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The Dy. Commissioner of Income-Tax Versus M/s. Data Software Research Company (P) Ltd.

2015 (9) TMI 1282 - ITAT CHENNAI

Claim of the assessee u/s 10B - claim of the assessee was rejected by AO on the ground that the approval from the Board as required under the provisions of section 10B was not obtained - assessee made an alternative claim u/s 10A - only contention of the ld. DR is that the assessee cannot make a claim unless the same was made in the return of income - Held that:- As gone through the judgment of the Apex Court in M/s Goetze (India) Ltd (2006 (3) TMI 75 - SUPREME Court) wherein held that for the p .....

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- Decided in favour of assessee.

Setting off of losses of non 10B unit against profits of 10B unit - Held that:- The Special Bench of this Tribunal in Scientific Atlanda Tec P. Ltd.(2010 (2) TMI 658 - ITAT, CHENNAI) found that the brought forward losses and depreciation need not be set off for computing deduction u/s 10B of the Act. - Decided in favour of assessee.

Exclusion of foreign travel and communication expenses from the export turnover - Held that:- It is not in di .....

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nfirmity in the order of lower authority - Decided against revenue.

Disallowance u/s 14A - AO admittedly, disallowed 10% of the dividend income. However, the CIT(A) deleted the same. Asseessee submitted that 2% of the dividend income may be disallowed - Held that:- The Assessing OfficerAssessing Officer is directed to disallow 2% of the dividend income as expenditure relatable to exempted income. The order of the CIT(A) is set aside and the Assessing Officer is directed to disallow on .....

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ears 2006-07 and 2009-10. Since common issues arise for consideration in both the appeals, we heard them together and dispose of the same by this common order. 2. The first ground of appeal is with regard to claim of the assessee u/s 10B of the Act. 3. Shri N. Madhavan, ld. Departmental Representative submitted that the assessee made a claim u/s 10B of the Act in the return of income. The Assessing Officer found that no certificate was produced from the Board of Approval for claiming deduction u .....

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en allowed by the CIT(A). 4. On the contrary, Shri Vikram Vijayaraghavan, ld. Counsel for the assessee submitted that the claim of the assessee u/s 10B was disallowed by the Assessing Officer, therefore, the assessee made an alternative claim u/s 10A before the CIT(A). The CIT(A) by following the judgment of the Hon'ble Madras High Court in Heartland KG Information Ltd(supra) allowed the claim of the assessee. By placing reliance on the judgment of the Hon'ble Delhi High Court in CIT vs .....

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ired under the provisions of section 10B was not obtained. Therefore, the assessee made an alternative claim u/s 10A of the Act. The only contention of the ld. DR is that the assessee cannot make a claim unless the same was made in the return of income. We have gone through the judgment of the Apex Court in M/s Goetze (India) Ltd (supra). The Apex Court found that for the purpose of making a claim, the same has to be made in the return of income. In the very same judgment, the Apex Court found t .....

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ts of 10B unit. 7. Shri N. Madhavan, ld. DR submitted that by placing reliance on the decision of Special Bench of this Tribunal in the case of Scientific Atlanda Tec P. Ltd., 129 TTJ 273, the CIT(A) has allowed the claim of the assessee. According to the ld. DR, this Tribunal in Sword Global (I) P. Ltd, 306 ITR (AT) 286, considered an identical issue and found that brought forward losses and depreciation were first required to be set off against the business profits of the current year before c .....

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preciation need not be set off. 9. We have considered the rival submissions on either side and also perused the material available on record. The Special Bench of this Tribunal in Scientific Atlanda Tec P. Ltd.(supra) found that the brought forward losses and depreciation need not be set off for computing deduction u/s 10B of the Act. We have also gone through the order of this Tribunal in Sword Global (I) P. Ltd. (supra). This decision was delivered by a Division Bench of this Tribunal. Therefo .....

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cation expenses from the export turnover. However, on appeal by the assessee, the CIT(A) directed the Assessing Officer to exclude the same from the total turnover also by placing reliance on the decision of the Special Bench of this Tribunal in Sak Soft Ltd, 121 TTJ 865. According to the ld. DR, the Revenue has already filed an appeal before the Hon'ble Madras High Court against this order of the Special Bench and the same is pending. 12. We heard Shri Vikram Vijayaraghavan, ld. Counsel als .....

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ity in the order of lower authority. Accordingly, the same is confirmed. 14. The next issue is with regard to disallowance u/s 14A of the Act. 15. Shri N. Madhavan, ld. DR submitted that the Assessing Officer disallowed 10% of the dividend income u/s 14A on the ground that the expenditure was relatable to exempted income. However, the CIT(A) has deleted the entire addition made by the Assessing Officer. According to the ld. DR, the expenditure relatable to exempted income has to be computed unde .....

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