Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, BANGALORE BENCH ‘B’
Before: SHRI VIJAYPAL RAO & SHRI JASON P BOAZ
PER BENCH :
These two appeals are filed by the Revenue and the Cross objections are filed by the assessee. The relevant assessment years are & 1254/B/14 CO Nos.32 & 33/B/15 2 2005-06 and 2006-07. The appeals are directed against the two separate orders of Commissioner of Income-tax (Appeals) – II CIT(A) both dated 28/2/2014. The appeals arise out of the assessments completed u/s 143(3) of the Income-tax Act, 1961.
The Revenue has raised common grounds in these appeals. The grounds raised for the assessment year for 2005-06 are as under:-
(1) The order of the learned CIT(A) is opposed to law and facts of the case. (2) On the facts and in the circumstances of the case the learned CIT(A) erred in law in holding that the compensation amount of Rs.1.32 crores received by the assessee is capital in nature and hence not taxable without appreciating the fact that the assessee itself had treated the same as revenue receipt in the return of income filed. (3) On the facts and in the circumstances of the case the learned CIT(A) erred in law in directing the AO to exclude the reimbursement of certain expenses both from the export turnover as well as from total turnover for the purpose of computation of deduction u/s 10A, without appreciating the fact that the statute allows exclusion of such expenditure only from export turnover by way of specific definition of export turnover as & 1254/B/14 CO Nos.32 & 33/B/15 3 envisaged by sub-clause (4) of Explanation 2 below Sub-section (8) of section 10A and the total turnover has not been defined in this Section. (4) On the facts and in the circumstances of the case the learned CIT(A) erred in directing the AO to compute deduction u/s 10A in the above manner by placing reliance on the decision of Hon’ble High Court of Karnataka in the case of M/s Tata Elxsi Ltd., which has not become final since the same has not been accepted by the Department and SLPs are pending before the Hon’ble Supreme Court. (5) On the facts and in the circumstances of the case the learned CIT(A) erred in holding that brought forward losses are to be set off without appreciating that the AO had duly recorded the reasons for denying the carry forward of loss in the assessment order as well as in the remand report submitted. (6) For these and other grounds that they may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that the Assessing Officer may be restored.”
In the cross-objections for the assessment year 2005-06, the assessee has raised the following grounds: & 1254/B/14 CO Nos.32 & 33/B/15 4
“(1) The learned CIT(A) – II, Bangalore has erred in confirming the exclusion of compensation received for termination of contract amounting to Rs.1,35,54,600/- from the profit of the business while computing the deduction u/s 10A of the Act. (2) The learned CIT(A)-II, Bangalore has erred in not giving a finding on ground raised in respect of reimbursement of travel expenses amounting to Rs.2,27,325/- to be included in profit of the business while computing the deduction u/s 10A of the Act. (3) The learned CIT(A)-II, Bangalore has erred in not giving a finding on ground raised in respect of deemed exports received in foreign currency amounting to Rs.1,00,43,496/- to be included as part of export turnover for the purposes of sec. 10A of the Income-tax Act, 1961. (4) In view of the above and other cross objections to be raised at the time of hearing, the cross objector prays that the order passed by the learned Dy. Commissioner of Income-tax, Circle-12(3), Bangalore be quashed. Or in the alternative (i) Compensation received for termination of contract be treated as business income and be included in profit of the business while computing the deductions u/s 10A.
& 1254/B/14 CO Nos.32 & 33/B/15 5
(ii) Reimbursement of travel expenses be included in profit of the business while computing the deduction u/s 10A. (iii) Deemed exports be treated as export and included in the export turnover while computing the deduction u/s 10A.
Ground No.1 in the Revenue’s appeal is general in nature and does not require any specific adjudication.
The Ground No. 2of the Revenue’s Appeal and Ground No.1 of the Cross-Objections of the assessee are common in respect of the compensation amount of Rs.1.32 crores received by the assessee on account of termination of contract. Since the assessee has raised an alternative plea in the cross-objection on this issue and claimed that even if the compensation received for termination of contract is treated as revenue income of the assessee, the same will form part of the profits of the business for the purpose of computing deduction u/s 10A of the Income-tax Act.
We propose first to take up and adjudicate the issue raised by the assessee in the cross-objections regarding the compensation & 1254/B/14 CO Nos.32 & 33/B/15 6 received by the assessee would be part of profit of the business for the purpose of computing deduction u/s 10A of the Income-tax Act.
