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PR. Commissioner of Income Tax Versus E-Funds International India Pvt. Ltd.

2015 (10) TMI 488 - DELHI HIGH COURT

Eligibility for exemption under Section 10A - Assessee is engaged in the business of software related services such as software design and development - Held that:- As rightly noted by the ITAT itself, this is not a case where any new claim for deduction under Section 10A of the Act has been made by the Assessee. This claim had been made in the original return itself. It is only the figure of profit that was changed in the revised computation as a result of wrongly showing a receipt in USDs with .....

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f the deduction under Section 10A of the Act, the Court declines to frame a question. - Decided against the Revenue

Entitlement of the Assessee to the deduction under Section 80HHE - Assessee has established a Shared Service Centre (“SSC”) at Gurgaon for rendering information technology related services and business process management services for which it claimed deduction under Section 80 HHE - According to the AO, no deduction under Section 10A would be allowed to the Assessee eith .....

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10 (10) TMI 592 - DELHI HIGH COURT ] and Commissioner of Income Tax v. EDS Electronics Data Systems (India) (P) Ltd. (2012 (11) TMI 586 - DELHI HIGH COURT) answer the question in favour of the Assessee and against the Revenue. These decisions explain that the making of a claim under Section 80HHE of the Act in one assessment year will not preclude an Assessee from claiming the benefit under Section 10A of the Act in respect of the same unit in a succeeding assessment year. It was explained that .....

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Advocates For the Respondent : Mr. Piyush Kaushik, Advocate ORDER Dr. S. Muralidhar, J. CM No. 15688/2015 (for condonation of delay in re-filing the appeal) in ITA No. 607/2015 CM No. 15689/2015 (for condonation of delay in re-filing the appeal) in ITA No. 608/2015 1. For the reasons stated in the applications, the delay in re-filing the respective appeals is condoned. 2. The applications are disposed of. ITA No. 607/2015 & 608/2015 3. These two appeals by the Revenue are under Section 260A .....

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2006 for the Assessment Year ( AY ) 2002-03. 6. ITA No. 608/2015 is directed against the order dated 20th October 2014 passed by the ITAT in ITA No.902/Del/2004 for the AY 2000-01. 7. The Assessee is engaged in the business of software related services such as software design and development. The business is conducted at the Software Development Centre ( SDC ) at Chennai for which the Assessee claimed exemption under Section 10A of the Act. Apart from this, the Assessee has established a Shared .....

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dated 30th December 2002 for AY 2000-01, noted that the business activities at the SDC unit at Chennai had resulted in a loss of ₹ 23,49,473 and, therefore, the Assessee was not eligible for exemption under Section 10A of the Act. 10. As regards the activities at the SSC unit at Gurgaon, the Assessee had earned an income of ₹ 4,25,60,064. However, after adjustment of business losses the gross total income was nil . Accordingly, the Assessee did not claim any deduction under Section 8 .....

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o submit the Auditor s report certifying the claim under Section 80HHE of the Act, the Assessee by a letter dated 16th September 2002, claimed that it was not required to furnish the Auditor s report but if the AO so required, it would arrange for the same. Subsequently on 8th November 2002, the Assessee wrote to the AO stating that there were certain administrative errors in the calculation of the revenues between the two units. As a result Revenues amounting to ₹ 2.8 crores pertaining to .....

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whereby the claim under Section 80HHE was made in the sum of ₹ 1,67,72,977. 12. The AO rejected the stand of the Assessee and noted that it had only filed a revised computation and not a revised return. It was held that although the net taxable income as per the original return and the revised computation remained the same, the significant changes in the profits of the Section 10A and non-10A units imparted an entirely new dimension to various facets of the case, leading to complete revis .....

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wrong statements may occur. There was a distinction drawn between a revised return and a correction in the originally filed return. Since the Assessee had failed to file the revised return within the time period stipulated under Section 139(5) of the Act i.e. by 31st March 2002, the CIT (A) held that the AO was justified in rejecting the claim made by the Assessee under the revised computation. 14. By the impugned order dated 20th October 2014 in ITA No. 902/Del/2014, the ITAT allowed the Assess .....

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from the Section 10A unit got converted into a profit in the manner computed shown in the revised computation of income. The ITAT was of the view that this was not a case where the Assessee had not made a claim under Section 10A in the original return of income and, therefore, the above correction did not result in the Assessee making any fresh claim. It was merely a case where a loss determined on account of an incorrect adoption of a receipt was corrected and as a result, the Assessee became e .....

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td. (supra), the Supreme Court clarified that an Assessee could not amend a return for claiming a deduction. A revised return had to necessarily be filed. He also pointed out that there was a distinction between a correction in the original return and filing a revised return and that the former was not permissible in law. 16. Mr. Piyush Kaushik, learned counsel for the Assessee, on the other hand, referred to the recent decisions of this Court in Commissioner of Income Tax v. Sam Global Securiti .....

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a) Ltd. (supra). The common thread running through the ratio in all the decisions of the High Courts is that while an AO may not be entitled to grant a deduction or an exemption on the basis of a revised computation of income, there was no such fetter on the appellate authorities. This was recently reiterated by this Court in a decision dated 25th August 2015 in ITA No. 644/2015 (Pr. Commissioner of Income Tax-09 v. Western India Shipyard Limited). In Sam Global Securities Ltd. (supra), this Cou .....

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the revised computation submitted beyond the time limit for filing the revised return under Section 139(5) of the Act. This Court noted that the decision in Goetze (India) Ltd. (supra) would not apply if the Assessee had not made a new claim but had asked for re-computation of the deduction. 18. Turning to the facts of the present case, as rightly noted by the ITAT itself, this is not a case where any new claim for deduction under Section 10A of the Act has been made by the Assessee. This claim .....

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cisions after considering the effect of the decision of the Supreme Court in Goetze (India) Ltd. (supra). Consequently, as regards the issue of the deduction under Section 10A of the Act, the Court declines to frame a question. 20. The second issued that arises from the impugned order dated 20th October 2014 of the ITAT in ITA No. 2004/Del/2006 for AY 2002-03 is the entitlement of the Assessee to the deduction under Section 80HHE of the Act. The AO was of the view that the Assessee had claimed a .....

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