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2017 (3) TMI 327 - AT - Income TaxExemption u/s 10A - whether the assessee has not justified or explained his claim that the employees had gone to US for training? - assessee company was a registered unit of Software Technology Park of India and had been providing human resources related to ITES services to its holding company in the US and claiming exemption u/s 10A Held that:- In order to substantiate the fact that the said services qualify for exemption u/s 1OA of the Income tax Act, the assessee enclosed Notification No. 890E dated 26.09.2000 issued by the CBDT, as per which Human Resources Services under Information Technology Enabled Products are eligible for the said exemption. Hence these facts make it clear that the assessee was entitled to exemption under section 1OA of the Act. It is also established that the assessee company was entitled to exemption u/s 1OA there is very little force left in the AO's position that the assessee company had concealed income derived by its employees on their visit to USA. If the employees had earned any Income during their visit to the holding company in USA, the assessee company could have shown the same and claimed exemption u/s 1OA of the Income Tax Act. Thus, any attempt by the assessee company to under-state its income by resorting to the practices mentioned above defies logic and common sense. CIT(A) has observed that during the course of appellate proceedings, it was revealed that a number of details submitted at the time of assessment proceedings were not acknowledged by the AO in his assessment order. These include note on expenses on travelling and expenditure on foreign training, copies of passports of Directors and some of the employees, addresses and e-mails ids of employees sent abroad, business work flow chart, etc. In addition during the course of appellate proceedings, the assessee submitted some more information which goes to establish the fact that the employees had gone on training rather than for rendering services abroad. This includes a note on the nature of training given, sample copy of training letters of employees selected for training, copy of passport and visa of the employees etc. Assessee also gave necessary documents to substantiate the fact that it is eligible for exemption u/s 1OA of the Income Tax Act. All these documents together with the assessee's submissions establishes the point that the 11 employees of the assessee company had gone for training to its holding company in the US. The assessee has explained the rationale for undertaking such training for its employees. The case law referred by in the case of CIT vs Samsung India Electronics Ltd. (2013 (7) TMI 365 - DELHI HIGH COURT) wherein has specifically held that expenditure incurred on training is allowable for the purpose of assessee's business. Therefore addition in dispute was rightly deleted by the Ld. CIT(A) - Decided against revenue
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