During the year under consideration, the assessee received an amount of Rs.1,35,54,600/- from a customer towards compensation for the termination of service contract with the assessee. The assessee has shown this amount separately under Schedule VIII as ‘other income’.
The assessee claimed deduction u/s 10A in respect of the said amount of compensation received from the customer. The Assessing Officer disallowed the claim of deduction u/s 10A and brought the amount to tax. Before the CIT(A), the assessee has also raised an alternative plea that even if the claim of deduction u/s 10A is not considered, the said amount cannot be taxed being capital in nature. The Commissioner has accepted the alternative plea of the assessee and held that amount received by the assessee in question on account of termination of contract is capital in nature and, therefore, not taxable.
Thus both the Revenue as well as the assessee are aggrieved by the finding of the CIT(A).
The Revenue has challenged the order of the CIT(A) on the issue that the amount received by the assessee as compensation on termination of contract is not taxable, whereas the assessee is & 1254/B/14 CO Nos.32 & 33/B/15 7 aggrieved by the action of the CIT(A) in not adjudicating the issue of allowability of deduction u/s 10A on this amount of compensation.
Before us, the learned AR of the assessee has submitted that this amount has been received by the assessee on account of termination of the contract by the customer in which the assessee was to render the services of software development to its client.
Therefore, the contract of supply of services was part and parcel of the business activity of the assessee and the amount received on account of termination is nothing but business income of the assessee. The amount has been received in the ordinary course of business activity of the assessee and in pursuant to the business contract with the client.
Therefore, the compensation received for termination of the contract is eligible for deduction u/s 10A. The learned AR has relied upon the decision of the Delhi Bench in the case of Sony India Pvt. Ltd., Vs DCIT, 114 ITD 448 as well as the decision of Mumbai Tribunal in the case of 3i Infotech Ltd., Vs. ACIT in and 3355 of 2010 dated 21/8/2013. & 1254/B/14 CO Nos.32 & 33/B/15 8
Thus, the learned AR has pleaded that the assessee is entitled for deduction u/s 10A of the Act in respect of the compensation received on account of termination of contract.
On the other hand, the learned DR has submitted that the assessee itself has shown the amount under Schedule – VIII being ‘other income’ and, therefore, this amount received by the assessee cannot be treated as business income arising out of export activity of the assessee. He has further submitted that since the amount was received only as compensation and not on account of export of software, therefore, this cannot be said to have been earned from the export of software.
He has relied upon the order of the Assessing Officer as well as the decision of Hon’ble Madras High Court in the case of CIT Vs. Pandian Chemicals Ltd., 233 ITR 497. Thus, learned DR has submitted that the income received by the assessee on account of termination of the contract has no connection with the actual conduct of business of industrial undertaking or export of software. Section 10A provides deduction only for the income derived from export of software. The Assessing Officer has treated the said amount of & 1254/B/14 CO Nos.32 & 33/B/15 9 Rs.1,35,54,600/- as deemed income u/s 40(1) of the Income-tax Act and, therefore, the said income is not eligible for deduction u/s 10A.
We have considered the rival submissions as well as material on record.
There is no dispute on the fact that a sum of Rs.1,35,54,600/- was received by the assessee from its client on termination of the contract. The contract in question was stated to be for supply of software to the client and, therefore, the assessee was compensated by the client when the contract was terminated. It is not clear from the record whether the contract in question was already given effect by the assessee and it was a continuing contract or the contract was only for future export of software and prior to its execution of supply by the assessee it was terminated by the other party and consequently, the assessee was compensated for a sum of Rs.1,35,54,600/-. Thus, so far as the nature of the amount received by the assessee, whether it is capital in nature or revenue, the complete facts are not recorded by the authorities below. We further note that even the CIT(A) has not recorded the fact whether the contract in question was ongoing contract in which the assessee has been supplying the software to its & 1254/B/14 CO Nos.32 & 33/B/15 10 client. Therefore, instead of going into the question of capital receipt or revenue receipt, we propose to first take up and decide the issue of allowability of deduction u/s 10A raised by the assessee in the cross- objection.
