TMI Blog2018 (1) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... Deduction claimed u/s. 80IB(8A) - Held that:- In the light of the decision of the ITAT in assessee’s own case for earlier years, which the Ld.CIT(A) has followed, we do not see any reason to differ from the order of the CIT(A). It is true that ITAT has stated that the claim has to be examined in each of the years and left a note of caution that the view taken therein may not apply to subsequent years, if there are change of facts. However, as seen from the approval granted, there are no change of facts and assessee is found to be eligible for deduction u/s. 80IB. In view of that, as the issue is squarely covered by the earlier decision, we uphold the order of CIT(A) and dismiss the Revenue grounds Deduction towards ESOP - Held that:- Issue of allowability of ESOP expenses on the date of exercising of option by the assessee was held to be an ascertained liability and not contingent liability by the Special Bench of Bangalore Tribunal in Biocon Ltd. Vs. DCIT (2013 (8) TMI 629 - ITAT BANGALORE). The Special Bench held the said discount on ESOP was to be allowed as deduction under section 37(1) of the Act, during the years of vesting on the basis of percentage of vesting during suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted were indeed for research services as stated in the certificate. Since the invoices are required to be examined, the issue of deduction u/s. 10A is restored to the file of AO to examine afresh and allow the claim, if assessee satisfies the provisions of Section 10A - ITA No. 705, 706, 707, 738, 739, 740/Hyd/15 - - - Dated:- 1-1-2018 - Shri D. Manmohan, Vice President And Shri B. Ramakotaiah, Accountant Member For Assessee : Shri V. Siva Kumar, AR For Revenue : Shri K. Ashok Kumar, DR ORDER Per Bench These are cross-appeals by Assessee and Revenue for the AYs. 2009-10, 2010-11 2011-12 against the orders of the Commissioner of Income Tax (Appeals)-2, Hyderabad, dated 23-03- 2015. Since common issues are involved in all these appeals, these are heard together and decided by this common order. 2. Briefly stated, assessee is a company engaged in the business of Bio-Informatics, Contract Research Services etc. In the years under consideration, assessee has claimed deduction u/s. 10A of the Income Tax Act [Act] and also u/s. 80IB on some of the units, but offered income u/s. 115JB of the Act as well. In the scrutiny assessments completed, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er. 0.5% thereon at ₹ 7,08,664/- was not correctly worked out. Therefore, without going into merits of the addition, we accept the Revenue s ground and restore the issue of entire disallowance u/s. 14A to the file of AO to be considered afresh, after giving due opportunity to assessee. The grounds are considered allowed for statistical purposes. Deduction claimed u/s. 80IB(8A): 5. Assessee has claimed deduction u/s. 80IB in various years and AO denied the deduction claimed by assessee. AO was of the view that the work carried out by assessee was in the nature of job work/service and it cannot be termed as Scientific Research and Development . AO was of the view that assessee did not fulfil the conditions laid down in Rule 18DA of IT Rules. Accordingly, AO disallowed the deduction claimed in all the impugned three assessment years. In appeal, Ld.CIT(A) allowed assessee s claim following the decision of ITAT in assessee s own case vide order in ITA No. 1276/Hyd/2010 dt. 02-08-2013 for AY. 2006-07 and also order in ITA No. 1053/Hyd/2013 dt. 06-02-2014 for the AY. 2008- 09. Revenue is aggrieved. 6. It was submitted that the approval granted to assessee while allowing de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Biocon Ltd., Vs. DCIT (supra) which is binding on the authorities. The grounds of Revenue are accordingly dismissed. Disallowance of communication charges while computing deduction u/s. 10A: 11. This issue arises in AY. 2009-10 in assessee s appeal. Assessee furnished Form 56F and claimed deduction u/s. 10A on two of the units. AO noticing that there may be internet charges attributable to delivery of article/thing outside India, disallowed the claim of communication charges. (Bio-informatics Division, Balanagar, Hyderabad at ₹ 1,18,877/- an amount of ₹ 11,082/- in Informatics Division, Chennai.) Aggrieved by the disallowance made u/s. 10A, assessee preferred an appeal before the Ld.CIT(A) and relied on various case law including the definition of Export Turnover and Total Turnover based on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Lakshmi Machine Works Ltd., [290 ITR 667] (SC). Ld.CIT(A), however, Ld. CIT(A) did not agree stating that the claim does not hold water. 12. After considering the rival contentions, we are of the opinion that this issue is covered by the decision of ITAT in the case of Patni Telecom Solution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has claimed deductions u/s. 10A which was allowed in earlier years but in these two years, AO took a different stand. 15. Ld.DR, however, relied on the orders of the AO and CIT(A) on this issue. 16. We have considered the rival contentions and perused the submissions on this issue. The claim u/s. 10A on the similar facts was allowed by the AO in the assessments made u/s. 143(3) for AYs. 2005-06, 2006-07 and 2008-09. Similar computation of income and copies of report in Form 56F were filed by assessee. Even in AY. 2009-10, which is also in appeal before us, the claim was allowed. Therefore prima-facie the claim of deduction u/s. 10A is allowable. However, the AO made out a new case that the remittances were for research services . The FIRC issued by the bank cannot be taken as a conclusive evidence, unless supported by actual research for which remittances are made. This aspect has not been examined by the AO at all. Moreover, the detailed explanation made before the CIT(A) has not been examined by the CIT(A). He has summarily rejected assessee s contentions stating that it does not hold water . We are of the opinion that this issue requires re-examination by the AO bas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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