ACIT Vs. Symantec Software India P. Ltd. (ITAT Pune)- Based on the specific facts of the case, the Tribunal has reiterated that the fulfillment of the conditions of section 10A(2) is of utmost importance for claiming a deduction under section 10A. A reference to the new undertaking as expansion by the STPI would not dis-entitle the assessee from claiming a deduction under section 10A of the Act. This ruling re- emphasizes the need for detailed factual submissions to be made at the earliest opportunity. With regard to the loss set-off, the Tribunal has held that the entire profits of an eligible unit can be claimed as deduction under section 10A without setting off losses pertaining to another undertaking.
INCOME TAX APPELLATE TRIBUNAL, PUNE
Asstt. Commissioner of Income-tax Vs. Symantec Software India P. Ltd.
ITA No. 787/PN/09- (Asst. Year 2004-05)
ITA N0 805/PN/09 -( Asst. Year: 2004-05))
Date of pronouncement : 30.11 .2011
ORDER
PER G S PANNU, AM:
The cross-appeals by the Revenue and the assessee arise out of the order of the Commissioner of Income-tax (Appeals)-III, Pune dated 26.3.2009, which in turn have arisen from the order passed by the Assessing Officer under section 143(3)(3) of the Income-tax Act, 1961 ( in short “the Act”) pertaining to the assessment year 2004-05.
2. We shall first take up Revenue’s appeal, vide ITA No.787/PN/09.
3. Although the Revenue has raised four Grounds of appeal, but essentially the dispute is on two issues. Firstly, as per the Revenue the assessee is not entitled to the claim of deduction under section 10A in respect of Unit-B primarily for the reason that the said Unit is neither separate and nor has a distinct identity but was a mere expansion of the existing business. The second issue raised by the Revenue is with regard to the order of the Commissioner of Income-tax (Appeals) in holding that incomes by way of sales-tax refund, liabilities no longer required written back and Profit on sale of assets are eligible incomes for computing deduction under section 1 0A of the Act for Unit-A. The former issue being the substantive dispute, the same is being taken up at the outset.
4. In order to appreciate the background of the first issue, the following discussion is relevant. The assessee is a company incorporated under the provisions of Companies Act, 1956 on 12.9.1995 and is engaged in the business of software development services. It was registered with the STPI authorities initially on 16.11.1995 and thereafter, approvals were sought for expansion and in this manner, over the years upto the instant assessment year, the following tabulation extracted in para 3.2 of the order of the Commissioner of Income-tax (Appeals) shows the business operations being carried out by the assessee:
