Case Law Details
Macquarie Global Services Vs DCIT (ITAT Delhi)
Once the claim of deduction u/s 10AA has been accepted in the first year of the operations and also in the second year, then in the third year same cannot be withdrawn by examining the factors which were required to be seen in the first year of the claim. Thus, on this ground alone, we hold that the AO cannot deny the claim of deduction u/s 10AA with the assessee in this year and hence is directed to allow the same.
Even on the merits, we find that none of the allegation which has been made by the AO appears to be correct, because if he see the expansion and growth of revenue of EOU unit and the revenue of the SEZ unit, as incorporated above, we find that there has been substantial increase in the revenue in the EOU unit also from the financial year 2011-12 to financial year 2016-17. Thus, it cannot be held that after the sun set period the revenue of the EOU has gone down. The chart as submitted by the Ld. Counsel clearly vitiates the observation and the finding of the AO; and hence on the point that there is a less growth of revenue in EOU unit and therefore, presumption can be drawn for splitting up or reconstruction of EOU unit is incorrect and cannot be upheld. Further we find that the assessee continued to make addition to the fixed assets in the SEZ unit independently and there is no iota of any material to show that the additions to the fixed assets has been by way of transfer from EOU units. Likewise from the perusal of the list of technical man power, we find that except for two or three employees out of 30 employees are newly hired and therefore, it is not a case where the old employees of EOU unit have been entirely shifted to SEZ unit which seems to be the allegation of the AO. Thus, all the issues raised by the AO does not hold ground on the facts and material placed before us and hence on factual matrix also we hold that assessee has not violated any of the conditions prescribed in section 10AA and therefore, it is entitled for claim of deduction u/s 10AA in this year.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
The aforesaid appeal has been filed by the assessee against final assessment order dated 27.9.2017 passed u/s 143(3) read with section 144C(5) in pursuance of directions given by the Dispute Resolution Panel (DRP) vide order dated 7.9.2017. In various grounds of appeal the assessee has mainly challenged the disallowance of deduction u/s 10AA amounting to Rs. 10,43,46,127/- relating to profits derived by SEZ unit of the assessee from the export of IT-enabled services. For the sake of ready reference the relevant ground on this issue reads as under:-
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