ACIT Vs Hi-Tech Outsourcing Services (ITAT Ahmedabad)
The case involves an appeal filed by the Revenue and a cross-objection by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)] for Assessment Year (A.Y.) 2011–12. The assessment was completed under Section 143(3) of the Income Tax Act.
The assessee, a partnership firm engaged in data entry and processing services for foreign clients, filed its return declaring income of ₹17,39,370. During assessment, it claimed deduction of ₹4,93,30,648 under Section 10B but failed to furnish the required audit report in Form 56G. Instead, it submitted Form 56F relating to deduction under Section 10A. Consequently, the Assessing Officer (AO) denied the deduction under Section 10B and made additional additions relating to income from mutual funds and interest on income-tax refund, completing the assessment at ₹5,12,94,550.
On appeal, the CIT(A) allowed the assessee’s alternate claim for deduction under Section 10A. The Revenue challenged this decision, arguing that the assessee had not fulfilled the conditions for deduction under Section 10B and had not originally claimed deduction under Section 10A in the return of income. It was further contended that since the assessee had claimed deduction under Section 10B in earlier years, the alternate claim under Section 10A should not have been accepted.
