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TMI Blog2018 (9) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... verting to the specific grievance of the parties, we would like to make reference to certain facts. 3. The assessee at the relevant time was in the business of software development. It has filed its return of income on 31.10.2002 declaring NIL income after claiming deduction of Rs. 29,15,29,314/- under section 10A of the Income Tax Act, 1961. An assessment order was passed under section 143(3) on 28.12.2004. The ld.AO has made certain disallowance and restricted the deduction under section 10A at Rs. 25,52,65,186/-. Dissatisfied with the assessment order the assessee carried the matter in appeal before the ld.CIT(A) who has decided the appeal vide order dated 24.5.2005. Dissatisfied with order of the ld.CIT(A), assessee and Revenue went in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- being exchange fluctuation gain and other income of Rs. 1000/- for granting exemption u/s 10A in respect of new Unit in SEEPZ and STP in Pune Unit; (3) directing to recalculate deduction u/s 80HHE of the Act after considering the exchange fluctuation gain of Rs. 35,04,000/-; (4) allowing loans and advances written off of Rs. 1.33 lakhs; (5) allowing Rs. 4,25,72,977/- (sic) Rs. 42,57,297/- paid as Belgium tax u/s 37(1) of the Act; (6) allowing Rs. 72,11,557/- out of disallowance of Rs. 74,11,557/- u/s 14A of the Act; (7) deleting the addition of Rs. 2,34,50,000/- being compensation received for rendering human resource support services u/s 92 of the Act; & (8) & (9) being general in nature and no specific issues involv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 5. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 5. The assessee has raised only one ground of appeal, which reads as under: "The following ground of appeal is distinct and separate and without prejudice to each other: 1.0 Ground No. 1: The learned Commissioner of Income Tax (Appeals) - II ['the learned CIT(A)'] has erred in law and on facts in computing deduction under section 10A of the Income-tax Act, 1961 ('the Act') consideri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grant of deduction under section 10A as a standalone basis without setting of the loss of other non-eligible units. 7. We have considered rival contentions and gone through the record. The limited issue before the AO in a set aside proceedings was related to exclusion/inclusion of foreign exchange fluctuation gain from computation of 10A as well as reworking of disallowance for the purpose of 14A. The issue which has been agitated by the assessee in its appeal before the Tribunal in the second round was never raised before the ITAT in the first round nor it was remitted back. The jurisdiction in a set aside proceedings is to be confined to the issue which has been remitted back. No fresh issue can be taken up in such proceedings. If the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere tax effect is below Rs. 20 lakhs. The instructions have been made applicable with retrospective effect, meaning thereby, these instructions are applicable on pending appeals also. When we confronted the ld.DR with this Circular, the ld.DR did not dispute the same and left to the Tribunal to decide in accordance with law. 9. In the present case, if we consider each addition contested by the Revenue, then it would show that tax effect on each appeal would fall below Rs. 20 lakhs. The "tax effect" as per CBDT Circular is tax on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, would be less than Rs. 20 la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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