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Income Tax Appellate Tribunal, DELHI BENCH “C”: NEW DELHI
Before: SHRI AMIT SHUKLA & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M.
This appeal is filed by the learned DEPUTY COMMISSIONER OF INCOME TAX, Circle – 12 (2), New Delhi (the learned assessing officer/AO) against the order of the COMMISSIONER OF INCOME TAX (APPEALS) – 4, New Delhi dated 31st of August 2017 for assessment year 2012 – 13 raising following grounds of appeal:- i. On the facts and circumstances of the case and in law, the learned CIT – A has erred in allowing the claim of ₹ 482,271,669/– towards deduction u/s 10 AA of the income tax act of though assessee was not entitled to such claim. ii. The learned CIT – A has erred in not examining the fact whether or not the assessee said to be engaged in the business of software export to be eligible for deduction u/s 10 AA of the income tax act, 1961.
2. The assessee company is engaged in the business of software development and providing information technology enabled services in the special economic zone unit approved Under SEZs scheme for data processing services.
3. The assessee filed its return of income on 26/9/2012 showing the total income of ₹ 483,657,670. The assessee also declared book profit u/s 115JB of ₹ 893,358,475/–. The assessee’s claim of exemption u/s 10 AA of ₹ 482,271,669 was examined by the learned assessing officer wherein assessee claims that it is engaged in the field of export of data processing services and thus it is in the 6th year of claim u/s 10 AA.
4. The claim of the assessee was already disallowed in assessment year 2007 – 08, 2008 – 09, 2009 – 10, 2000 – 11 and 2011 –
12. The reason for disallowance is the original assessment order passed in these years. The learned assessing officer noted that the facts stated in that year is also applicable for this year too. The learned assessing officer noted that assessee is just earning a commission from a foreign company and such commission has been given the colour of exports being provided from an assessee SEZ unit so as to claim 100% deduction of the profits u/s 10 AA of the. Therefore according to him as the assessee company did not fulfill the criteria for claim of exemption u/s 10 AA, the same was denied to the assessee company as in the last assessment orders. The assessee was asked to show cause why the same should not be followed.
The assessee submitted that assessee is engaged in the similar kind of software development and providing information technology enabled services namely data processing and its exports from its SEZs unit located at Noida. Assessee Company continues to provide service to Galileo Netherland BV. The assessee company has also submitted that it fulfils all the conditions laid down u/s 10 AA of the act and it is also been granted approval by The Development Commissioner, Noida Special Economic Zone and the entire consideration towards the export of services been realized in foreign currency and the claim of deduction u/s 10 AA has also certified by the report in form number 56F.
The learned assessing officer after considering the submission of the assessee, in view of the assessment order passed in the earlier years, disallowed the deduction u/s 10 AA of the act of ₹ 482,271,669/– and passed an assessment order assessing the total income of the assessee at ₹ 965,929,338/– against the returned income at ₹ 483,657,669 u/s 143 (3) of the act on 25th of March 2015.
The assessee is aggrieved with that order and preferred appeal before the learned CIT – A. The learned CIT – A followed the decision of the coordinate bench wherein the identical addition made in the hence of the assessee for assessment year 2007 – 08 to 2000 – 11 was deleted. The learned CIT – A further noted in paragraph number 7.3 of his order that the order of the coordinate bench has also been upheld by the honourable High Court in case of the assessee in ITA number 330/2017 for assessment year 2000 – 11 dated 22 May 2017. Therefore, based on these orders, the learned and CIT – A directed the learned assessing officer to delete the disallowance u/s