Asst. Comm. of Income-tax, Pune V. M/s. Eaton Industries Pvt. Ltd., Pune

ITA 1050/PUN/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 72366 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-01-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 17-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKUNDRAJ M CHATE
• Keywords: Transfer pricing; Additional evidence; Reasonable cause
• Section: 143(3); 28; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1050/PN/2011 ASSESSMENT YEAR : 200 5 - 06 ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8, PUNE VS. M/S. EATON INDUSTRIES PVT. LTD., 145, OFF MUMBAI-PUNE PIMPRI ROAD PUNE (APPELLANT) (RESPONDENT) PAN NO. AABCE4955C APPELLANT BY: SHRI MUKUNDRAJ M. CHATE RESPONDENT BY: SHRI VISHAL KALRA DATE OF HEARING : 10-10-2013 DATE OF PRONOUNCEMENT : 04-12-2013 ORDER PER G.S. PANNU, AM:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORD ER OF THE CIT(A)-V, PUNE DATED 30-05-2011, WHICH IN-TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER U/S. 143(3) OF THE AC T DATED 24-12- 2008 PERTAINING TO THE A.Y. 2005-06. 2. IN THE MEMO OF APPEAL FILED, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE U NDER RULE 46A BY WAY OF SEGMENTAL PROFIT AND LOSS ACCOUNT WITHO UT ESTABLISHING THE REASONABLE CAUSE WHICH PREVENTED TH E ASSESSEE FROM FURNISHING SUCH EVIDENCE BEFORE THE A.O. 2. THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCE U NDER RULE 46A BY WAY OF PRODUCTION OF SEGMENTAL PROFIT AND LOSS ACCOUNT WHICH WAS NOT ON ACCOUNT OF ANY SEPARATE BOOKS OF A CCOUNTS MAINTAINED BY THE ASSESSEE AND WHERE THE ADVANCES W RITTEN OFF WERE DEBITED TO THE SEGMENTAL P&L A/C PERTAINING TO STP I UN IT. 2 3. THE LD. CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S. 10A WITHOUT VERIFYING THE FACTUAL POSITION AS TO WHETHER THE ADV ANCES WRITTEN OFF PERTAINED TO THE STP I UNIT OR NOT. 3. AT THE TIME OF HEARING THE LD. DR APPEARING FOR THE RE VENUE POINTED OUT THAT THERE WAS A DELAY IN FILING OF THE PRESENT APPEAL AND REFERRED TO COMMUNICATION DATED 17-08-2011 FILED BY THE A SSESSING OFFICER JUSTIFYING THE DELAY. IN TERMS OF THE SAID COMMUNICA TION, IT HAS BEEN PRAYED THAT THE DELAY BE CONDONED AS IT WAS FOR S MALL NUMBER OF DAYS I.E. 7 DAYS AND SECONDLY THAT THE DELAY OCCURRED IN THE PROCESS OF FILING THE APPEAL AFTER GETTING APPROVAL FROM THE COMMISSIONER AS IN THE INTERVENING PERIOD THERE WERE HOLIDAYS ON ACCOUNT OF SATU RDAY, SUNDAY AND INDEPENDENCE DAY. THE DELAY WAS UNINTENTIONAL AND IT IS PRAYED THAT THE SAME BE CONDONED. THE LD. REPRESENTATIVE OF T HE ASSESSE HAS NOT SERIOUSLY OPPOSED THE SAID PRAYER OF THE REVENUE. 4. AFTER CONSIDERING THE REASONS ADVANCED BY THE ASSESSING OFFICER FOR A MINOR DELAY OF 7 DAYS IN FILING APPEAL BEFORE THE TRIBUNAL, WE FIND THAT THE SAME DESERVES TO BE CONDONED INASMUCH AS THERE IS NO CULPABLE NEGLIGENCE OR MALAFIDE IN THE DELAYED FILING OF THE APPEAL. A CCORDINGLY IN VIEW OF THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI AND OTHERS, 167 I TR 471 (SC), TO ENABLE THE COURT TO DO SUBSTANTIAL JUSTICE, THE DELAY IS HEREBY CONDONED, WHICH WAS ANNOUNCED AT THE TIME OF THE HEARING IN PRESENCE OF BOTH THE PARTIES. IN THIS BACKGROUND THE RIVAL COUNSE LS PROCEED TO MAKE THEIR ARGUMENTS. 