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Income Tax Appellate Tribunal, “A’’ BENCH: BANGALORE
Before: SHRI B. R. BASKARAN & SMT. BEENA PILLAI
PER B.R. BASKARAN, ACCOUNTANT MEMBER:
The assessee has filed this appeal challenging the order dated 21-03-2018 passed by Ld CIT(A)-6, Bengaluru and it relates to the assessment year 2008-09.
The grounds of appeal urged by the assessee reads as under:- 1. “That the order of the learned Commissioner of Income Tax (Appeals) in so far it is prejudicial to the interests of the appellant, is bad and erroneous in law and against the facts and circumstances of the case.
M/s. Centum Electronics Ltd., Bengaluru
Page 2 of 5 2. That the learned Commissioner of Income Tax (Appeals) ought to have held that the freight, travelling, sub-contracting charges and Bank charges cannot be excluded from the export turnover for arriving at exemption u/s. 10B of the Act since they are neither incurred for delivery of articles, things or computer software nor incurred in foreign currency.
3. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in holding that the additional claim of the appellant is not allowable just because a revised return was not filed or the assessment order does not mention the facts of additional claim.
4. That the learned Commissioner of Income Tax (Appeals) ought to have allowed the additional claim made by the appellant in respect of depreciation.
4.1.That the learned Commissioner of Income Tax (Appeals) ought to have allowed the additional claim made by the appellant in respect of wrong disallowance u/s. 40(a)(ia).
4.2.That the learned Commissioner of Income Tax (Appeals) ought to have allowed the additional claim made by the appellant in respect of extension of deduction u/s. 10B.
4.3.That the learned Commissioner of Income Tax (Appeals) ought to have allowed the additional claim made by the appellant in respect of Excess credit of TDS during the assessment proceedings”
The Ld A.R submitted that the assessee is an 100% EOU and is eligible for deduction u/s 10B of the Income-tax Act,1961 ['the Act' for short].
The Ld A.R submitted that Ground No.1 is general in nature. He submitted that Ground No.2 relates to the deduction allowed u/s 10B of the Act. The Ld A.R submitted that assessee claimed deduction u/s 10B of the Act in its return of income. The AO, however, reduced expenses incurred by the assessee under the heads “Freight, travelling, sub-contracting charges and Bank charges” from the amount of “Export turnover”, while computing deduction u/s 10B of the Act. Accordingly, the quantum of deduction came to be reduced by the AO. Before Ld CIT(A), the assessee took the main plea
M/s. Centum Electronics Ltd., Bengaluru
Page 3 of 5 that the above said expenses are not required to be reduced from the amount of “Export turnover”, while computing deduction u/s 10B of the Act. Alternatively, the assessee also took a plea that the amounts so reduced from “Export turnover” should also be reduced from the “total turnover”, while computing deduction u/s 10B of the Act.
The Ld A.R submitted that the Ld CIT(A) did not adjudicate the main contention of the assessee, i.e., the impugned amounts should not be reduced from Export turnover at all. However, the Ld CIT(A) allowed the alternative plea of the assessee and accordingly directed the AO to reduce the impugned amounts from Total turnover also, while computing deduction u/s 10B of the Act.
The Ld A.R submitted that the assessee would get further relief, if its main contention is accepted. He submitted that the same requires verification of certain factual aspects and accordingly prayed that this issue may be restored to the file of the AO, even though it was not adjudicated by Ld CIT(A). He further submitted that the claim of the assessee is supported by the decisions rendered by Hon’ble Karnataka High Court, which are reported in 382 ITR 654; 427 ITR 338 and 428 ITR 245.
With regard to grounds 3 to 4.3, the Ld A.R submitted that the assessee has raised certain addition claims before the AO by furnishing a letter dated 01-12-2010. He submitted that a copy of the above said letter is placed at pages12-13 of the paper book. He submitted that the additional claims put forth by the assessee before AO consisted of (a) Revision of amount of depreciation claimed (b) Wrong disallowance made u/s 40(a)(ia) of the Act (c) Error in computation of deduction u/s 10B of the Act (d) Claim for TDS credit.
M/s. Centum Electronics Ltd., Bengaluru
Page 4 of 5 The Ld A.R submitted that the AO did not consider all these additional claims made by the assessee. The Ld CIT(A) rejected the grounds relating to the above said claims by stating that the assessee did not make these claims by filing revised return of income. The Ld A.R submitted that the assessee has put forth these claims before the AO during the course of assessment proceedings itself. He further submitted that the Tribunal has power to admit additional grounds even without filing of revised return of income by the assessee. In support of this proposition, he placed his reliance on the decision rendered by the co-ordinate bench in the case of TRC Engineering India (P) Ltd (ITA 499/Bang/2020 dated 11.11.2020) (84 ITR (Trib) 40). Accordingly he submitted that the AO may kindly be directed to consider the additional claims cited above.
We heard Ld D.R and perused the record. We notice that the Ld CIT(A) did not adjudicate main contention of the assessee with regard to exclusion of certain items from the amount of Export turnover, while computing deduction u/s 10B of the Act. It is the submission of the assessee that the said contention of the assessee requires verification of certain facts and accordingly it is prayed that this issue may be restored to the file of the AO. With regard to the additional claims put forth before the AO, we notice that the Ld CIT(A) rejected the same on the plea that the assessee did not make these additional claims by filing revised return of income. Even though the Hon’ble Supreme Court has held in the case of Goetz India Ltd (284 ITR 323) that the assessee could make additional claims only by filing revised return of income, yet the Hon’ble Supreme Court has held that its order does not impinge the power of the ITAT to admit additional claims. Since the assessee has put forth these additional claims before the AO through its letter referred above, we are of the view that these additional claims require examination for arriving
M/s. Centum Electronics Ltd., Bengaluru
Page 5 of 5 correct amount of total income. Accordingly, we admit these additional claims.
We are of the view that all the above said issues require examination at the end of the AO. Accordingly, we restore all of them to the file of the AO for examining them in accordance with law, after affording adequate opportunity of being heard to the assessee.
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open court on 28th Dec, 2020