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TMI Blog2011 (9) TMI 920X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax(Appeals) has erred in directing the Assessing Officer to recompute the exemption under section 10A by excluding loss on fire accident to the extent of f 10.69 lakhs both in the numerator and denominator in the light of the Special Bench decision of the Tribunal in the case of Sak Soft Ltd., 121 TTJ 865. 3.2 The issue was considered by the Special Bench of the Tribunal, Chennai in the context of section 10A and it was held that such adjustment made in the export turnover must be made in the total turnover as well, for it is essential to maintain parity of variables. The Commissioner of Income-tax(Appeals) has accepted the claim of the assessee, placing reliance on the above decision of the Special Bench of the Tribunal, which is binding on him. We do not find any merit in the contention raised by the Revenue on this issue. This ground is rejected. 3.3. The next ground is that the Commissioner of Income-tax(Appeals) has erred in directing the Assessing Officer to delete the disallowance of managerial remuneration of 1 percent made on work in progress, on the ground that the assessee should be given credit for disallowances in subsequent years. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... event of the merger of M/s.Transys Technologies Pvt. Ltd. with the assessee company. The assessing authority treated the same as income under the provisions of section 28(iv) of the Income-tax Act, 1961. When this matter was considered in first appeal, the assessee argued at length that the finding of the Assessing Officer is erroneous in the facts of the case and there is nothing to be taken into consideration under section 28(iv). After hearing the detailed submissions of the assessee company, the Commissioner of Income-tax(Appeals) remanded the matter to the Assessing Officer, to which a remand report was furnished by the Assessing Officer. In the remand report dated 28-1-2010, the assessing authority himself has stated that where amalgamation is authorised by the High Court, the balancing figure on the asset side of the balance sheet takes the character of goodwill, which cannot be taxed. All the details relating to the computation of the figure, like the High Court order, the way the goodwill was arrived at and the details of other items of balance-sheets of both amalgamating and amalgamated companies were placed both before the assessing authority and the Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent made by the Assessing Officer on work-in-progress. The order of the Commissioner of Income- tax(Appeals) is confirmed on this point in view of our order passed in ITA No.1526(Mds)/2010 for the assessment year 2002-03. 5.4 The next ground of the Revenue is that the Commissioner of Income-tax(Appeals) has erred in deleting the disallowance of PF contribution by both employer and employee on the ground that the payments were made before the due date of filing the return of income. The Hon'ble Delhi High Court in the case of Commissioner of Income-tax vs. P.M. Electronics, 313 ITR 161, has held that where such payments were made before the due date for filing of the return, such amounts are deductible in computing the taxable income. The Commissioner of Income-tax(Appeals) has granted relief, relying on the above decision of the Hon'ble Delhi High Court. The order of the Commissioner of Income-tax(Appeals) is upheld. 5.5 The last ground raised in the present appeal is against the order of the Commissioner of Income-tax(Appeals) deleting the interest levied under section 234D of the Act. The Commissioner of Income-tax(Appeals) has rightly deleted the levy of interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax(Appeals) has rightly deleted the addition. 7.2 The next ground regarding the disallowance of 1 percent of the managerial remuneration has already been decided against the Revenue in earlier appeals discussed above. 7.3 So also, the issue relating to the disallowance of interest on diversion of funds has already been decided against the Revenue in appeals for the earlier assessment years, as discussed above. 7.4 The last issue raised by the Revenue is that the Commissioner of Income-tax(Appeals) has erred in holding that the assessee is eligible for deduction under section 10A, relying on the orders of the Tribunal in the case of M/s.Sofia Software Ltd. in ITA No.2797(Mds)/2005. M/s.Sofia Software Ltd. is the old name of the assessee company. In its own case the Tribunal has held for the assessment year 2000-01 that the assessee is entitled for deduction under section 10A. Therefore, this ground raised by the Revenue fails. 7.5. This appeal filed by the revenue for the assessment year 2006-07 is liable to be dismissed. 8. The next appeal to be considered is the one filed by the Revenue for the assessment year 2007-08 in ITA No.2056(Mds)/2010. 8.1. The first iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was known as M/s. Soffia Software Ltd.) that the assessee is entitled for the benefit of section 10A. There is no merit in the ground raised by the revenue. 9.2.This appeal is liable to be dismissed. 10. Next we will consider the appeal for the assessment year 2007-08 in ITA No.1250(Mds)/2011. 10.1. The only ground raised by the Revenue is that the Commissioner of Income-tax(Appeals) has erred in directing the assessing authority to recompute the exemption under section 10A by excluding the expenses incurred in foreign currency both in the numerator and denominator, following the decision of the Tribunal in the case of Sak Soft Ltd., 121 TTJ 865. The Commissioner of Income-tax(Appeals) has rightly followed the Special Bench decision of the Tribunal in the above case and held that the adjustment must be made both in the export turnover as well as in the total turnover. There is thus no merit in the ground raised by the Revenue. 10.2. The appeal filed by the Revenue fails. 11. In the appeal filed by the Revenue for the assessment year 2008-09 in ITA No.1251(Mds)/2011 the first issue is that the Commissioner of Income-tax(Appeals) has erred in holding that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The third issue of depreciation is again remitted back to the Commissioner of Income-tax(Appeals) for fresh consideration. 15. Next we shall consider the assessee's appeal in ITA No.1265(Mds)/2010 for the assessment year 2003-04. 15.1 All the grounds raised by the assessee in the present appeal is against the order of the Commissioner of Income-tax(Appeals) confirming the reassessment made under section 143 read with section 147. The assessee is questioning the legality of the reopening of the assessment under section 147. This issue has been considered by the Commissioner of Income-tax(Appeals) in a detailed manner in his order and we are in full agreement with his views. We do not find any substance in the arguments advanced by the assessee against the assessment completed under section 143 read with section 147. 15.2 This appeal filed by the assessee is liable to be dismissed. 16. Next we shall consider the appeal filed by the assessee for the assessment year 2006-07 in ITA No.1266(Mds)/2010. 16.1. One of the grounds raised in the present appeal is against the disallowance of managerial remuneration at 1 percent. This issue has already been held in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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