DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 8 1 (INCHARGE), HYDERABAD vs. VIRTUSA CONSULTING SERVICES PRIVATE LIMITED, TAMIL NADU

ITA 2632/CHNY/2024Status: DisposedITAT Chennai14 November 2025AY 2013-14Bench: SHRI MANU KUMAR GIRI (Judicial Member), SHRI S. R. RAGHUNATHA (Accountant Member)1 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the AO's arbitrary adjustment based on comparing profits without identifying specific arrangements between units was not tenable. The assessee's maintenance of unit-wise profit and loss accounts and submission of Form 56F supported this.

What were the facts?

The assessee claimed deduction under Section 10AA for its software development business. The Assessing Officer (AO) recomputed the deduction by applying an overall net profit ratio, disallowing a significant portion. The Commissioner of Income Tax (Appeals) deleted this disallowance.

What were the issues?

Whether the AO was justified in re-computing the deduction under Section 10AA by applying an overall net profit ratio to the exempt units' profits.

Which sections of the Income-tax Act were involved?

Section 10AA

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Cases cited in this judgment(9)Show list

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आयकर अपील"य अ"धकरण, ‘डी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI

"ी मनु कुमार "ग"र, "या"यक सद"य एवं "ी एस. आर. रघुनाथा, लेखा सद"य के सम$ BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER IT (TP) A No.:42/Chny/2024 & आयकर अपील सं./ ITA No.2262/Chny/2024 "नधा%रण वष% / Assessment Year: 2013-14 & 2012-13

Virtusa Consulting Services DCIT, Private Limited (formerly known vs. Corporate Circle 5(2), as Polaris Consulting & Chennai. Services Limited), No.34, IT Highway, Navallur, Chennai – 600 130. [PAN:AACCV-6797-L] (अपीलाथ'/Appellant) (()यथ'/Respondent)

आयकर अपील सं./ ITA Nos.2631 & 2632/Chny/2024 & "नधा%रण वष% / Assessment Years: 2012-13 & 2013-14 as Polaris Consulting & Services Limited), No.34, IT Highway, Navallur, Chennai – 600 130. [PAN:AACCV-6797-L] (अपीलाथ'/Appellant) (()यथ'/Respondent)

Assessee by : Shri. N. V. Balaji, Advocate Department by : Shri. A R V Sreenivasan, C.I.T.

सुनवाई क5 तार"ख/Date of Hearing : 15.10.2025 घोषणा क5 तार"ख/Date of Pronouncement : 14.11.2025

:-2-: IT(TP)A No. 42/Chny/2024

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