5. THE GROUNDS OF APPEAL RAISED BY THE REVENUE REFLECT T HAT THE PRIMARY DISPUTE RELATES TO THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 10A OF THE ACT WITH RESPECT TO THE PROFITS AND GAINS DER IVED BY ITS UNDERTAKING FROM EXPORT OF COMPUTER SOFTWARE SET UP IN A SOFTWARE TECHNOLOGY PARK (REFERRED TO AS STPI UNIT) IN ACCORDANCE WITH THE 3 SOFTWARE TECHNOLOGY PARK SCHEME OF THE GOVERNMENT OF I NDIA. THE RESPONDENT-ASSESSEE IS A COMPANY CARRYING ON TWO SEPA RATE BUSINESSES NAMELY, AN ENGINEERING SERVICES BUSINESS, WHICH IS ENTIRELY EXPORT ORIENTED BUSINESS FROM ITS STPI UNIT, PROFITS OF WHICH ARE ELIG IBLE FOR DEDUCTION U/S 10A OF THE ACT, AND SECOND IS MARKETING SU PPORT SERVICES BUSINESS WHICH IS ALSO ENTIRELY EXPORT ORIENTED BUT IS CA RRIED OUT FROM A NON-STPI UNIT AND IS THUS NOT ELIGIBLE FOR SECTION 10A BENE FITS. THE DISPUTE BEFORE US PERTAINS TO ASSESSEES CLAIM FOR DEDUCT ION U/S 10A OF THE ACT IN RELATION TO THE STPI UNIT, AND IN PRINCIPLE THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSESSEE. THE DISPUTE IS WIT H REGARD TO ASSESSEES CLAIM FOR DEDUCTION U/S. 10A OF THE ACT IN RELA TION TO AN AMOUNT OF RS.46,33,337/-. IN THE COURSE OF ASSESSMENT PR OCEEDINGS, THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD CLAIMED A DEDUC TION ON ACCOUNT OF ADVANCES WRITTEN-OFF AMOUNTING TO RS.46,33,3 37/- WHICH WAS DISALLOWED ON THE GROUND THAT THE SAME WAS NOT AN ALLOWABLE DEDUCTION. IN AN APPEAL PREFERRED BY THE ASSESSE TO TH E CIT(A), THE SAID ACTION OF THE ASSESSING OFFICER HAS BEEN AFFIRMED, WHICH IS NO T THE SUBJECT-MATTER OF OUR CONSIDERATION. HOWEVER THE CIT(A) CONSIDERED AN ALTERNATIVE SUBMISSION MADE BY THE ASSESSEE TO THE EFFECT THAT IF THE ADVANCES WRITTEN-OFF AMOUNTING TO RS.46,33,337/- DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE STPI UNIT ARE DISALLOWED THEN TH E SAME SHOULD BE ADDED BACK TO THE INCOME OF THE STPI UNIT AND ASSES SEES CLAIM FOR DEDUCTION U/S. 10A OF THE ACT IS REQUIRED TO BE ENHANCED TO THAT EXTENT. IN OTHER WORDS, AS PER THE ASSESSEE THE DEDUCTION U/S . 10A OF THE ACT IS TO BE ALLOWED IN RESPECT OF THE TAXABLE PROFIT OF THE STPI UNIT, INCLUDING THE DISALLOWANCE MADE IN RESPECT OF THE ADVANCES WRITTEN -OFF. THE SAID PLEA HAS BEEN ACCEPTED BY THE CIT(A) AND ASSESSEE HAS BEEN HELD ELIGIBLE FOR THE CLAIM OF DEDUCTION WITH RESPECT TO THE SUM OF RS.46 ,33,337/- REPRESENTING ENHANCED TAXABLE INCOME OF THE STPI UNIT AS A RESULT OF 4 DISALLOWANCE OF ADVANCES WRITTEN-OFF. AGAINST THE AFORES AID DECISION OF THE CIT(A), THE REVENUE HAS RAISED THE AFORESAID GROUNDS BEFORE US. 6. AT THE TIME OF HEARING, THE LD. DR HAS ASSAILED THE A CTION OF