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2016 (2) TMI 511 - AT - Income TaxClaim of deduction under section 10B - Held that - the issue in dispute is squarely covered in favour of the assessee by the orders of the Tribunal in assessee s own case for preceding assessment years. From the material on record, we find that this is a recurring dispute between the assessee and the Department right from the assessment year 2003 04. The Assessing Officer in the preceding assessment years had disallowed assessee s claim of deduction under section 10B on the very same reason which was followed by the Assessing Officer in the impugned assessment order. However, as could be seen, the disallowance of claim of deduction under section 10B made by the Assessing Officer was challenged by the assessee before the learned Commissioner (Appeals) in the preceding assessment years. The learned Commissioner (Appeals) allowed assessee s claim of deduction under section 10B in the assessment years 2003 04 to 2006 07 and 2008 09. Against the orders of the learned Commissioner (Appeals), the Department preferred appeals before the Tribunal. However, the Tribunal upheld the decision of the learned Commissioner (Appeals) by . dismissing the appeal by the Department in respect of all these assessment years. Thus we uphold the decision of the learned Commissioner (Appeals) in allowing assessee s claim of deduction under section 10B.- Decided in favour of assessee MAT - Exclusion of income of SEZ Unit while computing book profit under section 115JB - Held that - Taking into consideration the effect of CBDT Circular no.3/2008 and relying upon the decision of the Tribunal, Mumbai Bench, in Genesys International Corporation Ltd. v/s ACIT, 2012 (12) TMI 491 - ITAT MUMBAI held that income / profit relating to SEEPZ unit has to be excluded while computing book profit under section 115JB. - Decided in favour of assessee Addition of deemed dividend under section 2(22)(e) - CIT(A) deleted the addition - Held that - Only reason for which the Assessing Officer has treated the amount as deemed dividend is both the companies have some common shareholders cannot be a reason for treating the amount as deemed dividend under section 2(22)(e). As held by the learned Commissioner (Appeals) since the Assessing Officer has failed to establish that assessee is the beneficial shareholder or even a shareholder, provisions of section 2(22)(e) cannot be applied. Also the issue in dispute is squarely covered in favour of the assessee by the decision of the Hon ble Jurisdictional High Court in case of CIT v/s Universal Medicare Pvt. Ltd. 2010 (3) TMI 323 - BOMBAY HIGH COURT thus we do not find any reason to interfere with the order of the learned Commissioner (Appeals). - Decided in favour of assessee.
Issues Involved:
1. Deduction under section 10B of the Income Tax Act, 1961. 2. Exclusion of income of SEZ Unit while computing book profit under section 115JB of the Act. 3. Addition of deemed dividend under section 2(22)(e) of the Act. Issue-wise Detailed Analysis: 1. Deduction under section 10B of the Income Tax Act, 1961: The Department challenged the decision of the learned Commissioner (Appeals) in allowing the assessee's claim of deduction under section 10B. The assessee, a company engaged in BPO services, had set up a unit under SEEPZ, recognized as a 100% export-oriented unit. During the assessment year 2009-10, the assessee claimed a deduction of Rs. 6,24,65,464 under section 10B. The Assessing Officer disallowed the deduction, maintaining consistency with the previous assessment year 2008-09, where the claim was rejected because the assessee did not employ its own manpower and goods but got its work done on a job-work basis. The learned Commissioner (Appeals) allowed the deduction, relying on the Tribunal's decisions for the preceding years, where similar claims were upheld. The Tribunal noted that the issue was a recurring dispute and upheld the decision of the learned Commissioner (Appeals), dismissing the Department's grounds. 2. Exclusion of income of SEZ Unit while computing book profit under section 115JB of the Act: The assessee initially filed its return declaring book profit under section 115JB. During assessment proceedings, the assessee revised the computation to show book profit at nil, citing section 115JB(6), which excludes profits of SEEPZ (EOU Unit) from book profit computation. The Assessing Officer rejected this claim, stating that claims not made by a revised return cannot be accepted and that MAT provisions apply to all company incomes, including SEZ units. The learned Commissioner (Appeals) allowed the exclusion, relying on CBDT Circular no.3/2008 and the Tribunal's decision in Genesys International Corporation Ltd. The Tribunal upheld this view, citing consistent decisions that profits from SEZ units are excluded from book profit computation under section 115JB(6). 3. Addition of deemed dividend under section 2(22)(e) of the Act: The Assessing Officer added Rs. 4,93,765 as deemed dividend under section 2(22)(e), noting an increase in advance received from Gebbs Technologies Ltd. The assessee argued that the amount was not a loan or advance but a transfer entry post-demerger. The learned Commissioner (Appeals) found that the assessee was not a shareholder of Gebbs Technologies Ltd. and that the amount was not a loan or advance, relying on the Tribunal's Special Bench decision in ACIT v/s Bhaumik Colour Pvt. Ltd. The Tribunal upheld this decision, noting that the assessee was not a registered shareholder and that common shareholders between companies do not justify treating the amount as deemed dividend. The Tribunal cited the Hon'ble Jurisdictional High Court's confirmation of the Special Bench's view in CIT v/s Universal Medicare Pvt. Ltd. Conclusion: The Tribunal dismissed the Department's appeal, upholding the decisions of the learned Commissioner (Appeals) on all issues. The assessee's claims under sections 10B and 115JB were allowed, and the addition under section 2(22)(e) was deleted. The judgment reaffirmed the consistent application of legal principles established in previous years and higher courts' rulings.
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