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TMI Blog2018 (10) TMI 1835X X X X Extracts X X X X X X X X Extracts X X X X ..... eals under Section 260-A of the Act. This Courtis only concerned with the question of law and that too a substantial one, which has a well-defined connotations as explained above and findings of facts arrived at by the Tribunal in these type of assessments like any other type of assessments in other regular assessment provisions of the Act, viz. Sections 143, 147 etc. are final and are binding on this Court. While dealing with these appeals undersection 260-A of the Act, we cannot disturb those findings of fact under Section 260-A of the Act, we cannot disturb those findings of the fact under Section 260-A of the Act, unless such findings are ex-facie perverse and unsustainable and exhibit a total non-application of mind by the Tribunal to the relevant facts of the case and evidence before the Tribunal. Advance for occupying additional space - Disallowance u/s 37(1) - AO had held that the rental deposit is in the nature of capital investment and it is not adjustable out of future rental expenditure - HELD THAT:- Tribunal found that the amount is towards advance for lease of additional space and the loss of money is in the course of business which amount has been written off as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appreciating that risk adjustment involves two vital pre-conditions i.e., with regard to difference in risk level exist between tested party and the uncontrolled comparables which is possible to calculate in terms of numbers and the adjustment can be made in such circumstances only and in the present case both the aspects were not established by the assessee? The relevant background aspects of the matter are as follows: The respondent-assessee who is in the business of software development filed e-return for the assessment year 2010-2011 declaring NIL income after claiming deduction under Section 10A of the Income-Tax Act, 1961 (hereinafter referred to as the Act for short). The case of the assessee was taken up for scrutiny. The assessee made available the necessary information and records before the Assessing Officer. The Assessing Officer considered it necessary to refer the computation of the Arms Length Price in relation to the international transaction of the assessee to the Transfer Pricing Officer (for short the TPO ). After obtaining prior approval of the Commissioner of Income Tax, the assessing officer by his letter dated 13.08.2012 referred the case of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing perused the material placed on record, we are clearly of the view that the questions of law, as proposed, do not arise in this matter and this appeal does not merit admission. So far question No.1 is concerned, it remains indisputable that the Hon ble Supreme Court in the case of Commissioner of Income-tax, Central-III v. HCL Technologies Ltd.: (2018) 93 taxmann.com 33 (SC), at paragraphs 10, 12, 15, 17, 19, 20 and 21 has held as follows: 10. The question arises here that when the particular term has not been defined in any particular Section, is it allowed to import the meaning of such term from the other provisions of the same Act? Section 10A of the IT Act is a special beneficial provision and the purpose of deduction under such Section is to encourage and boost the new business undertakings situated in the free trade zone of this Nation by providing suitable deductions to such business entities. Sometimes, while calculating the deduction, disputes arise regarding the methodology of deduction which ought to be followed. Undisputedly, it is a matter of record that the Respondent is engaged in the activity of trading of generic software and providing customized software ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e computing relief under Section 10A of the IT Act, the amount of communication expenses should be excluded form the total turnover if the same are reduced from the export turnover? While giving the answer to the issue, the High Court, inter-alia, held that when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to it, the said ordinary meaning is to be in conformity with the context in which it is used. Hence, what is excluded from export turnover must also be excluded from total turnover , since one of the components of total turnover is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. 19. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. 20. Even in common parlance, when the object of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acie perverse and unsustainable and exhibit a total non-application of mind by the Tribunal to the relevant facts of the case and evidence before the Tribunal. 45. Otherwise if the High Court takes the path of making such a comparative analysis and pronounces upon the questions as to which Filter is good and which comparable is relay comparable case or not, it will drag the High Courts into a whirlpool of such Data analysis defeating the very purpose and purport of the provisions of Section 260-A of the Act. Therefore what we observed above appears to us to be the sustainable view that the key to the lock for entering into the jurisdiction of High Court under Section 260-A of the Act is the existence of a substantial question of law involved in the matter. The key of ex-facie perversity of the findings of the Tribunal duly established with the relevant evidence and facts. Unless it is so, no other key or for that matter, even the in-consistent view taken by the Tribunal in different cases depending upon the relevant facts available before it cannot lead to the formation of a substantial question of law in any particular case to determine the aspects of determination of Arm s Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the claim of the assessee that the advance was given to landlord for occupying additional floor space for expanding its business, which would have increased its overall profitability. But the contract got terminated which resulted in loss of the said amount of ₹ 20,00,000/- paid to the landlord. In the draft assessment order, the Assessing Officer had held that the rental deposit is in the nature of capital investment and it is not adjustable out of future rental expenditure. But the DRP held that advance deposit for lease of additional space would not amount to capital in nature and allowed deduction from profit. The Tribunal found that the amount is towards advance for lease of additional space and the loss of money is in the course of business which amount has been written off as workable capital. It is not in dispute that the assessee had paid a sum of ₹ 20,00,000/- towards advance for lease of additional space for its business expansion. Due to breach of contract the assessee has suffered loss of ₹ 20,00,000/- as the assessee could not recover the same, which amount is written off as irrecoverable. The finding arrived at by the Tribunal as well as the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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