TMI Blog2016 (8) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... has upheld the action of the AO in adding back the loss on sale of assets. Additionally, the Ld. CIT(A) directed the AO to verify claim that the loss related to STPI unit and if the claim was found verifiable, the claim u/s 10A be recomputed on enhanced profits. We have already held , while deciding ground No. 1 of appeal filed by the revenue, that the assessee is eligible for claim u/s 10A of I.T. Act. Therefore we find no infirmity in the direction of the Ld. CIT(A)’s direction to AO to recompute benefit u/s 10A of I.T. Act. - ITA No. 283/Del/2012, CO No. 167/Del/2014 - - - Dated:- 2-8-2016 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER Department by : Shri Rajesh Kumar, Sr. DR Assessee by: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 2,51,52,240/- wherein assessee had claimed deduction of ₹ 8,70,25,513/- u/s 10A of the Act. The return was selected for scrutiny and notices u/s 143(2) were issued. The case was discussed by the Ld. A.O. During the assessment proceeding, the Ld. A.O. observed that the assessee is deriving income from business of development and sale of software products, as well as rendering software services. The assessee company was incorporated on 6.7.1995. The assessee shows received approval from STPI authorities on 28.3.2000. From assessment year 2001-02 onwards the assessee began to claim deduction u/s 10A of I.T. Act. From paragraphs 2.1 and 3 of assessment order it appears that the assessee claimed deduction u/s 80HHE of I.T. Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from A.V. 1996-97 in light of Circular No. 1 of 2005 issued by CBDT dated 06.01.2005. iii) Provisions of S.10A(9) of the Act would apply to the assessee and the assessee would not be eligible to claim deduction u/s.10A of the Act if on the last day of the previous year the shares of company carrying not less than 51% of the voting power are not held by persons who held the shares carrying not less than 51% of the voting power on the last day of year in which the undertaking was set up. The Ld. CIT(A), in turn examined the shareholding pattern of the assessee as on 31.3.1996 and 31.3.2002 and concluded that the conditions of S. 10A(9) of the Act were violated and, hence, the assessee is not eligible to claim deduction u/s 10A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has given the chronology of events in support of his contention. This is extracted herein below for ready reference:- (1) 06.07.1995: Assessee Company incorporated and started domestic unit engaged in local sale of various computer software. (2) F. Y. 1999-2000: Assessee company started export unit for rendering software development services and for that purpose undertook various activities as under: 06.08.1999: Board resolution for registering the export oriented unit with STPI. 23.09.1999: Agreement with M/s Direct Credit Exchange Ltd., UK for manufacturing and export of software. 11.12.1999: Premises of ground floor of the same building taken on lease to shift existing domestic unit. 03.02.2000: Advance received fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot necessary to go into the other aspects of this issue in this year. 6.2 We also notice that for the year under consideration, the assessee is not hit by section 10A (9) of I.T. Act, as it stood omitted by the Finance Act 2003 w.e.f. 1.4.2004. Respectfully following the decision of this Tribunal in assessee s own case, for asstt. year 2001-02 and circular No. 1 of 2005, we hold that the assessee is eligible for claim u/s 10A of I.T. Act for asstt. year 2005-06. 7. In second ground of appeal, Revenue has objected to direction issued by Ld. CIT(A) to Ld. AO to verify the assessee s claim that the loss relates to the STPI unit by treating the loss on sale of assets of ₹ 14,06,578/- as business loss and to be considered for comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the claim u/s 10A be recomputed on enhanced profits. We have already held , while deciding ground No. 1 of appeal filed by the revenue, that the assessee is eligible for claim u/s 10A of I.T. Act. Therefore we find no infirmity in the direction of the Ld. CIT(A) s direction to AO to recompute benefit u/s 10A of I.T. Act. Accordingly, we uphold the direction given by the Ld. CIT(A) and dismiss ground No. 2 of appeal filed by Revenue. 10. In the result, appeal filed by Revenue stands dismissed. CROSS OBJECTION NO.167/DEL/2014: 11. The issue raised by the assessee in its C.O. relates to allowability of deduction u/s 10A. Since we have already held, while deciding ground No. 1 of appeal filed by Revenue that the assessee is eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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