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2014 (4) TMI 1224 - HC - Income TaxAdjustment contemplated by Section 10A - Tribunal has directed that the loss of one unit can be adjusted against the profit of another unit but after allowance of deduction under Section 10A of such profitable units - Held that:- The Tribunal has directed that the loss of one unit can be adjusted against the profit of another unit but after allowance of deduction under Section 10A of such profitable units. The loss of one unit under Section 10A of the Act shall be adjusted against the income liable for deduction under the same section but in relation to the income from other unit. As far as that aspect is concerned, the counsel agree that the same is answered in favour of the assessee and against the revenue. This controversy has been dealt with by a Division Bench of this Court in the case of Hindustan Uni Liver Ltd. v/s. Deputy Commissioner of Income Tax & anr. (2010 (4) TMI 206 - BOMBAY HIGH COURT) . Deduction of data line cost from export turn over - Deduction u/s 10A - Expenses which AO desired to pick were not incurred in relation to export and, therefore, cannot be termed as deductions permissible from export turnover - Held that:- These expenses have been incurred for the purposes of the business of software development at the software units in India. It is that finding which the Assessing officer was unable to controvert or unable to bring any contrary material to disprove the same. Tribunal found that the AO could not have insisted on the deduction. It is that exercise undertaken by AO which has not been upheld but rather disapproved by the Tribunal. This is a finding purely on the facts and pertaining to the business of the assessee. The facts pertaining to the assessee's business of software development, the charges and which are claimed to have incurred, are in relation to the business of software development within India. They could not be said to be costs deductible from export turnover for the purposes of Section 10A of the Act. In such circumstances, we are of the opinion that any wider controversy or larger question does not require any answer. Recompute the transfer pricing adjustment - Held that:- The Tribunal may have expressed some prima facie opinion in relation thereto, however, it has directed the Assessing officer to complete the same after giving an opportunity to the assessee in accordance with law. We are unable to find any substance in the complaint of Mr.Tejveer Singh that direction of the Tribunal or prima facie observations are binding the Assessing Officer in the fresh exercise. When the exercise is afresh the Assessing officer is directed to act in accordance with law, then, we do not think that any prima facie observation of the Tribunal will bind the Assessing officer or guide him to consider the claim in the particular manner. Additionally, we clarify that all contentions and objections in relation to this claim of both sides are kept open. The Assessing Officer shall decide the claim or issue strictly in accordance with law.
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