Brief of the case: Bench of ITAT Delhi reversed the order passed by CIT (A) in which he confirmed the reassessment order after the lapse of four year when no new facts was revealed by the AO.
Facts of the case:
- Assessee was engaged in the business of producing customize software/programs for broadcasters like Star TV, BBC etc.
- The assessee filed its return of income on 02.12.2003, declaring total income at Rs.14,41,49,689/- after claiming deduction under section 80HHF of Rs. 12,01,29,653/-.
- The case was picked for scrutiny and In order u/s 143 (3) deduction u/s 80HHF was re-computed by the AO at Rs 12,06,49,803/-.
- Later on case was reopened on account of failure on the part of the assessee to disclose all material facts fully and truly for claiming deduction u/s 80HHF.
- Reassessment was completed after restricting the claim for deduction u/s 80HHF to Rs.11,48,38,379/- as against claim of Rs.12,01,29,653/- made.
- Against the reassessment order appeal was filed which was dismissed by the CIT (A).
Contention of the revenue:
- There is excess deduction claimed by assessee and allowed by AO u/s. 80HHF in the original assessment proceedings u/s. 143(3). The crux of AO’s findings is that foreign exchange fluctuation gains of Rs.1,19,64,641/- were not eligible for deduction u/s 80HHF of the Act.
- Assessee is liable to reduce the figures of Export Turnover and Total Turnover as disclosed by the Appellant in Form No.10CCAI by the amount of foreign exchange fluctuation gain of Rs.1,19,64,641/- and to further reduced 90% of income derived from foreign exchange fluctuation gain from the figure of “profits of business” eligible for claiming benefit of deduction u/s 80HHF.
Contention of the assessee:
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