Loading judgment…
Facts
Cross-appeals were filed by the assessee and the Revenue against orders of CIT(A) for Assessment Years (AYs) 2007-08, 2009-10, and 2010-11. The assessee's AR submitted that the issues were identical to those heard in the assessee's own case for AY 2008-09, and thus the decision in that case should be followed.
Held
The Tribunal decided to follow its previous decision in the assessee's own case for AY 2008-09, as the issues and circumstances were identical. An additional ground raised by the assessee challenging the validity of the assessment order for AY 2007-08 was dismissed as withdrawn.
Key Issues
The appeals involved common issues, including deduction u/s 10A, disallowance u/s 14A, retention of revenue by overseas subsidiaries, benefit of +/-5% variation on ALP, notional interest on delayed receivables, and interest charged on loans and undercharged on loans and capital contributions to AEs.
Sections Cited
10A, 14A, 153, 155(11A), 144C, 92C(2)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SMT. BEENA PILLAI & SHRI GIRISH AGRAWAL
The date of order of Ld.CIT(A) against which the cross-appeal are filed, are as follows:-
Assessment Year Order of Ld. CIT(A) Dated 2007-08 19/12/2017 2009-10 14/03/2019 2010-11 07/05/2019
Since common issues are involved in these appeals, they were heard together and are being disposed of by this consolidated order for the sake of convenience and brevity.
At the outset, Ld. AR submitted that the issues involved in the present appeals are identical to those already heard by this by this Tribunal in the assessee’s own case for A.Y. 2008-09 in heard on 27/01/2026. He submitted that the facts and circumstances remain unchanged and no fresh material has been brought on record by the Revenue to warrant a different view. The Ld. AR therefore contended that, in the interest of judicial consistency, the decision of the Tribunal for A.Y. 2008- 09 may be followed and the issues raised in the present appeals be decided accordingly.
The assessee was thus directed to file chart for each year highlighting the issues raised in the grounds.
Accordingly, following charts summarising the Grounds issue wise raised by the assesse as well as revenue for each Assessment Years are filed which is reproduced as under:-
A.Y. 2007– Appeal) Ground No. Issue 1 General ground – Order bad in law Disallowance u/s 14A – Not pressed due to smallness of 2 amount
Retention of revenue by overseas subsidiaries in Singapore & 3 Netherlands 4 Benefit of +/-5% variation computed on Arm’s Length Price 5 Reliance on Shelf Drilling Ron Tapmeyer Ltd. vs ACIT – (Additional) Withdrawn (Department Appeal) Ground Issue No. Loss of units eligible u/s 10A to be set off against profits of 1 eligible units Telecommunication expenses to be reduced from export turnover 2 while computing deduction u/s 10A Retention of revenue by overseas subsidiaries in Singapore & 3–13 Netherlands Ground Issue No. 14 Notional interest receivable on delayed receivables 15 Interest undercharged in respect of loan to AEs
16 & 17 General ground A.Y. 2009- Appeal) Ground Issue No.
1 General ground – Order bad in law
Disallowance u/s 14A in respect of exempt interest income – Not 2 pressed due to smallness of amount Retention of revenue by overseas subsidiaries in Singapore and 3 Netherlands 4 Benefit of +/-5% variation computed on Arm’s Length Price (Department Appeal) Ground Issue No. Deduction of training income while computing deduction u/s 1 10A
Telecommunication expenses to be reduced from export turnover 2 while computing deduction u/s 10A CIT(A) not empowered to direct AO to pass rectification order 3 u/s 155(11A) 4 CIT(A) erred in directing AO to grant additional TDS credit Ground Issue No. Retention of revenue by overseas subsidiaries in Singapore & 5 Netherlands 6 Notional interest receivable on delayed receivables 7 Interest undercharged in respect of loan to AEs 8 Interest charged on capital contribution treated as loan 9 Customization fees paid to AEs
10 & 11 General ground A.Y. 2010– Appeal) Ground Issue No.
