9911796707
TMI Blog2011 (5) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... nes related items. In the return filed for the assessment year 1997-98, the assessee had shown nil income whereas income under Section 115JA was shown at Rs.2,12,34,285/-. The assessment order was passed under Section 143(3) of the Act with the taxable income at Rs.29,61,56,079/-. While passing the assessment order, the Assessing Officer made several disallowance in respect of various claims raised as detailed in the assessment order. Amongst others, the assessee had claimed deduction on account of exemption under Section 10B of the Act and commission to the tune of 3.27% incurred on the sale of products under Section 37 of the Act. The Assessing officer disallowed the exemption under Section 10B. With regard to the commission on sale of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed we deem it fit and proper to restore the issue to the AO for fresh consideration. This is for the reason that the AO has complained that the assessee has not debited any expenses of 100% EOU while arriving at its profits. The AO will take into consideration the bifurcated accounts prepared by the assessee for the purposes of arriving at profit from100% EOU and allow the deduction u/s 10B of the Act in accordance with law. The AO will afford the assessee the opportunity of being heard in this regard." 2. It is against this impugned order on both these counts that the Revenue is in appeal before us. 3. With regard to the decision of the authorities below on various other claims and allowances of the assessee, it was an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de facilities under the STP scheme provided certain conditions are satisfied. As per clause (2)(i) of this letter the entire 100% production was to be exported against hard currency. In addition to this, there were various other terms and conditions, which were to be confirmed by the assessee. Thereafter, in agreement dated 5th January, 2009 between the assessee and the Government of India, the conditions laid down by the Director, STP, were more or less accepted by the assessee. The assessee filed profit and loss account and the balance sheet of the software division as under:- P and L Account: Various expenses claimed 18185143 Income from sale of software RX 15413500 Net profit 20811212 Income from sale of software XC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sheet. (ii) All remittances against exports have come to Modi Xerox Ltd. (assessee) only. (iii) No separate fixed assets are reflected in the balance sheet (assets side) of the software division. 7. For all these reasons, the AO recorded finding of fact that there were no direct export of software by any separate 100% EOU setup in the STP area, NOIDA. No new units were setup but the profit in this alleged unit has been generated by inter unit transfers only as is clear from the balance sheet wherein inter unit STP account of Rs.2.30 crore is shown on the asset side. The export of software, if any, were done by Modi Xerox Limited only as is clear from the invoice and not by any new internal undertaking. Since there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout even caring for seeking their verification either at his level or that of AO, it apparently appears, the Tribunal acted to arrive at such a conclusion without any application of mind. Based on those documents lying in the paper book of the assessee, the Tribunal seems to have jumped over the conclusion of the assessee having established a 100% EOU. It may be noted that merely because the assessee had been permitted to establish a new industrial undertaking for the manufacture of computer software as 100% EOU under the STP scheme was itself not enough to record a finding that the said unit had in fact been established and was entitled to claim the exemption as applicable under Section 10B of the Act. We are of the view that the matter n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance of the dealers commission had been made. The CIT(A) went through the details of the dealers commission in respect of Lucknow and Jangpura region for verification on test-check basis. The CIT(A) recorded that the assessee had given full details of dealers commission in respect of Lucknow and Jungpura region for verification on test-check basis but no verification was done by the AO and AO did not find any dealer commission or any portion thereof to be bogus or excessive. Regarding restricting the said commission at 3% without any reason was an arbitrary decision of the Assessing Officer. The Tribunal though agreed with the findings recorded by the CIT(A) in this regard but referred to some of the pages lying in the assessee‟ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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