DCIT8(2), MUMBAI vs. LIONBRIDGE TECHNOLOGIES P.LTD, MUMBAI

“On the facts and in the circumstances of the case and in law. the Ld.CIT(A) erred in quashing the 147 proceedings without appreciating that the assesse had computed the export turnover for the purpose of deduction u/s 10A in complete contravention of the provisions of the said section, resulting in escapement of income.

2 On the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in quashing the proceedings u/s. 147 of the Act. without appreciating that the assessee had wrongly claimed and had been allowed exceesive deduction u/s. 10A of the Act in the original assessment on account of failure to exclude the prescribed expenses from the export turnover in terms of Explanation2(iv) of section 1OA of the Act

3 On the facts and in the circumstances of the case and in law, the Ld CIT(A) erred in quashing the proceedings u/s 147 of the Act by referring to the view taken in A.Y 2004-05 without appreciating that the principle of estoppels does not apply to income tax proceedings

4 On the facts and in the circumstances of the case and in law. the Ld The assessee is engaged in the business of development and export of computer software solutions and, providing other related services. It had filed its return of income for Assessment Year 2003-04 on 5/12/2003, declaring total income at Rs.1,54,98,981/- under the normal provisions, and book profit under section 115JB of the Income Tax Act, 1961 (in short “the Act”) at Rs.1,71,47,273/-. The case was selected for scrutiny and the assessment was completed under section 143(3) of the Act on 30/3/2006, determining the total income at Rs.7,68,56,600/-. The Assessing Officer then reopened the assessee’s case on 31.03.2003, on the ground that, the computation of deduction under section 10A submitted by the assessee in which the export turnover has been computed at Rs.45,85,23,836/-

Simultaneously, CIT-8 in the assessee’s case for the assessment year under consideration, passed order u/s.263 vide order dated 17.1.2008, and reduced the deduction u/s.10A. On further appeal before the Tribunal in ITA No. 7261/Mum/2008, the Tribunal set aside the matter to the Ld.AO with certain directions as regards to the computation of Export turnover and total turnover.

Against the Ld.AO’s order passed u/s.147, r.w.se.148 of the act the assessee went into appeal before the Ld. CIT(A). The Ld. CIT(A) held as under: “Moreover, I find that a similar issue came up in the assessment for the year 2004-05. In that year the admin CIT had passed an order under section 263 asking the Assessing Officer to reduce the figure of export turnover by allowing the deduction reducing to expenses incurred in foreign exchange. The assessee challenged the order before the ITAT, which directed that the Assessing Officer should examine the figure of export earner and arrive at the same in accordance with the definition of export turnover as per section 10A. It further directed that the parity should be maintained between export turnover in total turnover in keeping with the decision of the special bench in Sak soft Limited. The above order of the ITAT was given effect to by the Assessing Officer vide its order dated May 5, 2010. As per disorder the deduction as per section 10A has been worked out at RS. 22,70,85,863/-, which is the same figure which was returned by the assessee. In other words, the Assessing Officer accepted the a return competition with regard to section 10A. Now, the appellant has argued , that keeping in view the principle of consistency, even for assessment year 2003-04, no adjustment on this ground lies with regard to the computation under section 10A. I am in agreement with the appellant that the principle of consistency, which has been upheld by the juri ictional High Court in the case of Gopal Purohit, dictates that, facts remaining the same, adjustment of 4 Assessment Year 2003-04

Aggrieved by the order of the ld.CIT(A), the revenue is in appeal before us.

We have perused the orders passed by the authorities below and the order of the Tribunal in the assessee’s own case for the present assessment year cited by the Ld. Representative for the assessee .

""यथ" / The Respondent. 3. आयकर आयु"त(अपील) / The CIT(A)- 4. आयकर आयु"त / CIT

"वभागीय ""त"न"ध, आयकर अपील"य अ"धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड" फाईल / Guard file.