DCIT 8(3), MUMBAI vs. SYNTEL LTD, MUMBAI

ORDER PER SHAILENDRA KUMAR YADAV, J.M: This appeal has been filed by Revenue against the order of Commissioner of Income-Tax (Appeals)-18, Mumbai, dated 04.07.2013 for A.Y. 2009-10 on following grounds:

A.Y. 09-10 [DCIT vs. M/s. Syntel Ltd.) Page 2

“(i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing interest income of Rs.14,26,60,079/- as profits eligible for deduction u/s. 10A/10B without appreciating that the said income was not derived from export of computer software and hence was not eligible for deduction u/s.10A/10B of the Act."

(ii) On the facts and in the circumstances of the case and in law, the CIT(A) erred in not appreciating the ratio of the judgement of the Hon'ble Apex Court in the case of Liberty India Ltd. vs. CIT (317 ITR 218) wherein it is held that that certain income may constitute profit from business u/s 28, yet the same cannot be construed as profits derived from an Industrial undertaking and hence would not be eligible for deduction u/s.10A/10B of the Act, which ratio has been followed by the Hon'ble ITAT, 'E' Bench, Mumbai in the case of Tricorn India Ltd. vs. ACIT (36 SOT 302)( A.Y. 200607) and in the subsequent A.Y. 2007-08 in the same case by ITAT, "K" Bench, Mumbai [ITA No.8058/Mum/ 2011 (order dated 03.05.2013)]."

(iii) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the interest income from EEFC Accounts as profits eligible for deductions u/s. 10A/10B of the Act relying upon the Bombay High Court's judgements in the cases of Punit Commercial Ltd. (245 ITR 550) and Nagpur Engineering (245 ITR 806) without appreciating that in a subsequent judgement delivered in the case of CIT Vs. Shah Originals (327 ITR 19 [2010], it was categorically held by the Bombay High Court that the interest accrued to the assessee on the deposits held in the EEFC account falls for classification as ‘income from other sources' and can not be treat as business income."

“7. No material difference in fact for the impugned assessment year has been brought to our notice by the Learned Departmental Representative. Therefore, respectfully following the decision of the co-ordinate bench rendered in assessee's own case referred to above, we allow assessee's claim of deduction under section 10A. However, it is observed that the Assessing Officer had disallowed claim of deduction under section 10A for an amount of Rs.1,17,23,282, being the interest income, whereas, as per the ground of appeal raised before us and the order of the learned Commissioner (Appeals), the interest income referred to therein is Rs.1,70,23,282. The Assessing Officer is directed to allow assessee's claim of exemption under section 10A after verifying the exact amount of interest income."

There being no material difference in facts brought to our notice by the learned Departmental Representative, respectfully following the consistent view of the Tribunal in assessee's own case, we allow assessee's claim of deduction under section 10A in respect of interest income of Rs.4,46,09,912. Ground raised by the assessee is allowed.”

2.1 Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so following same reasoning, we allow the assessee’s claim of deduction u/s.10A of the Act in respect of interest income as raised by assessee.” 2.1 Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so following same reasoning, A.Y. 09-10 [DCIT vs. M/s. Syntel Ltd.) Page 4 we are not inclined to interfere with the order of CIT(A) who has allowed the assessee’s claim by allowing interest income of Rs.14,26,60,079/- as eligible profit for deduction u/s.10A/10B of the Act.

Pronounced in the open Court on this the 26th day of August, 2016.

Sd/- Sd/- (RAJESH KUMAR) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai: Dated 26/08/2016 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाइल / Guard file. By order/आदेश से,

उप/सहायक पंजीकार, आयकर अपील�य अ�धकरण, मुंबई ।