INCOME TAX OFFICER 41(3)(1), MUMBAI, MUMBAI vs. AJJAY AGARWAL (HUF), MUMBAI

ITA 4295/MUM/2023Status: DisposedITAT Mumbai14 June 2024AY 2011-2012Bench: SHRI ANIKESH BANERJEE (Judicial Member), SHRI GAGAN GOYAL (Accountant Member)1 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the issue of abnormally high profits and the validity of the Section 10A deduction required thorough investigation. Therefore, the matter was remitted back to the AO for a fresh examination, ensuring the assessee is given a proper opportunity to present its case.

What were the facts?

The assessee, an HUF, claimed a deduction of Rs. 57.21 crores under Section 10A for its software development and export business, which represented an abnormally high profit margin of 97.8%. The Assessing Officer (AO) disallowed this deduction, but the CIT(A) restored it. The Revenue appealed this decision.

What were the issues?

Whether the abnormally high profit margin claimed by the assessee for software export justifies the disallowance of Section 10A deduction, and if the CIT(A) erred in deleting the disallowance without proper verification.

Which sections of the Income-tax Act were involved?

Section 10A,Section 143(3),Section 250

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, MUMBAI BENCH “A”, MUMBAI

Before: SHRI ANIKESH BANERJEE & SHRI GAGAN GOYAL

For Appellant: Dr. K. Shivaram
For Respondent: Shri Ajay Chandra, CIT, DR
Hearing: 09/05/2024Pronounced: 14/06/2024

PER ANIKESH BANERJEE, J.M:

Instant appeal of the Revenue was filed against the order of the Ld. National Faceless Appeal Centre, Delhi *in short, ‘Ld.CIT(A)’+, date of order 29/09/2023 for A.Y. 2011-12 order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’;).The impugned order was emanated from the order of the Ld. Income Tax Officer-30(1)(1), Mumbai (in short, ‘the A.O.’) passed under section 143(3) r.w.s. 254 of the Act date of order 30/12/2019. 2 Ajay R. Agrawal

2.

The department has taken the following grounds of appeal:-

“1. On the facts and circumstances of the case and in la

The order continues below.

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