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2016 (7) TMI 660 - AT - Income TaxInclusion of reimbursable cost as operating cost by TPO - Held that:- Exclusion of reimbursement cost from the operating cost for determining the ALP confirmed. Deduction u/s. 10A computation - Held that:- We direct the AO to re-compute the reduction u/s. 10A after reducing the communication charges both from the export turnover as well as total turnover Reduction of foreign exchange gain from business profits while computing deduction u/s. 10A - Held that:- We are considered that this issue is no longer res integra. In the case of ITO Vs. Banyan Limited [2008 (12) TMI 296 - ITAT AHMEDABAD ] it was held that the foreign exchange gain on account of fluctuation qua export business is eligible for exemption u/s. 10B. Since the foreign exchange gain is on account of fluctuation on foreign exchange received for the services rendered by assessee, this has to be treated as ‘profits of business’ for computing the reduction u/s. 10A. Non setting off the carried forward un-absorbed depreciation, business loss relating to non- STPI business - Held that:- Even on the principles of law, the issue was decided in favaour of assessee in the case of CIT Vs. Yokogawa India Ltd., by the Hon'ble High Court of Karnataka reported in [2011 (8) TMI 845 - Karnataka High Court ], wherein it was held that exemption u/s. 10A has to be allowed without setting of brought forward unabsorbed losses and depreciation from earlier assessment year, in the case of non-STP units. Applying the principles therein, the un-absorbed losses and depreciation in the case of non-STP units are to be separately considered and AO is directed to allow the same with reference to income of non-STPI units.
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