TMI Blog2016 (8) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... ON NO. 2147 of 2014 With SPECIAL CIVIL APPLICATION NO. 2148 of 2014 - - - Dated:- 8-8-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR B S SOPARKAR, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. These petitions arise in common background. The facts being almost identical, we may notice from Special Civil Application No.2147 of 2014. 2. The petitioner is a company registered under the Companies Act. It is engaged in the business of software services and related business. For the Assessment Year 2006- 07, the petitioner had filed a return of income on 31.10.2006 declaring total income of ₹ 61.28 lacs. Said return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s.10A of the Act, for the purpose of computing export turnover, telecommunication charges for export of computer software have not been considered as the same are fixed in nature and not incurred specifically for export of software. It is also seen from the assessment records that the telecommunication charges incurred by the assessee was ₹ 2,58,14,421/- and insurance charges incurred was ₹ 12,61,319/- totaling to ₹ 2,70,75,740/- which is required to be deducted from the Export turnover to compute deduction u/s.10A ibid. The deduction available accordingly will come to ₹ 70,55,08,217/- as shown below: Profit (Rs.71,16,11,73 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment Year 2008-09 which was also based on identical reasons recorded by the Assessing Officer. The assessee had challenged the said notice in SCA No.14571 of 2015 which came to be allowed by the High Court by a judgment dated 11.1.2016 in following terms: 4. It can be seen from the record that the Assessing Officer had two reasons for holding the belief that income chargeable to tax had escaped assessment. The first reason was that addition of ₹ 3.76 crore (rounded off) was made to the business income of the assessee applying arm's length pricing under section 92-C of the Act. In terms of sub-section (4) of section 92-C, this addition made by way of arm's length price would not qualify for deduction under section 10-A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel Ms.Bhatt opposed the petition contending that the Assessing Officer had recorded valid reasons. The assessee had not given break-ups of various expenditures and had thus not disclosed truly and fully all material facts. 8. With respect to the first reason, as noted, the Assessing Officer was of the opinion that the additions made during the course of the original assessment by applying arm's length price u/s.92-C of the Act would not qualify for deduction under section 10-A of the Act. Even if that be so, nowhere the Assessing Officer had recorded that excess deduction was granted to the petitioner due to failure on the part of the assessee to disclose truly and fully all necessary material facts, a prime requirement under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tention was drawn by counsel Mr.Soparkar for the petitioner to the return file by the assessee which contained detailed computation of exemption under section 10-A of the Act. It refers to the formula of exemption being equal to profit of business multiplied by export turn over divided by total turn over. A note to this computation contained the following disclosure: Note 1) For the purpose of computing export turnover, telecommunication charges for export of computer software have not been considered as telecommunication charges. The same are fixed in nature and not incurred specifically for export of software. However, in case such expenses are reduced for the purpose of export turnover, the same would also be required to be reduced fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had given written explanation. Any permission now to the Assessing Officer to re-examine the question would be allowing him to change the opinion originally framed. 12. For all these reasons, the impugned notice must be invalidated. The same is quashed. Petition is allowed and disposed of. 7. We may record that on all material aspects, these petitions involve identical issues. Not only the reasons recorded by the Assessing Officer were similar, in the present petitions also the impugned notices have been issued beyond the period of 4 years from the end of relevant assessment year. As is recorded in Para.11 of the above noted judgment dated 11.1.2016, even in the present cases the question of telecommunication expenses and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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