The facts emerged from the record clearly manifest that the contract was for export of software, which means the contract was in relation to the ordinary business activity of export of software. When the contract was for supply of software and on termination of said contract, the assessee received the compensation amount then the said amount cannot partake the nature of income other than the income derived and arisen from the business activity of the assessee. It has not been disputed that the contract was for the ordinary business activity of the assessee for supply and export of software. Therefore, the amount received by the assessee under the said contract and particularly on termination of the contract has a direct nexus with the business activity of the assessee. In the case of Sony India Pvt. Ltd., (Supra), the Delhi Bench of the Tribunal had the occasion to consider the identical issue of claim of deduction u/s 10A/10B in respect of the compensation received by the assessee on cancellation of contract for & 1254/B/14 CO Nos.32 & 33/B/15 11 research development and relating to application of software and the Tribunal as under:
“As regards that other amount of Rs.83,06,011/- forming part of miscellaneous income, it is observed that the said amount was received by the taxpayer company from Sony International (Euro), Germany on account of cancellation of a contract. The said contract was awarded by Sony International (Euro) to the taxpayer company in relation to research and development of application software in its centre located at Bangalore. As already noted, the said centre at Bangalore was set up for development of product related and application software and the contract undertaken by it in relation to research and development of application software for Sony International (Euro) thus was a part of its main activity carried on at Bangalore centre. The said contract was to be executed as per the terms and conditions of the agreement entered into between the taxpayer company and Sony International (Euro) and Article-6 of the said agreement had explicitly provided for the terms of cancellation of the contract and related compensation that shall be awarded upon such termination. As the work undertaken under the said agreement was in relation to the development of software which is the main business activity of its undertaking eligible for deduction u/s 10B, the compensation received & 1254/B/14 CO Nos.32 & 33/B/15 12 by the taxpayer company on cancellation/termination of the said contract/agreement, in our opinion was integral part of its main business. There was thus a clear and direct nexus between the amount of Rs.83,06,011/- received by the taxpayer company as compensation for cancellation of the contract and the main business of software development of its undertaking at Bangalore and the said income forming part of the said main business of the undertaking was eligible for deduction u/s 10B being derived from the said undertaking. For the application of words ‘derived from’, there should be a direct nexus between the income and the industrial undertaking and once such nexus is established, the said income certainly constitutes the income derived from such undertaking. As such, considering all the facts of the case, we are of the view that the amount of Rs.83,06,011/- received by the taxpayer company on account of cancellation of contract entrusted to it in relation to development of software constituted its profit derived from the undertaking eligible for deduction u/s 10B and the deduction under that section was rightly claimed by it in respect of the said income. In that view of the matter, we set aside the impugned order of the learned CIT(A) on this issue and direct the AO to allow the deduction u/s 10A/10B in respect of compensation amounting to Rs.83,06,011/- as claimed by the taxpayer company. Ground No.2 of the taxpayer’s appeal is thus partly allowed.”
& 1254/B/14 CO Nos.32 & 33/B/15 13
The Tribunal has taken a view that when the assessee received the compensation for cancellation of contract which pertains to the main business of software development of its undertaking then the said income forming part of the main business of undertaking was eligible for deduction u/s 10B. In the case in hand, the assessee is 100% export oriented unit (EOU) and particularly, the export of software. The contract in question was for supply/export of software and on cancellation of that contract for supply of software, the assessee received the compensation which is nothing but income derived from the said undertaking from the main business activity of the supply/export of software. Therefore following the decision of the Delhi Bench in the case Sony India Pvt. (Supra), we are of the viewi that the amount received by the assessee as compensation on account of cancellation of the contract in relation to export of software would constitute as its business income and will be part of profits of business of the undertaking and, therefore, eligible for deduction u/s 10A.
Since the alternate issue raised in the cross objection has been decided in favour of the assessee, therefore, we do not propose to go into the issue of the nature of the amount whether capital or revenue & 1254/B/14 CO Nos.32 & 33/B/15 14 in nature. Accordingly, the appeal of the revenue relates to the ground No.2 fails and Ground No.1 of the Cross- objection of the assessee is allowed.
Ground No.2 of the Revenue’s appeal is regarding exclusion of the expenses both from export turnover as well as from the total turnover for the purpose of computing deduction u/s 10A.
18. The Assessing Officer has reduced the expenses towards travel and data communication services amounting to Rs.28,66,482/- from the export turnover while computing the deduction u/s 10A. On appeal, the CIT(A) has directed the AO to reduce the expenses relating to travel and data communication services from the total turnover also and accordingly calculated the deduction available to the assessee u/s 10A. The CIT(A) has followed the decision of Hon’ble Jurisdictional High Court in the case of Tata Elxsi, 349 ITR 98.
