9911796707
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Issues Involved:
1. Product development expenses in foreign currency. 2. Reopening of assessment u/s 147 r.w.s 148. 3. Exclusion of expenses from export turnover. 4. Foreign travel expenses. 5. Disallowance of exchange fluctuation loss. 6. Amortization expenses. Summary: Issue 1: Product Development Expenses in Foreign Currency (Assessment Year 2001-02) The Revenue's appeal concerning product development expenses incurred in foreign currency amounting to Rs. 8,64,51,871/- was dismissed. The CIT(A) ruled that these expenses should not be excluded from export turnover, a decision upheld by the ITAT, referencing the Special Bench decision in the assessee's own case for AY 2003-04. Issue 2: Reopening of Assessment u/s 147 r.w.s 148 (Assessment Years 2001-02 and 2002-03) For AY 2001-02, the reopening of assessment was upheld as the Assessing Officer had valid reasons to believe income had escaped assessment. Similarly, for AY 2002-03, the reopening was deemed valid based on objective material available to the Assessing Officer. Issue 3: Exclusion of Expenses from Export Turnover (Assessment Years 2001-02, 2002-03, 2004-05, and 2005-06) For AY 2001-02, the exclusion of Rs. 4,43,19,916/- from export turnover was upheld. However, for AY 2002-03, the exclusion of Rs. 32,34,01,504/- was dismissed as the Assessing Officer had already verified and allowed the claim. For AY 2004-05 and 2005-06, the exclusion of expenses incurred in foreign currency on onsite development was decided in favor of the assessee, following the Special Bench decision. Issue 4: Foreign Travel Expenses (Assessment Years 2001-02 and 2002-03) For AY 2001-02, the issue was remanded back to the Assessing Officer for fresh consideration. For AY 2002-03, the exclusion of Rs. 44,26,416/- was upheld as no evidence was produced to support the claim. Issue 5: Disallowance of Exchange Fluctuation Loss (Assessment Year 2004-05) The disallowance of exchange fluctuation loss was dismissed, with the ITAT following the Supreme Court decision in Sutlej Cotton Mills Ltd vs CIT and other Tribunal decisions favoring the assessee. Issue 6: Amortization Expenses (Assessment Years 2004-05 and 2005-06) For AY 2004-05, the issue of amortization expenses was remanded back to the Assessing Officer for further investigation. Similarly, for AY 2005-06, the issue was set aside to the Assessing Officer with similar directions. Conclusion: - AY 2001-02: Assessee's appeal partly allowed for statistical purposes; Revenue's appeal dismissed. - AY 2002-03: Assessee's appeal dismissed. - AY 2004-05: Assessee's appeal partly allowed; Revenue's appeal partly allowed for statistical purposes. - AY 2005-06: Assessee's appeal allowed; Revenue's appeal allowed for statistical purposes. Order pronounced in the open court on 28.2.2011.
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