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Income Tax Appellate Tribunal, “C” BENCH, MUMBAI
Before: SHRI R. C. SHARMA & SHRI AMARJIT SINGH
सुनवाई की तायीख / : 17.8.2016 Date of Hearing घोषणा की तायीख / : 28.09 .2016 Date of Pronouncement आदेश / O R D E R Per R. C. Sharma, A. M.: This is an appeal filed by the Revenue against the order by the ld. CIT(A)-22, Mumbai dated 21.10.2014 for the assessment year (A.Y.) 2009-10.
We have considered the rival contentions and found that ground no. 1 raised by the Revenue is incorrect insofar as the CIT(A) has not adjudicated the same. The ld. DR and ld. AR fairly conceded that the matter with regard to the computing (A.Y. 2009-10) Asst. CIT vs. Caliber Point Business Solutions Ltd. disallowance u/s. 14A while computing book profit u/s. 115JB, be restored back to the file of the CIT(A) for deciding afresh.
With regard to the assessee’s claim of deduction u/s. 10A, the ld. CIT(A) held that the assessee is engaged in software development activity outsourced to the parent company was eligible for deduction u/s.10A if the same was located in STPI area. In this regard, we find that the assessee company claimed deduction u/s. 10A of the Act in respect of income arising from such outsourced work to its parent company. The Assessing Officer disallowed the claim of deduction u/s. 10A of the Act on the ground that the said income was not derived from the industrial undertaking.
The CIT(A) following the order of the Hon’ble Tribunal for A.Y. 2008-09 directed the Assessing Officer to verify the fact whether the outsourced work was done by a unit located in STPI, and if the said fact is established then the Assessing Officer should grant deduction u/s.10A of the Act. We find that the issue has been considered in assessee’s own case for A.Y. 2008-09 being order dated 13.2.2013 wherein the Hon’ble Tribunal has held that he assessee is eligible for deduction u/s.10A of the Act on the work outsourced to other company provided the said company is also located in STPI unit. Accordingly we do not find any infirmity in the directions so issued by CIT(A).
In the result, ground no. 2 taken by the Revenue is dismissed.
In ground no. 3, the Revenue is aggrieved for allowing claim of expenses not made in the return of income.
We have considered the rival contentions and found that during the course of assessment proceedings for A.Y.2008-09 the assessee claimed deduction of expenses and the AO disallowed the same u/s.40(a)(ia) by observing that same is allowable on payment basis. We found that the said expenditure was disallowed in A.Y. 2008-09, by the Assessing Officer and confirmed by CIT(A). However, during the year under consideration, TDS has been deducted and paid on the said expenses. The Assessing Officer held that the assessee had not proved that taxes were paid in the current year.
(A.Y. 2009-10) Asst. CIT vs. Caliber Point Business Solutions Ltd. He held that as per the decision of the Hon’ble Supreme Court in the case of Goetze India Ltd. (284 ITR 323) claim made other than by filing revised return of income cannot be admitted.
By the impugned order the CIT(A), after verifying the fact that TDS was deducted and paid on the expenses claimed as deduction, held that the assessee company is eligible to claim deduction of the said expenses even though the same was not claimed in return of income.
We do not find any infirmity in the order of the CIT(A). In view of the decision of the Hon’ble Bombay High Court in case of M/s. Pruthvi Brokers and Shareholders Pvt. Ltd. (349 ITR 336) wherein it was held that the appellate authorities have the power to admit the additional claim made by assessee even though the same has not been made in return of income. It was also held that the decision of the Hon’ble Supreme Court in case of Goetze India Ltd. (284 ITR 323) applies only to Assessing Officer and not the appellate authorities.
In view of the above, the CIT(A) has rightly followed the decision of the Hon’ble Bombay High Court in case of M/s. Pruthvi Brokers and Shareholders Pvt. Ltd. (supra). Ground no. 3 raised by the Revenue is dismissed.
In the result, the appeal of the Revenue is allowed in part, in terms indicated hereinabove. Order pronounced in the open court on 28/09/2016 Sd/- sd/- (AMARJIT SINGH) (R. C. SHARMA) न्मायमक सदस्म / JUDICIAL MEMBER रेखा सदस्म / ACCOUNTANT MEMBER भुंफई/Mumbai; ददनांक/Dated : 28.09.2016 व.यन.स./Roshani, Sr. PS आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1.