19. At the outset, we note that this issue of exclusion of the expenses incurred in foreign exchange from the export turnover as well as from the total turnover is settled by the judgment of Hon’ble & 1254/B/14 CO Nos.32 & 33/B/15 15 Jurisdictional High Court in the case of Tata Elxsi (Supra), where in the Hon’ble High Court has held in para 17 and 18 as under :
“17. From the aforesaid judgments, what emerges is that, there should be uniformity in the ingredients of both the numerator and the denominator of the formula, since otherwise it would produce anomalies or absurd results. Section 10A is a beneficial section. It is intended to provide incentives to promote exports. The incentive is to exempt profits relatable to exports. In the case of combined business of an assessee, having export business and domestic business, the Legislature intended to have a formula to ascertain the profits from export business by apportioning the total profits of the business on the basis of turnovers. Apportionment on the basis of turnover was accepted as a method of arriving at export profits. In the case of section 80HHC, the export profit is to be derived from the total business income of the assessee, whereas in section 10A, the export profit is to be derived from the total business of the undertaking. Even in the case of business of an undertaking, it may include export business and domestic business, in other words, export turnover and domestic turnover. The export turnover would be a component or part of a denominator, the other component being the domestic turnover. In other & 1254/B/14 CO Nos.32 & 33/B/15 16 words to the extent of export turnover, there would be a commonality between the numerator and the denominator of the formula. In view of the commonality, the understanding should also be the same. In other words, if the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover n the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. Therefore, though there is no definition of the term ‘total turnover’ in section 10A, there is nothing in the said section to mandate that, what is excluded from the numerator that is export turnover would nevertheless form part of the denominator. Though when a particular word is not defined by the Legislature and an ordinary meaning is to be attributed to the same, the said ordinary meaning to be attributed to such word is to be in conformity with the context in which it is used. When the statue prescribes a formula and in the said formula, ‘export turnover’ is defined, and when the ‘total turnover’ includes export turnover, the very same meaning given to the export turnover by the Legislature is to be adopted while understanding the meaning of the total turnover, when the total turnover includes export turnover. If & 1254/B/14 CO Nos.32 & 33/B/15 17 what is excluded in computing the export turnover is included while arriving at the total turnover, when the export turnover is a component of total turnover, such an interpretation would run counter to the legislative intent and impermissible. If that were the intention of the Legislature, they would have expressly sated so. If they have not chosen to expressly define what the total turnover means, then, when the total turnover includes export turnover, the meaning assigned by the Legislature to the export turnover is to be respected and given effect to while interpreting the total turnover which is inclusive of the export turnover. Therefore, the formula for computation of the deduction us 10A, would be as under:
Profits of the business Export turnover Of the undertaking x,---------------------------------------------- (Export turnover + domestic turnover) Total turnover
In that view of the matter, we do not see any error committed by the Tribunal in following the judgments rendered I the context of section 80HHC in interpreting section 10A when the principle underlying both these provisions is one and the same. Therefore, we do not see any merit in these appeals. The substantial question of law framed is answered in favour of the assessee and against the Revenue.”
& 1254/B/14 CO Nos.32 & 33/B/15 18
Following the judgment of Hon’ble Jurisdictional High Court (Supra), we do not find any error or legality in the order of CIT(A) qua this issue.
Ground No.4 is regarding setting off of brought forward losses.
In the assessment, the AO disallowed the set off of brought forward loss of prior year. On appeal, the CIT(A) has set aside the issue with the direction that the AO to allow set off of brought forward losses as per law.
For the assessment year 2006-07, the CIT(A) has decided this issue on merit and allowed the claim of the assessee, accordingly, the deduction u/s 10A was allowed on current years profit on eligible unit without brought forward losses and unabsorbed depreciation being set off.
