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Income Tax Appellate Tribunal, “E” Bench, Mumbai
Before: Shri B.R. Baskaran (AM) & Shri Pawan Singh (JM)
O R D E R Per B.R. Baskaran (AM) :
The appeal of the revenue and the cross objection filed by the assessee are directed against the order passed by Ld CIT(A)-16, Mumbai and they relate to the assessment year 2010-11. The issue urged in the appeals of both the parties relate to the deduction claimed by the assessee u/s 10A of the Act.
None appeared on behalf of the assessee even though the appeals were adjourned on the earlier occasions at the specific request of the assessee.
2 E-Hub Corporate Services Pvt. Ltd.
Hence we proceed to dispose of the appeal ex-parte, without the presence of the assessee.
We heard Ld D.R and perused the record. The assessee claimed deduction u/s 10B of the Act on the ground that it is registered under Software Technology Park of India (STPI). The AO noticed that the registration as STPI was granted to the assessee for a period of three years only, vide permission letter dated 27.08.2004. Hence the AO called for information about details of registration granted to the assessee by sending notice to STPI, which responded that the registration is valid for five years from the date of commencement of activities. The AO noticed that the registration has expired on 11.05.2009, i.e., during the beginning of the year under consideration. In the absence of registration as STPI, the AO rejected the deduction claimed by the assessee u/s 10B of the Act. The Ld CIT(A) also confirmed the same. However, the Ld CIT(A) also held that the brought forward losses should not be deducted from the current year’s profit for the purpose of computing deduction u/s 10B of the Act.
The assessee is aggrieved by the decision of Ld CIT(A) in confirming the rejection of the claim made u/s 10B of the Act. The revenue is aggrieved by the decision of Ld CIT(A) in holding that brought forward losses should not be deducted from the current year’s profit for computing deduction u/s 10B of the Act.
We heard the parties and perused the record. We notice that the assessee has claimed before the AO that it has been deregistered as STPI only in the year 2012. When the Ld CIT(A) asked the assessee to prove that the registration was available for the year under consideration, the assessee wrote a letter to STPI. However, in the reply, the STPI has not mentioned that the registration to the assessee was available during the year under consideration. Hence the Ld CIT(A) noticed that the assessee has failed to show that the registration as STPI was available to the assessee to the year under 3 E-Hub Corporate Services Pvt. Ltd.
consideration. Accordingly he confirmed the disallowance of claim made u/s 10B of the Act.
Before us, no material was placed to contradict the finding given by Ld CIT(A). Accordingly we confirm the order passed by Ld CIT(A) on this issue.
With regard to the appeal filed by the revenue, we notice that the AO has not discussed anything about the manner of computation of deduction. In fact, there was no occasion for the AO to discuss the same, since he has fully rejected the claim of the assessee. Hence we are of the view that the observations of the Ld CIT(A) that brought forward losses should not be deducted from the current year’s profit for computing deduction u/s 10B of the Act are not relevant to the issue under consideration. Accordingly we set aside the same.
In the result, the appeal of the revenue is allowed and the Cross objection filed by the assessee is dismissed.
Order has been pronounced in the Court on 4.6.2018.