1 General ground – Order bad in law Retention of revenue by overseas subsidiaries in Singapore and 2 Netherlands 3 Benefit of +/-5% variation computed on Arm’s Length Price (Department Appeal) Ground Issue No. Deduction of training income while computing deduction u/s 1 10A
Telecommunication expenses to be reduced from export turnover 2 while computing deduction u/s 10A
Retention of revenue by overseas subsidiaries in Singapore & 3 Netherlands
Ground Issue No. 4 Notional interest receivable on delayed receivables 5 Interest undercharged in respect of loan to AEs 6 Interest charged on capital contribution treated as loan 7 & 8 General ground The Ld.AR also submitted that additional ground raised challenging validity of the final assessment order being passed beyond the period of limitation stands withdrawn vide letter dated 10/02/2026. The same is scanned and reproduced as under:
Accordingly, additional ground raised in assessment year 2007-08 stands dismissed.
3.1. The Ld.DR fairly conceded that the issues arising in the present appeals are identical to those heard by the Tribunal in A.Y. 2008-09(supra) on 27/01/2026. He submitted that all appeals may therefore be decided in accordance with the decision of the Tribunal for A.Y. 2008-09(supra).
We have heard the submissions advanced by both sides and in light of the material placed on record.
At the time of hearing, both the Ld. AR and the Ld. DR fairly submitted that the issues arising in the present cross appeals are identical to the appeal in assessee’s own case for A.Y. 2008–09 (supra) heard by this Tribunal on 27/01/2026, and that the decision rendered therein would apply mutatis mutandis to the years under consideration.
4.1. We find that this Tribunal, vide order dated 19.02.2026, has examined the identical issues in the assessee’s own case for A.Y. 2008–09 in considerable detail. After taking into account the submissions advanced by both sides, the findings of fact recorded and the view taken therein are respectfully followed and applied mutatis mutandis to the assessment years under consideration.
4.2. For the sake of brevity and to avoid repetition, we do not consider it necessary to reproduce the entire discussion on each issue. We shall instead refer to the relevant paragraphs of the order dated 19.02.2026 wherein all the common issues arising in the present appeals have been examined and adjudicated. The relevant paragraph references are set out hereinbelow:
S.No. Factual Conclusion Issue discussion in in Paras paras 1. Discussion in Deduction u/s 10A – inclusion of para 10.1 to 11.4 training income 11.3 2. Deduction u/s 10A – Discussion in telecommunication expenses 11.5 para 11.5 exclusion from export turnover 3. Computation aspects of deduction u/s 10A (export vs total turnover Para 11.6 11.6 parity) 4. Retention of revenue by overseas subsidiaries (Singapore & Discussion in Netherlands) Para 8.1 to 8.8 5. Selection of tested party & TP 9.4 benchmarking approach 6. Benefit of ±5% tolerance range u/s Discussion in 9.6 92C(2) para 9.5 7. Discussion in Notional interest on delayed para 12.1 to 15 to 15.1 receivables from AEs 14.5 8. Interest charged in respect of Loan Discussion in 19 to 19.4. to AE para 16 to18.2.
Interest on capital contribution Discussion in 22 to 22.4 treated as loan para 20 to 21.12 10. Customization / marketing support Discussion in 26 to 26.2 fees paid to AEs para 23.1 to 25 11. Disallowance u/s 14A Discussed in 7 Para 7 12. General grounds Paras 6 and 27 Paras 6 & 27 We have already tabulated hereinabove the issues which stand covered by the decision of the Coordinate Bench of this Tribunal in the assessee’s own case for A.Y. 2008–09 (supra), vide order dated 19.02.2026, which is annexed to the present order and marked as “Annexure – A”. For the sake of convenience and brevity, the relevant paragraphs of the said decision, dealing with the identical issues arising in the years under consideration, have been referred to in the table set out above.
Accordingly, in the absence of any distinguishing facts having been brought on record by either side, the findings of fact and the conclusions recorded by the Coordinate Bench in A.Y. 2008–09 (supra) are respectfully followed and applied mutatis mutandis to the grounds raised by both the assessee and the Revenue on the common issues for the years under consideration.
In the result assesse appeal stands allowed and revenue appeal stands partly allowed as indicated herein above.
Order pronounced in the open court on 20/02/2026
Sd/- Sd/-
(GIRISH AGRAWAL) (BEENA PILLAI) Accountant Member Judicial Member Mumbai Dated: 20/02/2026 SC Sr. P.S.
Copy of the order forwarded to:
(1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T.