We have heard learned DR as well as learned AR and considered the relevant material on record. & 1254/B/14 CO Nos.32 & 33/B/15 19
At the out set we note that the issue on the setting off of brought forward losses after allowing the deduction u/s 10A is now covered by the judgment of Hon’ble Jurisdictional High Court in the case of CIT(A) Vs. Yokogowa (Supra), wherein Hon’ble High Court has held that the deduction u/s 10A is allowable on the relevant years profits of the eligible unit without brought forward losses and unabsorbed depreciation being set off in para 17 to 19 read as under:
“17. The substituted section 10A continues to remain in Chapter III. It is titled as “Incomes which do not form part of total income”. It may be noted that when section 10A was recast by the Finance Act, 2001, Parliament was aware of the character of relief given in Chapter III. Chapter III deals with incomes which do not form part of total income. IF parliament intended that the relief u/s 10A should be by way of deduction in the normal course of computation of total income, it could have placed the same in Chapter VI-A which houses the sections like 80HHC, 80-IA etc. Parliament was aware of the various restricting and limiting provisions like sec. 80A and sec. 80AB which was in Chapter VI-A which do not appear in Chapter III. The fact that even after its recast, the relief has been retained in Chapter III indicates that the intention of parliament it is to be regarded as an exemption and not & 1254/B/14 CO Nos.32 & 33/B/15 20 a deduction. The Act of Parliament in consciously retaining this section in Chapter III indicates its intention that the nature of relief continues to be an exemption. Chapter VII deals with the incomes forming part of the total income on which non income-tax is payable. These are the incomes which are exempted from charge, but are included in the total income of the assesse. Parliament, despite being conversant with the implications of this Chapter, has consciously chosen to retain sec. 10A in Chapter III.
If section 10A is to be given effect to a deduction from the total income as defined in section 2(45), it would mean that section 10A is to be considered after Chapter VI-A deductions have been exhausted. The deductions under Chapter VI-A are to be given from out of the gross total income. The term ‘gross total income’ is defined in sec. 80B(5) to mean the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter. As per the definition of gross total incme, the other provisions of the Act will have to be first given effect to. There is no reason why reference to the provisions of the Act should not include section 10A. In other words, the gross total income would be arrived at after considering section 10A deduction also. Therefore, it would be inappropriate to conclude that & 1254/B/14 CO Nos.32 & 33/B/15 21
section 10A deduction is to be given effect to after Chapter VI-A deduction are exhausted.
It is after the deduction under Chapter VI-A that the total income of an assessee as arrived at Chapter VI-A deductions are the last stage of giving effect to all types of deductions permissible under the Act. At the end of this exercise, the total income is arrived at. Total income is thus, a figure arrived at after giving effect to all deductions under the Act. There cannot be any further deduction from the total income as the total income is itself arrived at after all deductions.”
In view of the binding judgment of Hon’ble jurisdictional high court, we decide this issue in favour of the assessee and against the revenue for both the assessment years.
Now we will take up ground No.2 of the cross-objection for the assessment year 2005-06 relating to re-imbursement of travelling expenses amounting to Rs.2.27,325/- to be included in the profit of the business while computing deduction u/s 10A of the Act. & 1254/B/14 CO Nos.32 & 33/B/15 22
We have heard the learned DR and learned AR and considered the relevant material on record
The learned AR has pointed that this issue has not been adjudicated by the CIT(A). He has further contented that the amount received by the assessee being reimbursement of traveling expenses either to be included in that export turnover as well as total turnover or the net amount should be included in the profits of business.
Since this issue has not been adjudicated by the CIT(A), therefore, we remit this issue to the record of the CIT(A) for adjudication of the same on merit after giving an opportunity of being heard to the assessee.
The Ground No.3 of Cross-objection is regarding disallowance of deduction u/s 10A in respect of deemed export on account of sale to another STP unit.
The assessee claimed deduction u/s 10A by including an amount of Rs.1,00,43,496/- in the export turnover which relates to the software supply to another STP unit M/s Analog Devices India Pvt. & 1254/B/14 CO Nos.32 & 33/B/15 23 Ltd. The assessee claimed that this amount of Rs.1,00,43,496/- should be treated as deemed export as per the definition of export turnover u/s 10A as the receipt in question is convertible foreign exchange in India. The AO disallowed the claim of the assessee for deemed export in respect of software supplied to the Analog India Pvt. Ltd., as STP unit.
Before us, the learned AR of the assessee has submitted that the CIT(A) has not adjudicated this issue. However, this issue is now covered by the decision of the Hon’ble Jurisdictional High Court dated 20/10/2014 in the case of M/s Tata Elxsi Ltd., in ITA 411/ 2008.
