Now, we take-up the appeals for the A.Y. 2006-07 and 2007-08. The only common issue in both the appeals is in respect of deduction u/s.10A which was denied by the A.O. on the reason that the assessee company is formed by splitting and reconstruction of the existing business/undertaking.
We have already decided the identical issue in the appeal for the A.Y. 2005-06. As facts as well as reasoning for denial of deduction are identical in both these assessment years, we, therefore, following our findings and reasons for A.Y. 2005-06 dismiss grounds taken by the revenue in A.Ys. 2006-07 and 2007-08. There is no other issue save allow ability of deduction u/s.10A in the A.Y. 2006-07 and 2007-08.
INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA. 2832/Mum/2009 – (Assessment Year: 2005- 06)
ITA. 957/Mum/2010 – (Assessment Year: 2006- 07)
ITA. 4306/Mum/2010 – (Assessment Year: 2007- 08)
Income-tax Officer Wd.10 (3) (4)
Vs
Caliber Point Business Solutions Ltd.
Date of Pronouncement: 14.03.2012
O R D E R
PER R.S. PADVEKAR, JM:
This batch of three appeals of the same assessee are filed by the revenue challenging the respective impugned orders of the Ld. CIT (A), Mumbai for the A.Ys. 2005-06, 2006-07 & 2007-08 respectively. The issues as well as facts are identical and hence, these appeals are disposed of by this common order.
2. We first take appeal for the A.Y. 2005-06 being ITA No.2832/M/2010.
3. The first issue is whether Ld. CIT (A) is justified in allowing the deduction u/s.10A to the assessee when the same was denied by the A.O. on the reason that the assessee undertaking was formed by ‘splitting and reconstruction’ of existing undertaking.
4. The facts which revealed from the records are as under. The assessee company is engaged in the business of providing business process management, transitioning services, BPO services to its clients. The assessee is carrying out the said activity from its unit at Navi Mumbai as Software technology Parks (STP). The assessee is wholly owned subsidy of M/S. Hexaware Technologies Ltd. (in short referred to as HTL). The HTL appellant company is engaged also in software development and related services and it has been operating through registered STP and also eligible for deduction u/s.10A of the Act. The assessee’s case for the A.Y. 2005-06 was selected for scrutiny and assessment was completed u/s.143(3). The A.O. has noted that the assessee was incorporated on 14th May, 2004 and A.Y. 2005-06 is first year of its operation. The assessee had claimed deduction of Rs.1,22,23,849/- u/s.10A of the Act. The A.O. has a serious reservation for allowing the claim of deduction to the assessee u/s.10A of the Act. The A.O. sought the explanation of the assessee to justify the claim of deduction u/s.10A. The A.O. has noted that the assessee company is 100% subsidiary of M/s. Hexaware Technologies Ltd., India. M/s. Hexaware Technologies Inc., USA is another subsidiary of the parent company. The assessee has transactions with the holding company as well as fellow subsidiary. As noted by the A.O Mr. Ashok S. Bildikar is a President and Executive Director and is a Key Management Personnel. The A.O. has given the chart on page no.5 of the assessment order showing the transactions between the assessee holding company and fellow subsidiaries which is as under:
