TMI Blog2014 (4) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 10A the addition made on account of the disallowance of the provident fund/ESIC payments ought to be ignored could not be accepted - No statutory provision to that effect having been made, the plain consequence of the disallowance made by the AO must follow - The Tribunal was justified in directing the AO to grant the exemption u/s 10A of the Act on the assessed income, which was enhanced due to disallowance of the employer’s as well as employees’ contribution towards PF/ESIC –thus, the order of the CIT(A) upheld - Decided against Revenue. Communication charges excluded from the export turnover – Held that:- The decision in ITO Vs Saksoft Ltd [2009 (3) TMI 243 - ITAT MADRAS-D] followed - expenses excluded from export turno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds No. 2 3 relating to the claim of deduction u/s 10A and 10AA, the assessee claimed deduction u/s 10A on the following amounts: Sl.No. Type of disallowance Amount 1. Provision for Gratuity disallowed u/s 40A(7) 33,24,353 2 Provision for leave encashment disallowed u/s 43B 63,60,959 3 Delay in remittance of PF disallowed u/s 43B 34,07,663 4 Bonus payable disallowed u/s 43B 87,05,012 Total 2,17,97,987 2.1 The Assessing Officer held that the income arising on account of statutory disallowances, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted position that the assessee had deposited both the employer s and the employees contribution towards provident fund and ESIC, though beyond the due date including the grace period. The AO added these payments to the total income of the assessee. The disallowance which was effected by the AO had not been challenged by the assessee. The plain consequence of the disallowance and the add back that had been made by the AO was an increase in the business profits of the assessee. The contention of the Revenue that in computing the deduction under section 10A the addition made on account of the disallowance of the provident fund/ESIC payments ought to be ignored could not be accepted. No statutory provision to that effect having been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 of 2007) (Hyd.) 6. Foursoft Pvt. Ltd. Vs. ACIT (2009 TIOL-18ITAT-Hyd.) 7. DCIT vs. Binary Sematics Limited (109 TTJ 556) 8. CIT vs. Chloride India Limited (256 ITR 625) 9. CIT vs. Suarshan Chemicals Industries Ltd (245 ITR 769) 10. CIT vs. Kantilal Chhotalal (246 ITR 439) 11. ACIT vs. Tata Elxsi Limited (201-TIOL-684-HC-KAR-IT) 4.1 The Special Bench of the Chennai Tribunal in the case of ITO Vs Saksoft Ltd (313 ITR AT 353) + held that expenses excluded from export turnover should also be excluded from the total turnover . The Hon ble Karnataka High Court has also taken similar view in the case of CIT Vs. Tata Elxsi Ltd. Others, 247 CTR 334 (Kar.). Respectfully following the said decisions cited supra the issue is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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