On the other hand, the learned DR has submitted that when the issue has not been adjudicated by the CIT(A), then the proper remedy is before the CIT(A) and not in appeal before this Tribunal.
We have considered the rival submissions as well as the relevant material on record & 1254/B/14 CO Nos.32 & 33/B/15 24
At the outset, we note that the issue of deemed export in respect of the sale to another STP unit has been considered by the Hon’ble Jurisdictional High Court in the case of Tata Elxsi Ltd., vide judgment dated 20/10/2014 (Supra) in para 20 and 21 as under :-
“From the aforesaid provisions, it is clear that if a assessee wants to claim the benefit of section 10A, firstly he must export articles or things or computer software. Secondly, the said export may be done directly by him or through other exporter after fulfilling the conditions mentioned therein. Thirdly, such an export should yield foreign exchange which should be brought into the country. If all these three conditions are fulfilled, then the object of enacting sec. 10A is fulfilled and the assessee would be entitled to the benefit of exemption from payment of Income tax Act on the profits and gains derived by the undertaking from the export.
Clause 6.11 of Exim Policy dealing with entitlement for supplies from the DTA states that supplies from the DTA to EOU/EHTP/STP/BTP unit will be regarded as ‘deemed export’, besides being eligible for relevant entitlement under paragraph 6.12 of the Policy. They will also be eligible for the additional entitlements mentioned therein. What is of importance & 1254/B/14 CO Nos.32 & 33/B/15 25 is when a supply is made from DTA to STP, it does not satisfy the requirements of export as defined under the Customs Act. However, for the purpose of Exim Policy, it is treated as ‘deemed export’. Therefore, when section 10A of the Act was introduced to given effect to the Exim Policy, the supplies made from one STP to another STP has to be treated as ‘deemed export’ because clause 6.19 specifically provides for export through Status Holder. It provides that an EOU/EHP/STP/BTP unit my export goods manufactured/software developed by it through other exporter or status holder recognized under this policy or any other EOU/EHTP/STP/SEZ/BTP unit. What follows from this provision is that to be eligible for exemption from payment of income tax export should earn foreign exchange. It does not mean that the undertaking should personally export goods manufactured/software developed by it outside the country. It may export out of India by itself or export out of India though any other STP unit. Once the goods manufactured by the assessee is shown to have been exported out of India either by the assessee or by another STP unit and foreign exchange is directly attributable to such export then Section 10A of the Act is attracted and such exporter is entitled to benefit of deduction of such profits and gains derived from such export from payment of income-tax. Therefore, the finding of the authorities that the assessee has not directly exported the computer software outside & 1254/B/14 CO Nos.32 & 33/B/15 26 country and because it supplied the software to another STP unit, which though exported and foreign exchange received was not treated as an export and was held to be not entitled to the benefit is unsustainable in law. The substantial question of law is answered in favour of the assessee and against the revenue. The appeal is allowed. The impugned orders are set aside. The assessee is held to be entitled to deduction of such profits and gains derived from the export of the computer software. No costs.”
Therefore, as far as the allowability of deduction u/s 10A in respect of the sale to another STP unit in convertible foreign exchange, this issue is now covered by the above decision of Hon’ble jurisdictional High Court. However, this issue has not been examined by the CIT(A), therefore, only for the limited purpose of giving a finding that the sale in question is to the another STP unit, the issue is remitted to the record of the AO for verification and then allowing the claim of the assessee if sale in question is to the another STP unit.
For the assessment year 2006-07, the Revenue raised the identical issues as raised for the assessment year 2005-06. & 1254/B/14 CO Nos.32 & 33/B/15 27
In view of our finding for the assessment year 2005-06, the appeal of the Revenue for the assessment year 2006-07 stands disposed off in same terms.
+
In the cross objection No.33/Bang/20015 for the assessment year 2006-07 the assessee has raised only one ground which is an additional ground and reads as under:-
“The learned AO and the learned CIT(A) has erred in not including deemed exports of Rs.12,75,596/- as part of export turnover in computing deduction u/s 10A.
Since this issue has been considered while deciding the cross objection No.32/Bang/2015. Accordingly, the same is set aside to the record of AO for the limited purpose of verifying on the same terms.
In the result, the appeals filed by the Revenue are dismissed and the Cross-objections filed by the assessee are allowed in part. & 1254/B/14 CO Nos.32 & 33/B/15 28
Order pronounced in the open court on 31 Jul, 2015.