THE CIT(A) BY SUBMITTING THAT THE CIT(A) ERRED IN ALLOWING THE R ELIEF TO THE ASSESSEE ON THE BASIS OF AN ADDITIONAL EVIDENCE, IN THE SHA PE OF SEGMENTAL PROFIT AND LOSS ACCOUNT OF THE STPI UNIT, WHICH WAS NOT BEFORE THE ASSESSING OFFICER. SECONDLY, IT IS SUBMITTED THAT THE SEGMENTAL PROFIT AND LOSS ACCOUNT CONSIDERED BY THE CIT (A) WAS NOT ON THE BASIS OF ANY SEPARATE BOOKS OF ACCOUNT MAINTAINED FOR STPI AND NON- STPI BUSINESSES; AND, THAT THE CLAIM HAS BEEN ALLOWED WITH OUT ESTABLISHING AS TO WHETHER THE ADVANCES WRITTEN-OFF PE RTAINED TO THE STPI UNIT OR NOT. 7. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE RESP ONDENT- ASSESSEE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE C IT(A) BY POINTING OUT THAT EACH OF THE OBJECTIONS RAISED BY THE REVENUE HAVE BEEN APPROPRIATELY DEALT WITH BY THE CIT(A) AND IN THIS CONTEXT IT IS POINTED OUT THAT IN THE COURSE OF APPELLATE PROCEEDINGS THE CIT(A ) HAD DIRECTED THE ASSESSING OFFICER TO CONSIDER AND MAKE FURTHER ENQUIRIE S WITH RESPECT TO THE IMPUGNED ALTERNATE SUBMISSION PUT FORTH B Y THE ASSESSEE REGARDING THE CLAIM OF DEDUCTION U/S. 10A OF THE ACT. THE C IT(A) DULY CONSIDERED THE REMAND REPORT FURNISHED BY THE ASSESSING OFFICER AND THEN CONCLUDED THAT ASSESSEES CLAIM FOR ENHANCED DEDUC TION WAS JUSTIFIED. ACCORDING TO THE LEARNED COUNSEL THERE IS NO FORCE IN THE PRESENT APPEAL OF THE REVENUE IN THE LIGHT OF THE FINDINGS O F THE CIT(A) AND ACCORDINGLY IT IS CONTENTED THAT THE APPEAL OF THE R EVENUE BE DISMISSED. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE SHORT POINT IS WITH REGARD TO ASSESSEES CLAIM FOR DEDUCTION U/ S. 10A OF THE ACT WITH RESPECT TO A SUM OF RS.46,33,337/- REPRESENTING ADV ANCES WRITTEN- 5 OFF, WHICH HAS BEEN DISALLOWED BY THE ASSESSING OFFICER AND ADDED TO THE TOTAL INCOME WHILE FINALIZING THE ASSESSMENT. AS PER THE AS SESSEE WHERE ITS TAXABLE INCOME RELATING TO THE STPI UNIT IS ENHANCED, IT IS THE ENHANCED INCOME WHICH IS ELIGIBLE FOR DEDUCTION U/S. 10A OF TH E ACT. SECTION 10A OF THE ACT PRESCRIBES DEDUCTION IN RESPECT O F NEWLY ESTABLISHED UNDERTAKINGS SPECIFIED THEREIN WHICH INTER-ALIA IN CLUDE A STPI UNIT. IN SO FAR AS THE ELIGIBILITY OF ASSESSEES STPI UNIT FOR DEDUCTION U/S. 10A OF THE ACT IS CONCERNED, THERE IS NO D ISPUTE. SECTION 10A OF THE ACT PRESCRIBES A DEDUCTION FROM THE TOTAL INC OME OF AN ASSESSEE IN RESPECT OF PROFITS AND GAINS DERIVED BY AN UN DERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWARE, AN D SUCH PROFITS AND GAINS ARE TO BE COMPUTED IN THE MANNER PRESCRIBED IN CHAPTER IV OF THE ACT. THUS, WHERE AN EXPENDITURE IS DISALLOWED WHILE C OMPUTING INCOME FROM PROFITS AND GAINS OF BUSINESS OR PROFESSION I.E . IN TERMS OF SECTIONS 28 TO 44D OF THE ACT, IN THE CASE OF A STPI UNIT , THEN SUCH DISALLOWANCE INCREASES THE STPI UNIT PROFITS FOR THE PURPOS ES OF ALLOWING DEDUCTION U/S. 10A OF THE ACT. IN PRINCIPLE, THE AFORESAID P ROPOSITION IS IN LINE WITH THE JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. GEM PLUS JEWELLERY INDIA LTD., 233 CTR 248 (BOM.). MOREOVER, THE GROUNDS OF APPEAL PREFERRED BY THE REVENU E ALSO DO NOT SUGGEST THAT THE REVENUE SEEKS TO CHALLENGE THE AFORES AID PROPOSITION. THE OBJECTIONS OF THE REVENUE ARE ON A DIFFERENT FOOTING, WHICH ARE THREE- FOLD, NAMELY THAT THE CIT(A) ERRED IN (I) ADMITTING AND ALLOWING THE CLAIM OF THE ASSESSEE ON THE BASIS AN ADDITIONAL EVIDENCE I.E. SEG MENTAL PROFIT AND LOSS ACCOUNT OF STPI UNIT, (II) ACCEPTING THAT ASSESSEE MAINTAINED SEPARATE BOOKS OF ACCOUNT FOR STPI UNIT AND NON-STPI U NIT, AND (III) ACCEPTING THAT THE ADVANCES WRITTEN-OFF BELONGED TO THE ST PI UNIT. 9. WE HAVE EXAMINED THE AFORESAID OBJECTIONS TAKEN BY T HE REVENUE IN THE CONTEXT OF THE DISCUSSION BY THE CIT(A) IN THE IMPUG NED ORDER. FIRSTLY, ASSESSEE FURNISHED BEFORE THE CIT(A) A SEGMENTAL P ROFIT AND LOSS 6 ACCOUNT OF THE STPI UNIT TO SHOW THAT THE ADVANCES W RITTEN-OFF IN QUESTION WERE DEBITED TO THE PROFIT & LOSS ACCOUNT OF TH E STPI UNIT. THE CIT(A) HAS RELIED ON THE AFORESAID PIECE OF EVIDENCE TO ACCE PT THE CLAIM OF THE ASSESSEE. THE REVENUE OBJECTS THAT IT WAS AN ADD ITIONAL EVIDENCE ACCEPTED BY THE CIT(A). IN OUR CONSIDERED OPINION, THE S TAND OF THE REVENUE IS QUITE MISPLACED. AT THE OUTSET, WE MAY NOTICE THAT ASSESSEE DEMONSTRATED BEFORE THE CIT(A) THAT THE DEDUCTION UNDER SECTION 10A OF THE ACT CLAIMED IN THE RETURN OF INCOME WAS ACCOMPANIED B Y FORM 56F (I.E. AUDITORS CERTIFICATE CERTIFYING THE DEDUCTION UNDER SEC TION 10A) AND IT WAS COMPUTED BASED ON THE PROFIT, EXPORT TURNOVER AN D TOTAL TURNOVER OF THE STPI UNIT AS SUPPORTED BY THE SEGMENTAL PROFIT AN D LOSS ACCOUNT. IT WAS THUS SOUGHT TO BE ESTABLISHED THAT THE SEGMENT AL PROFIT AND LOSS ACCOUNT WAS PREPARED EVEN BEFORE FILING OF THE RETURN OF IN COME AND IN THE ABSENCE OF THE SAME IT WOULD NOT HAVE BEEN POSSIBLE FOR THE AUDITOR TO CERTIFY FORM NO. 56F ANNEXED WITH THE RETURN OF INCOM E. SECONDLY, ASSESSEE POINTED OUT THAT THE SEGMENTAL PROFIT AND LOSS ACCOUNT WAS INDEED A PART OF THE RECORDS OF THE REVENUE INASMUCH AS THE SAME WAS SUBMITTED TO THE TRANSFER PRICING OFFICER DURING TRANSFER PR ICING ASSESSMENT PROCEEDINGS. IT WAS THEREFORE CONTENDED TH AT THE SEGMENTAL PROFIT AND LOSS ACCOUNT WAS NOT A FRESH PIECE OF EVIDENCE , WHICH WAS NOT ON RECORD. THE CIT(A) HAS ACCEPTED THE AFORESAID ASSERT IONS AND HELD THAT STRICTLY SPEAKING SEGMENTAL PROFIT AND LOSS ACCOUNT WAS NOT BE CONSTRUED AS AN ADDITIONAL EVIDENCE. THE CIT(A) HAS FURTH ER HELD THAT EVEN IF IT WAS TO BE CONSIDERED AS AN ADDITIONAL EVIDENCE, T HE SAME WAS LIABLE TO BE ADMITTED AND CONSIDERED FOR ADJUDICATION ON AC COUNT OF FACTS AND CIRCUMSTANCES OF THE CASE. 10. IN OUR CONSIDERED OPINION, NO FAULT CAN BE FOUND WITH THE AFORESAID CONCLUSION OF THE CIT(A). THE SEGMENTAL PROFIT & LOSS ACCO UNT OF THE STPI UNIT HAS BEEN RELIED BY THE ASSESSEE TO SUPPORT IT S CLAIM OF DEDUCTION U/S 10A OF THE ACT IN