TMI Blog2015 (4) TMI 589X X X X Extracts X X X X X X X X Extracts X X X X ..... on was fulfilled. The AO also observed that the Unit No.II & III have not been formed by splitting up or reconstruction of an existing business and are not formed by the transfer to a new business of machinery or plant previously used for any purpose. It is crystal clear from the remand report of AO that the units II and III fulfilled all the conditions prescribed under the relevant provisions of section 10A of the Act. Accordingly, we direct the AO to allow assessee's claim for deduction u/s.10A(2) of the Act in respect of Unit II and III.- Decided in favour of assessee. Disallowance made u/s.14A - Held that:- We direct the AO to compute the disallowance u/s.14A, in terms of directions issued by the Tribunal in assessee's own case [2013 (9) TMI 116 - ITAT MUMBAI], wherein the tribunal has directed the AO to consider all the materials placed by the assessee before it while computing disallowance u/s.14A of the Act. We direct accordingly. - Decided in favour of assessee for statistical purposes. - ITA No. 6394/Mum/2014 - - - Dated:- 21-1-2015 - R. C. Sharma, AM And Vivek Varma, JM,JJ. For the Appellants : Shri S M Lala, Shri Harsh Shah Shri Paras Savla For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rance claim processing. The date of initial registration with the Software Technology Park is stated to be on 22.07.1992. It is claimed that the unit started the manufacture or production of computer Software in June 2000 and it is 5th year of the deduction u/s10A. The total turnover of the undertaking/unit was quantified at a sum of ₹ 55. 96 Cr and the total turnover of the business was quantified at a sum of ₹ 166.13 Cr. The total profits derived by the undertaking / unit was quantified at a sum of ₹ 13.24 Cr and the total profit derived by the business was quantified at a sum of ₹ 74 Cr. 3.3 The facts as reported in the audit report in respect of unit -III are as under: It is claimed that unit -III was set up at Ground 3rd floor, HTMT House, 614, Vajpayee Nagar, Bommanahalli, Rosur Road, Bangalore -560068. It is certified that unit -III is registered with Software Technology Parks India, Bangalore and quantified the admissible deduction at a sum of ₹ 38,32,05,319/-. u/s 10A of the Act. Nature of the business of the undertaking is stated to be a call center. The date of initial registration in the Software Technology Park is stated to be on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms bonded warehouse licence No. 10/93 (customs) dt. 22.4.1993, which was valid upto 22.7.2002. The AO further stated that in response to letter dt. 25th November, 2008, Director STPI vide her letter dt. 10.12.2008 has categorically stated that Unit-II III are not separate units under the STP Scheme and they were only the expanded locations of the initial letter of permission dt. 22.7.1992 and no separate STPI registration was accorded. The AO has stated that Director, STPI, categorically stated that assessee has made or converted the initial unit as Unit-II III for the 'operational ease' and such bifurcation by assessee as Unit-II III should not be construed as two separate units. AO stated that Director, STPI also clarified that assessee expanded its existing STPI facility and therefore no separate registration under STPI scheme is required for the expanded locations, unless it claims that a separate unit is formed. Considering these facts, the AO held that assessee is not entitled to deduction u/s.10A of the Act in respect of Unit-II III and accordingly disallowed claim of assessee. 6. By the impugned order, the CIT(A) confirmed the action of the AO. 7. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to whether Unit Nos. II III set up by assessee are independent units to the existing undertaking or merely an expansion of the existing undertaking in the light of principles laid down by Coordinate Bench decision in the case of Patni Computers Ltd. (supra) and also in the light of letters including letter dt. 10.12.2008 issued by Director STPI and also on the basis of such evidences as may be filed by assessee after giving due opportunity of hearing. 8. In the set aside proceedings, the assessee filed complete detail before the AO and also relied on the decision of M/s Mara Overseas Ltd. and M/s Jayant Agro Organic Ltd. However, the AO has not considered the same and after reproducing the decision of his predecessor came to the conclusion that assessee was not entitled deduction u/s.10A in respect of Unit No.II III. We found that on the evidence available on record and as called for by the Ld.AO during the course of the examination of the facts, the Ld.AO observed that Unit-Il and III have been set up with fresh investment in plant and machinery, furniture and fixtures, etc. as can be seen from the tax audit reports for Financial Years 2000-01 and 2001-02. Separate book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bonding of these locations, as under: a) No. A206, 1st Floor, KSSIDC Complex, Block No.3, Electronic City, Bangalore - 561229- Unit II b) No. 614, First Floor Second Floor, Vajpayee Nagar, Bomannhalli, Hosur road, Bangalore-68 - Unit 11 c) No. 115, First, Second and Third Floor, 11th Mile, Garvebhavi Palya, Begur Hobli, Hongasandra, Bangalore. - Unit II d) No. 614, Ground Floor Third Floor, Vajpayee Nagar, Bomannhalli, Hosur road, Bangalore-68 - Unit III e) 49/50, MIDC, 12th Road, Marol, Andheri (E), Mumbai - 400093 9. From the record we found that on 28/10/2003 the Company i.e Hinduja TMT Limited has taken a separate registration with STPI, Mumbai for BPO Call Processing activity at Bangalore for the purpose of back end data backup. The first year of the claim of the appellant was for the Asst. Year 2001-02 which was allowed after a scrutiny assessment. Similarly the claims for the Asst. Years 2003-04 and 2004-05 were also allowed after a scrutiny assessment. For the Asst. Year 2005-06 the Assessing Officer however took a different stand and rejected the claim and thereafter reopened the assessments of the previous year as well. From the record we found that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (b) commencing on or after 1st day of April, 1994 in any Electronic hardware technology park or software technology park; or (c) commencing on or after 1st day of April,2001, in any Special Economic Zone; (ii) it is not formed by the splitting up or the reconstruction of a business already in existence except in the circumstances and within the period specified in section 33B of the Income-tax Act; (ii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. 4.6 As discussed above paragraphs, vide letter dated 20.07.2000 addressed to Director, STPI the assessee intimated that it had entered into an agreement to process. the insurance claims in India and the processing of the claims will be carried out as Unit-II Further. In respect of Unit-III. vide letter dated 3108.2000 addressed to Director. STPI, the assessee intimated that it had entered into an agreement to set up a call centre known as Unit-III. The assessee submitted copy of STPI letter dated 24.12.2008 recording the establishment of Units II and III. Thus, it is evident that the assessee has commenced its business activity in respect of Units II and III d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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