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2015 (4) TMI 754 - AT - Income TaxApportionment of software development expenses in ad hoc manner in export and domestic sales - Held that:- The assessee challenges apportionment of the impugned software development expenditure into domestic and export divisions @ 50:50 each by the Assessing Officer and affirmed in the lower appellate order. It files a correspondence from Software Technology Parks of India dated 29.03.2000 granting 100% export oriented permission under STP Scheme, its letter dated 16.12.2008, details of salary costs in the two divisions for financial year ended 31.03.2002 and its working, Auditors’ Report comprising balance sheet of the impugned assessment year, trading and Profit & Loss Account of the sales with accounting policies, notes on accounts, entries in export and domestic divisions and seeks to reverse the impugned allocation. The Revenue supports the lower authorities orders. The case file reveals that these documents have nowhere been specifically discussed in reassessment or in the lower appellate order. The dispute before us is essentially a factual one, i.e. whether or not the impugned allocation of software development expenditure in export and domestic sales division is justified. The Assessing Officer has based his findings on the sales quantities of the software to observe that the very software has been sold in domestic and export market. The assessee’s books treating the impugned expenditure only for domestic division have nowhere been rejected. Therefore, we deem it appropriate that the Assessing Officer needs to re-examine the entire issue afresh as per law. The assessee shall be at liberty to produce all its relevant details within three effective opportunities of hearing. We find that a lot of water has flown downstream since the end of the relevant assessment year 2001-02. It would be appreciated if the learned Assessing Officer passes his consequential order within a period of four months from getting copy of this order. - Matter remanded back.
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