CIT vs. ST MICRO ELECTRONICS PVT LTD

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ITA - 791 / 2010HC Delhi06 July 20101 pages
For Petitioner: SURUCHII AGGARWAL
AI SummaryRemanded

What did the High Court hold?

The High Court admitted the appeal on the substantial question of law presented. The question framed by the Court asks whether the ITAT erred in allowing the assessee's appeal against the CIT(A)'s order. The CIT(A) had directed the AO to re-compute the deduction under Section 10B by excluding Rs. 44,73,400, which was a 10% mark-up on a liability offered as profit from software export. The High Court's order indicates that the ITAT's decision to allow the assessee's appeal, thereby permitting the exclusion of this mark-up from the deduction calculation, is under scrutiny. The judgment does not record the ITAT's reasoning or the specific findings of the High Court on the merits of the substantial question of law. The operative direction is the admission of the appeal for further hearing.

What were the facts?

The Revenue (CIT) filed an appeal under Section 260A of the Income Tax Act, 1961, against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had allowed the appeal of the assessee, ST Micro Electronics Pvt Ltd, against an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) had directed the Assessing Officer (AO) to re-compute the deduction under Section 10B of the Income Tax Act. The dispute pertains to the exclusion of Rs. 44,73,400, which represented a 10% mark-up on a liability offered as profit and gains of the business from the export of software, from the computation of the deduction.

What were the issues?

1. Whether the ITAT erred in allowing the assessee's appeal against the CIT(A)'s order, which directed the AO to re-compute the deduction under Section 10B by excluding Rs. 44,73,400 (10% mark-up on liability offered as profit from software export)? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the ITAT had erred in allowing the assessee's appeal. Specifically, they contended that the ITAT should not have allowed the deduction under Section 10B by excluding the amount of Rs. 44,73,400, which represented a 10% mark-up on a liability that was offered as profit and gains of the business from the export of software. The Revenue's argument is implicitly that this mark-up should have been included in the computation, thereby reducing the eligible deduction.

Which sections of the Income-tax Act were involved?

Section 10B,Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 791/2010 . CIT ..... Appellant Through Ms. Suruchii Aggarwal with Anish K.V., Advocates versus . ST MICRO ELECTRONICS PVT LTD ..... Respondent Through None . CORAM: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE MANMOHAN . O R D E R 06.07.2010 . CM 11472/2010 Allowed, subject to all just exceptions. ITA 791/2010 The present appeal preferred under Section 260A of Income Tax Act, 1961 is admitted on the following substantial question of law:- . ITA 791/2010 Page 1 of 2 . . . i) Whether ITAT has not erred in allowing the appeal of the assessee against the order of the CIT(A) in directing the AO to re-compute the deduction u/s 10B by excluding the amount of Rs. 44,73,400/- being 10% mark up on the liability which has been offered as the profit and gains of the business of the assessee from the export of software? . CHIEF JUSTICE . . MANMOHAN, J JULY 06, 2010 rn . . . . . . . . . . . . . . . . . . . . . . ITA 791/2010 Page 2 of 2 . #36 $

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