous rulings. Therefore, the Tribunal upheld the impugned order and dismissed the appeal.

In conclusion, the Appellate Tribunal ITAT MUMBAI upheld the Commissioner of Income-tax (Appeals) decision regarding the deduction u/s 10A for the assessment year 2007-2008, based on established precedents and judicial interpretations.