RELATION TO AN AMOUNT OF RS.46,33,337/- 7 REPRESENTING ADVANCES WRITTEN-OFF, WHICH HAS BEEN DISALLO WED BY THE ASSESSING OFFICER. OSTENSIBLY, BEFORE THE ASSESSING OFFICER THE RE WAS NO OCCASION FOR THE ASSESSEE TO HAVE PUT FORTH ANY SUBMISS ION OR MATERIAL IN SUPPORT OF ITS ALTERNATIVE PLEA FOR CLAIM OF DEDUCTION U/S. 10 A OF THE ACT IN RELATION TO THE IMPUGNED SUM OF RS.46,33,337/- BECAUSE IT IS ONLY AFTER THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE A DVANCES WRITTEN-OFF OF RS.46,33,337/-, THAT SUCH A CLAIM COULD BE RA ISED BY THE ASSESSEE. THUS, THE ASSESSEE RAISED THE CLAIM AT THE F IRST AVAILABLE OPPORTUNITY BEFORE THE CIT(A), AFTER THE ACTION OF THE ASSE SSING OFFICER DISALLOWING THE ADVANCES WRITTEN-OF AND ENHANCING THE INC OME OF THE STPI UNIT. MOREOVER, IT CLEARLY TRANSPIRES FROM RECORD TH AT THE SUBMISSIONS OF THE ASSESSEE ALONG WITH RELEVANT MATERIAL WE RE SENT BY THE CIT(A) TO THE ASSESSING OFFICER WITH DIRECTIONS TO VERIFY THE ASSERTION SOUGHT TO BE MADE BY THE ASSESSEE. IT IS ONLY AFTER C ONSIDERING THE REMAND REPORT OF THE ASSESSING OFFICER, THAT THE CIT(A) HAS ALLOWED THE PLEA OF THE ASSESSEE. THEREFORE THE CIT(A) ALLOWED A REASO NABLE OPPORTUNITY TO THE ASSESSING OFFICER TO EXAMINE THE CLAIM A ND THUS, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIN D NO ERROR ON THE PART OF THE CIT(A) IN ADMITTING AND ALLOWING THE CLAIM OF THE ASSESSEE, WHICH IS OTHERWISE ALSO BASED ON THE RELEVANT MATERIAL AVA ILABLE ON RECORD. NOTABLY, THE CIT(A) WAS ALSO GUIDED BY THE FACT T HAT IN THE SUBSEQUENT ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR S 2006-07 AND 2007-08, THE ASSESSING OFFICER HIMSELF ACCEPTED SIMILAR SEGMEN TAL PROFIT AND LOSS ACCOUNT OF THE STPI UNIT AND FORM NO. 56F FOR ALLOWING THE CLAIM OF THE DEDUCTION U/S. 10A OF THE ACT. 11. EVEN WITH REGARD TO THE PLEA OF THE REVENUE OF NON- MAINTAINING OF SEPARATE BOOKS OF ACCOUNT FOR STPI UNIT, IT WAS EXPLAINED BEFORE THE CIT(A) THAT ASSESSEE WAS INDEED MAINTAINING COMPUTERIZED B OOKS OF ACCOUNT. IN THE COMPUTERIZED ACCOUNTING SOFTWARE, STPI UNIT AND NON- STPI UNITS WERE ALLOTTED SEPARATE LEDGER CODES AND ACCO RDINGLY UNIT WISE 8 TRIAL BALANCES FOR STPI AND NON-STPI UNITS WERE GENERATE D, WHICH FORMED THE BASIS FOR PREPARATION OF SEGMENTAL PROFIT AND LO SS ACCOUNTS. THE CIT(A) APPRECIATED THE AFORESAID ASSERTION AND WE FIND NO REASON TO INTERFERE WITH HIS CONCLUSION IN THE ABSENCE OF ANY MATERIA L OR COGENT REASONING RELIED BY THE REVENUE TO THE CONTRARY BEFORE US. 12. IN THE RESULT, WE UPHOLD THE ACTION OF THE CIT(A) IN HO LDING THAT DEDUCTION U/S. 10A OF THE ACT WAS ALLOWABLE TO THE ASSES SEE ON THE INCOME ENHANCED DUE TO THE DISALLOWANCE OF RS.46,33,337/- M ADE BY THE ASSESSING OFFICER, HAVING REGARD TO THE MATERIAL AND EVIDENC E ON RECORD AND ALSO THE LEGAL POSITION LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF GEM PLUS JEWELLERY INDIA LTD. (SUPRA). 