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2019 (9) TMI 155 - HC - Income TaxDeduction u/s 10A - whether foreign exchange gains should form part of the profits for the purpose of deduction ? - HELD THAT:- Issue covered in favour of the assessee and against the Revenue in the assessee’s own case for the assessment year 2001-02 [2010 (7) TMI 75 - MADRAS HIGH COURT] wherein a Division Bench of this Court held that gain due to fluctuation in foreign exchange rate is directly related to the export sales of the assessee and cannot be treated as other than part of profit from export. Income from training activity, sale of hardware and software and 39.33% of ‘miscellaneous income’ are part and parcel of income for exemption under Section 10A - HELD THAT:- We find that there is inconsistency in the order in the sense that the Tribunal, considered the issue relating to net income from training activity, which was held to be part and parcel of the assessee’s income entitled to exemption under Section 10A of the Act. The Tribunal, after taking note of its decision in the assessee’s group companies’ case remanded the matter back to the file of the Assessing Officer for deciding the issue afresh after examining the true nature of the training activities and character of income earned by the assessee out of such activity. Tribunal dismissed the Revenue’s appeal and upheld the order passed by the CIT(A) with regard to the miscellaneous income namely 39.33%, which was, according to the assessee, derived from its own training centres. The Tribunal could have followed its earlier order in the assessee’s group companies’ case and remanded the issue and could not have rejected the Revenue’s appeal and affirmed the finding with regard to the miscellaneous income. Therefore paragraph 10 of the impugned order passed by the Tribunal requires to be set aside. As assessee points out that the Central Board of Direct Taxes issued a circular in Circular No.717 dated 14.8.1995, which gives explanatory notes on the provisions of the Finance Act, 1995. It is pointed out in paragraphs 21.3 and 21.4 of the said Circular with regard to the benefits provided to units in free trade zones. Hence, it is submitted that de hors the findings of the CIT(A) with regard to the Third Proviso to Section 10A of the Act, the assessee has got a strong case based on the substantive provision such as Section 10A of the Act prior to its substitution by the Finance Act, 2000 with effect from 01.4.2001 - as matter has been remanded to the Assessing Officer for verification and for a fresh consideration, we give liberty to the assessee to raise this contention before the Assessing Officer Disallowance of depreciation - Tribunal confirming the order of the CIT (Appeals) by merely observing that there was no merit in the ground raised by the Revenue on the issue of deletion of depreciation - HELD THAT:- the order passed by the Tribunal does not contain elaborate reasons. But, the Tribunal affirmed the order passed by the CIT(A). Therefore, we are required to see as to whether the order passed by the CIT(A) contains sufficient reasons, which prompted the Tribunal to confirm the same. On a reading, it is evidently clear that the CIT(A) has done a thorough and elaborate exercise and arrived at a finding.
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