DCIT, HYDERABAD vs. M/S SEVEN HILLS BUSINESS SOLUTIONS PVT LTD., HYDERABAD

ITA 756/HYD/2010Status: DisposedITAT Hyderabad29 June 2018AY 2006-074 pages
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What did the Tribunal hold?

The Tribunal held that US branch sales and foreign travel expenses should be excluded from both export and total turnover, following a Supreme Court decision. It also held that TDS must be done irrespective of payment status, but the disallowance under Section 40(a)(ia) would be eligible for Section 10A exemption.

What were the facts?

The assessee claimed exemption under Section 10A for its software development business. The AO reduced export turnover by US branch sales and foreign travel expenses, and disallowed unremitted TDS under Section 40(a)(ia). The CIT(A) granted partial relief.

What were the issues?

Whether US branch sales and foreign travel expenses should be excluded from export and total turnover for Section 10A exemption, and whether unremitted TDS is disallowable under Section 40(a)(ia) and its impact on Section 10A exemption.

Which sections of the Income-tax Act were involved?

Section 10A,Section 40(a)(ia),Section 143(3),Section 200

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Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Smt. P. Madhavi Devi & Shri S.Rifaur Rahman

Hearing: 27.06.2018Pronounced: 29.06.2018

Per Smt. P. Madhavi Devi, J.M.

Both are cross appeals of the assessee as well as the Revenue for the A.Y 2006-07 against the order of the CIT (A), Guntur, dated 26.02.2010. 2. Brief facts of the case are that the assessee company, engaged in the business of “Software Development”, filed its return of income for the A.Y 2005-06 on 27.11.2006 declaring a ITA Nos 1414 and 756 of 2010 Seven Hills Business Solutions Ltd Hyderabad.

total income of Rs.2,69,837 after claiming exemption of Rs.30,36,34

The order continues below.

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