TMI Blog2017 (3) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany in USA, the assessee company could have shown the same and claimed exemption u/s 1OA of the Income Tax Act. Thus, any attempt by the assessee company to under-state its income by resorting to the practices mentioned above defies logic and common sense. CIT(A) has observed that during the course of appellate proceedings, it was revealed that a number of details submitted at the time of assessment proceedings were not acknowledged by the AO in his assessment order. These include note on expenses on travelling and expenditure on foreign training, copies of passports of Directors and some of the employees, addresses and e-mails ids of employees sent abroad, business work flow chart, etc. In addition during the course of appellate proceedings, the assessee submitted some more information which goes to establish the fact that the employees had gone on training rather than for rendering services abroad. This includes a note on the nature of training given, sample copy of training letters of employees selected for training, copy of passport and visa of the employees etc. Assessee also gave necessary documents to substantiate the fact that it is eligible for exemption u/s 1OA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AICT, Circle-I, Gurgaon on 25.8.2010 and thereafter the case was assigned to CIT, Faridabad, who issued the notices u/s. 143(2) 142(1) of the I.T. Act to the assessee. In response to the same, assessee s A.R. attended the proceedings on behalf of the assessee company from time to time and filed the information. Thereafter the income of the assessee was assessed at ₹ 36,13,060/- vide his order dated 16.12.2011 passed u/s. 143(3) of the I.T. Act, 1961, by making the addition of ₹ 34,26,566/- due to the reason that the assessee company s personnel instead of undergoing training in the parent company s office, M/s Platformone Inc. USA, were rendering services to it. After holding this, the AO calculated the remuneration of its employees considering number of week days they were at the premises of the parent company. 3. Aggrieved with the assessment order, assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order dated 26.11.2014 has deleted the addition and allowed the appeal of the assessee. 4. Now the Revenue is aggrieved against the impugned order and filed the present appeal before the Tribunal. 5. At the time of hearing Ld. DR relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify for exemption u/s 1OA. In order to substantiate the fact that the said services qualify for exemption u/s 1OA of the Income tax Act, the appellant enclosed Notification No. 890E dated 26.09.2000 issued by the CBDT, as per which Human Resources Services under Information Technology Enabled Products are eligible for the said exemption. Hence these facts make it clear that the appellant was entitled to exemption under section 1OA of the Act. Once it is established that the appellant company was entitled to exemption u/s 1OA of the Income Tax Act, there is very little force left in the AO's position that the appellant company had concealed income derived by its employees on their visit to USA. If the employees had earned any Income during their visit to the holding company in USA, the appellant company could have shown the same and claimed exemption u/s 1OA of the Income Tax Act. Thus, any attempt by the appellant company to under-state its income by resorting to the practices mentioned above defies logic and common sense. II. The AO made the addition in view of the fact that full details were not submitted by the appellant during the course of assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A), as aforesaid, I find that the assessee company was a registered unit of Software Technology Park of India and had been providing human resources related to ITES services to its holding company in the US and claiming exemption u/s 1OA of the Act. In support of its entitlement to exemption u/s 1OA of the Income Tax Act, the assessee submitted a copy of its registration at the assessment as well as appellate stage. Furthermore the assessee company pointed out that the AO erred in holding that the income derived from supply of manpower will not qualify for exemption u/s 1OA. In order to substantiate the fact that the said services qualify for exemption u/s 1OA of the Income tax Act, the assessee enclosed Notification No. 890E dated 26.09.2000 issued by the CBDT, as per which Human Resources Services under Information Technology Enabled Products are eligible for the said exemption. Hence these facts make it clear that the assessee was entitled to exemption under section 1OA of the Act. It is also established that the assessee company was entitled to exemption u/s 1OA of the Income Tax Act, there is very little force left in the AO's position that the assessee company had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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