13. IN THE RESULT THE GROUNDS OF APPEAL NO. 1 TO 3 RAISE D BY THE REVENUE ARE DISMISSED. 14. AT THE TIME OF HEARING, REVENUE HAS RAISED AN ADD ITIONAL GROUND OF APPEAL, WHICH READS AS UNDER: WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING TO TAKE TURNOVE R OF UNDERTAKING OF STPI UNIT AS PER SEGMENTAL PROFIT AND LOSS ACCOUNT FILED BEFORE HIM. THOUGH THE SAME WAS NOT ON ACCOUNT OF ANY SEPAR ATE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR STPI AND NON-ST PI UNIT. 15. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS N OT OPPOSED THE RAISING OF THE AFORESAID ADDITIONAL GROUND AND THE SAME IS A CCORDINGLY ADMITTED FOR ADJUDICATION. RIVAL PLEAS HAVE ALSO BEEN HEAR D IN THIS REGARD. 16. BRIEF FACTS ARE THAT IN THE COURSE OF ASSESSMENT PRO CEEDINGS ASSESSING OFFICER DIFFERED WITH THE ASSESSEE WITH REGARD TO THE MANNER OF COMPUTATION OF DEDUCTION U/S. 10A OF THE ACT. THE ASSESS ING OFFICER COMPUTED THE DEDUCTION U/S. 10A OF THE ACT BY CONSIDERI NG THE TOTAL 9 TURNOVER OF THE ASSESSEE I.E. TOTAL TURNOVER OF THE ASSES SEE COMPANY INCLUSIVE OF THE TURNOVER OF NON-STPI UNIT ALSO INSTEAD OF T AKING INTO CONSIDERATION THE TOTAL TURNOVER OF STPI UNIT ONLY, AS DO NE BY THE ASSESSEE. AS A RESULT, TOTAL TURNOVER OF THE ASSESSEE W AS CONSIDERED BY THE ASSESSING OFFICER AT RS.21,21,22,568/- INSTEAD OF RS.20,27,4 2,030/- CONSIDERED BY THE ASSESSEE. THE CIT(A) HAS UPHELD THE STAND OF THE ASSESSEE BY MAKING THE FOLLOWING DISCUSSION IN PARA NO. 18 OF HIS ORDER: I HAVE CONSIDERED THE SUBMISSION OF THE APPELLANT AN D THE MATERIAL AVAILABLE ON RECORD. IT IS NOTICED THAT IN THE JUDGME NT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF TECHSPAN INDIA (P) LTD . (SUPRA) CITED BY THE APPELLANT, THIS CONTROVERSY HAS BEEN DEALT WITH QUITE CLEARLY. IT HAS BEEN HELD THAT W.E.F. A.Y. 2001-02, DUE TO AMENDME NT IN THE WORDINGS OF THIS SECTION 10A(4) THAT TOTAL TURNOVER O F THE SOFTWARE BUSINESS OF THE UNDERTAKING WAS TO BE TAKEN IN THE DENOMINATOR INSTEAD OF TOTAL TURNOVER OF THE BUSINESS OF THE APP ELLANT. SIMILAR DECISION WERE ALSO GIVEN BY THE ITAT, BANGALORE IN A S ERIES OF DECISION CITED BY THE APPELLANT IN ITS LETTER DATED 17.1 2.2009. CONSIDERING THE SAME, THE APPELLANTS SUBMISSION IS FO UND TO BE TENABLE IN LAW AND ACCORDINGLY GROUND NO. 3 OF APPEAL IS ALLOW ED. 17. AFTER CONSIDERING THAT THE CIT(A) HAS RELIED ON THE JU DGMENT OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF TECHSPAN INDIA (P) LTD. (SUPRA), WE FIND NO REASON TO INTERFERE WITH HIS CONCLUSION, AS NO DE CISION TO THE CONTRARY HAS BEEN POINTED OUT BY THE REVENUE. THUS O N THIS ASPECT ALSO WE AFFIRM THE ORDER OF THE CIT(A) AND REVENUE FAILS. 18. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 04-12-2013 SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER RK/PS/SUJEET PUNE, DATED: 04 TH DECEMBER, 2013 10 COPY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - V , PUNE 4 THE CIT - V, PUNE 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE