M/s. SYNTEL LTD, MUMBAI V. JT. CIT (OSD) RG 8(3), MUMBAI

ITA 3413/MUM/2007

• Counselvise Citation: 341319914 RSA 2007
• Duration Of Justice: 8 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 04-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 04-05-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Assessee Lawyers: DINESH VYAS
• Keywords: Business income; Depreciation; Transfer pricing; Earning of tax free income
• Section: 10; 14A; 10B

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI E BENCH . . , , , BEFORE S/SH. A.D. JAIN,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO. 3413 /MUM/20 07 , / ASSESSMENT YEAR - 200 3 - 04 SYNTEL LIMITED (FORMERLY KNOWN AS SYNTEL (INDIA) LIMITED , UNIT NO.112, S.D.F. IV, SEEPZ , ANDHERI (E) - MUMBAI - 96. PAN: AA ACS 8305 D VS. JT. CIT - (OSD) RANGE - 8(3) AAYAKAR BHAVAN MUMBAI. ( / APPELLANT ) ( / RESPONDENT ) /. ITA NO. 3340 /MUM/20 07 , / ASSESSMENT YEAR - 200 3 - 04 ACIT - RANGE - 8(3) AAYAKAR BHAVAN , MUMBAI. VS. SYNTEL LIMITED MU MBAI - 400 096. ( / APPELLANT ) ( / RESPONDENT ) /. ITA NO. 2263 /MUM/20 08 , / ASSESSMENT YEAR - 200 4 - 05 ACIT - RANGE - 8(3) AAYAKAR BHAVAN , MUMBAI. VS. SYNTEL LIMITED MUMBAI - 400 096. ( / APPELLANT ) ( / RESPONDENT ) /. ITA NO. 1069 /MUM/20 08 , / ASSESSMENT YEAR - 200 4 - 05 SYNTEL LIMITED MUMBAI - 400 096. VS. ACIT - RANGE - 8(3) AAYAKAR BHAVAN , MUMBAI. ( / APPELLAN T ) ( / RESPONDENT ) /. ITA NO. 7391 /MUM/201 0 , / ASSESSMENT YEAR - 200 6 - 07 DY. CIT - RANGE - 8(3) AAYAKAR BHAVAN , MUMBAI. VS. SYNTEL LIMITED MUMBAI - 400 096. ( / APPELLANT ) ( / RESPONDENT ) /. ITA NO. 6589 /MUM/201 1 , / ASSESSMENT YEAR - 2007 - 08 SYNTEL LIMITED MUMBAI - 400 096. VS. ADDL.CIT - RANGE - 8(3) AAYAKAR BHAVAN , MUMBAI. ( / APPELLANT ) ( / RESPONDENT ) /. ITA NO. 6742 /MUM/201 1 , / ASSESSMENT YEAR - 200 7 - 08 DY. CIT - RANGE - 8(3) AAYAKAR BHAVAN, MUMBAI. VS. SYNTEL LIMITED MUMBAI - 400 096. /. ITA NO. 6885 /MUM/201 2 , / ASSESSMENT YEAR - 200 8 - 09 ADDL.CIT - RANGE - 8(3) AAYAKAR BHAVAN, MUMBAI VS. SYNTEL LIMITED MUMBAI - 400 096. ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI DINESH VYAS - (AR) / REVENUE BY : SHRI MANJUNATHA SWAMY - CIT - (DR) / DATE OF HEARING : 0 5 - 08 - 2015 6589 - SYNTEL LTD . 2 / DATE OF PRONOUNCEMENT : 31 - 08 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS OF THE CIT (A) - ,MUMBAI,THE ASSESSEE AND THE ASSESSING OFF ICERS(AO.S.) HAVE FILED CROSS APPEALS AND HAVE RAISED FOLLOWING GROUNDS OF APPEAL FOR THE ABOVE MENTIONED ASSESSMENT YEARS(AY.S.) ITA NO.3413/MUM/2007 - AY. 03 - 04 , (APPEAL BY THE ASSESSEE) : 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMM ISSIONER OF INCOME TAX (APPEALS) XXIX, MUMBAI (,THE CIT(A)') LEGALLY ERRED I N UPHOLDING THE ACTION OF THE JOINT COMMISSIONER OF INCOME TAX RANGE 8(3), MUMBAI ('THE JCIT') IN REDUCING FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10 A/ 10B OF THE INCOME TAX ACT, 19 61 ('THE ACT') AN AMOUNT OF RS. 15,18,65,460 ON ACCOUNT OF RECOVERIES OF UNDER- UTILISED DEDICATED HUMAN RESOURCES. 2. THE APPELLANT PRAYS THAT THE JCIT BE DIRECTED NOT TO REDUCE FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10 A / 10 B OF THE ACT THE AMOUNT OF RS. 15,18,65,460 ON ACCOUNT OF RECOVERIES OF UNDER - UTILISED DEDICATED HUMAN RESOURCES. II 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACT ION OF THE JCIT IN REDUCING FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10 A/ 10 B OF THE ACT AN AMOUNT OF RS. 9,71,653 OUT OF RS. 5,00,44,259 IN RESPECT OF RECOVERY OF GLOBAL RECRUITMENT CELL (GRC) COST. 2. THE APPELLANT PRAYS THAT THE JCIT BE DIRECTED NOT TO REDUCE FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10 A/ 10 B THE AMOUNT OF RS. 9,71,653 OUT OF RS. 5,00,44,259 IN RESPECT OF RECOVERY OF GRC COST. III 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT CONCLUDING THAT THE PROVISIONS OF SECTION 10A(7) OF THE ACT WERE INCORRECTLY INVOKED BY THE JCIT AFTER HOLDING THAT GENERAL OBSERVATIONS CANNOT BE MADE WITH REGARD TO THE PROFIT MARGINS SHOWN BY THE APPELLANT A ND COMPARISON OF INDUSTRY AVERAGE PROFITS TO DETERMINE THE ORDINARY PROFITS WAS NOT A FAIR CRITERION ADOPTED BY THE JCIT. 2. THE APPELLANT PRAYS THAT IT BE HELD THAT NO DISALLOWANCE UNDER SECTION 10 A/ 10B OF THE ACT WAS WARRANTED BY INVOKING THE PROVISI ONS OF SECTION 10A(7) OF THE ACT. IV 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT CONSIDERING AND DISREGARDING THE ADDITIONAL GROUND OF APPEAL RAISED DURING THE COURSE OF APPELLATE PROCEEDINGS WHICH READS AS FOLL OWS: 'THE LEARNED A.O. HAS ERRED IN NOT CONSIDERING THE CLAIM THAT THE INTEREST INCOME AGGREGATING TO RS. 5,40,69,769 DERIVED BY THE APPELLANT COMPANY IS DERIVED FROM THE INDUSTRIAL UNDERTAKING AND NOT ALLOWING DEDUCTION U/S 10A/10B OF THE ACT IN RE SPECT OF THE SAID INTEREST INCOME.' 2. THE APPELLANT PRAYS THAT THE LEARNED CIT(A) BE DIRECTED TO CONSIDER AND DEAL WITH THE SAID ADDITIONAL GROUND OF APPEAL RAISED DURING THE COURSE OF PROCEEDINGS BEFORE CIT(A). V 1. ON FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT DIRECTING THE JCIT TO FOLLOW A CONSISTENT VIEW IN RESPECT OF TREATMENT OF EXCHANGE LOSS AMOUNTING TO RS. 6,51,30,323 FOR COMPUTING EXPORT PROFIT ELIGIBLE FOR DEDUCTION U/S 10A/10B OF THE ACT. 6589 - SYNTEL LTD . 3 2. THE APPELL ANT PRAYS THAT THE JCIT BE DIRECTED THAT IN THE EVENT OF FINAL RESOLUTION OF THE DISPUTED ISSUE IN RELATION TO EXCHANGE GAIN/ LOSS, THE JCIT SHOULD, IF SO REQUIRED, MODIFY THE ORDER OF THE CURRENT YEAR TO BE IN HARMONY WITH THE FINAL ORDER OF ADJUDICATIO N. VI THE APPELLANT CRAVES LEAVE TO ADD, ALTER, OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. ITA NO.3340/MUM/2007AY - 2 003 - 04 (APPEAL BY THE AO): ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE ASSE SSING OFFICER TO RESTRICT THE DISALLOWANCE FOR PURPOSE OF DEDUCTION U/S.10A/10B OF THE ACT TO RS.9,71,653/ - OUT OF TOTAL RECO VERY OF RS .5,00,44,259/ - AND DELETE THE ADDITION IN RESPECT OF THE REMAIN ING AMOUNT OF RS4,90,72,606/ - (RS.5,00,44,259 - RS.9,71,653) 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE IN LAW, THE CIT(A) ERRED IN DIRECTING TO ALLOW DEDUCTION O N DEL AYED PAYMENT OF EMPLOYER AND EMPLOYEE'S CONTRIBUTION TO P.F MADE WITHIN GRACE PERIOD. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING NOT TO EXCLUDE RS.15,18,65,460/ - BEING RECOVERY OF UNDER UTILIZED HUMAN RESOUR CES AND OTHER COST RECOVERIES FROM - THE PROFIT OF BUSINESS FOR THE PURPOSE OF ALLOWING DEDUCTION U/S. 10A/10B OF THE ACT. ITA NO.1069/MUM/2008, ASSESSMENT YEAR - 2004 - 05 (APPEAL BY THE ASSESSEE ) : I 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XXV, MUMBAI ('THE CIT(A)') LEGALLY ERRED IN UPHOLDING THE ACTION OF THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 8(3), MUMBAI (THE ADD L .CIT). IN REDUCING THE PROFITS OF THE BUSINESS ELIGIBLE FO R DEDUCTION UNDER SECTION 10A/ 10B/ 80HHE OF THE ACT AN AMOUNT OF RS. 16,90,05,755 ON ACCOUNT OF RECOVERIES OF UNDER - UTILISED DEDICATED HUMAN RESOURCES. 2.THE APPELLANT PRAYS THAT THE ADDL.CIT BE DIRECTED NOT TO REDUCE FROM THE PROFITS OF THE BUSINE SS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A/10B/80HHEOF THE ACT THE AMOUNT OF RS.16,90,05,755 ON ACCOUNT OF RECOVERIES OF UNDER - UTILISED DEDICATED HUMAN RESOURCES. 11 WITHOUT PREJUDICE TO THE ABOVE, 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT GRANTING RELIEF AGAINST THE ACTION OF THE ADDL.CIT TREATING THE GROSS AMOUNT OF RECOVERIES OF UNDER UTILIZED HUMAN RESOURCES OF RS 16,90,05,755 AS INCOME WITHOUT ALLOWING CORRESPONDING EXPENSES AS DEDUCTION. 2. T HE APPELLANT PRAYS THAT THE ADDL.CIT BE DIRECTED TO ALLOW DEDUCTION OF EXPENSES FROM RECOVERIES OF UNDER UTILIZED HUMAN RESOURCES OF RS. 16,90,05,755. III 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING T HE ACTION OF THE ADDL.CIT IN REDUCING FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A/ 10B/ 180HHE OF THE ACT AN AMOUNT OF RS. 5,68,902 OUT OF RS. 5,84,67,872 IN RESPECT OF RECOVERY OF GLOBAL RECRUITMENT CELL (GRC) COST. 2. THE APPELLANT PRAYS THAT THE ADDL.CIT BE DIRECTED NOT TO REDUCE FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A/ 10B/80HHE THE AMOUNT OF RS, 5,68,902 OUT OF RS. 5,84,67,872 IN RESPECT OF RECOVERY OF GRC COST. IVI 1. ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ADDL.CIT IN DISALLOWING DEDUCTION UNDER SECTION.10A/10B/80HHE OF THE ACT IN RESPECT OF INTEREST ON INCOME - TAX REFUND OF RS.49, 19,769/ - , INTEREST ON SECURITY DEPOSIT WITH 6589 - SYNTEL LTD . 4 BSES RS.28,266/ - AND INTEREST ON LOAN TO EMPLOYEES RS.1,92,398/ - ON THE GROUND THAT THESE INCOME ARE NOT DERIVED FROM EXPORT OF COMPUTER SOFTWARE. 2. THE APPELLANT PRAYS THAT THE ADDL.CIT BE DIRECTED TO CONSIDER INTEREST ON I NCOME - TAX REFUND OF RS.49,19,769/ - , INTEREST ON SECURITY DEPOSIT OF RS.28,266/ - AND INTEREST ON LOANS TO EMPLOYERS OF RS.1 ,92,398/ - , AS DERIVED FROM EXPORT OF COMPUTER SOFTWARE AND GRANT DEDUCTION UNDER SECTION.10/A/10B/80HHEOF THE ACT. V 1. ON FAC TS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN NOT DIRECTING THE ADDL.CIT TO FOLLOW A CONSISTENT VIEW IN RESPECT OF TREATMENT OF FOREIGN EXCHANGE LOSS AMOUNTING TO RS.22,69,22,824/ - FOR COMPUTING EXPORT PROFIT ELIGIBLE FOR DEDUCTI ON UNDER SECTION. 10A/ 10B/ 80HHE OF THE ACT. 2. THE APPELLANT PRAYS THAT THE LEARNED ADDL.CIT BE DIRECTED THAT IN THE EVENT OF FINAL RESOLUTION OF THE DISPUTED ISSUE, THE ADDL.CIT SHOULD, IF SO REQUIRED, MODIFY THE ORDER OF THE CURRENT YEAR T O BE IN HARMONY WITH THE FINAL ORDER OF ADJUDICATION. VI 1. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER A T OR BEFORE THE APPEAL HEARING. ITA NO.2263/MUM/2008, ASSESSMENT YEAR - 2004 - 05 (APPEAL BY THE AO) : 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DIRECTING THE A.O TO RESTRICT THE DISALLOWANCE TO RS.5,68,902/ - AND DE LETE THE DISALLOWANCE OF RS.5,78, 98, 970/ - FOR THE PURPOSE OF CALCULATION OF ELIGIBLE PROFIT FOR DEDUCTION U/S. 10A/10B / 80HHE, WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, T HE CIT(A) ERRE D IN DIRECTING THE A.O TO RECALCULATE THE DEDUCTION U/S. 10A/1 0B/80HHE BY REDUCING RECOVERIES OF RS.21, 41, 55, 334/ - FROM THE ELIGIBLE PROFITS OF RS.132,15,55,067/ - WITHOUT AP PRECIATING THE FACTS OF THE CASE.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN DIRECTING THE A.O TO ALLOW DEDUCTION U/S.L0A & 10B ON INTEREST INCOME OF RS .3 ,06,63,052/ - BEING INTEREST OF EEFC ACCOUNT AND DEPOSIT WITH BANK AS MARGIN MONEY, WITHOUT APPRECIATING THE FACTS OF THE CA SE.' ITA NO.7391/MUM/2010 - AY.2006 - 07(APPEAL BY THE AO): '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ALLOWING RS.10,07,15 ,209/ - AS PROFITS ELIGIBLE FOR DEDUCTION U/S.10A / 10B THOUGH THE SAME WERE NOT DERIVED FRO M EXPORT OF COMPUTER SOFTWARE WITHOUT APPRECIATING THE FACTS OF THE CASE.' 2. ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING THE RATIO OF THE JUDGEMENT OF THE HON'BLE APEX COURT IN THE CASE OF LIBER TY INDIA LIMITED VS. CIT 317ITR 218, WHEREIN IT IS HELD THAT CERTAIN INCOME MAY CONSTITUTE PROFIT FROM BUSINESS UNDER SECTION 28, BUT IT CANNOT BE CONSTRUED AS PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING AND THE DECISION OF THE HON'BLE ITA T, 'E' BENCH, MUMBAI IN THE CASE OF TRICOM INDIA LIMITED VS. ACIT 36 SOT 302, WHEREIN IT IS HELD THAT INTEREST INCOME IS NOT ELIGIBLE FOR DEDUCTION U/S.10A / 10B.' THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE I TO/ ACIT /DCIT BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ITA NO.6589/MUM/2011,AY.2007 - 08(ASSESSEES APPEAL): 6589 - SYNTEL LTD . 5 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMIS SIONER OF INCOME TAX(A) - 8, MUMBAI ('THE LEARNED CIT(A)'} ERRED IN UPHOLDING THE ACTION OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 8(3), MUMBAI ('THE AO') OF DISALLOWING RS. 46,12,133/ - UNDER SECTION 14A OF THE INCOME - TAX ACT, 1961 ('THE ACT'). THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO DELETE THE AFORESAID ADDITION. 2. WITHOUT PREJUDICE TO THE ABOVE GROUND, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ACTION OF THE AO OF NOT GRANTIN G THE DEDUCTION UNDER SECTION 10A/10B, WHICH IS CONSEQUENT TO THE ADDITION MADE TO THE BUSINESS INCOME OF THE UNITS CLAIMING SUCH DEDUCTION, AS THE PROFITS OF THE BUSINESS UNITS ARE ELIGIBLE FOR DEDUCTION UNDER SECTION 10A/ 10B OF THE ACT. THE A PPELLANT PRAYS THAT THE AO BE DIRECTED TO GRANT DEDUCTION UNDER SECTION 10A/10B AFTER CONSIDERING THE ADDITION MADE TO THE INCOME. 3.WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN REJECTING THE APPELLANT'S PRAYER TO RESTRICTED THE DISALLOWANCE UNDER SECTION 14A OF THE ACT TO RS.14,337/ - . THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO RESTRICT THE ADDITION TO RS. 14,337/ - . 4. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, OR WITHDRAW ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY EITHER AT OR BEFORE THE APPEAL HEARING. ITA/6742/MUM/2011.AY.,2007 - 08(AOS APPEAL) '1.ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ALLOWING INTEREST INCOME OF RS.11,90,24,116/ - AS PROFITS ELIGIBLE FOR DEDUCTION U/S.10A / 10B THOUGH THE SAME WERE NOT DERIVED FROM EXPORT OF COMPUTER SOFTWARE WITHOUT APPRECIATING THE FACTS OF THE CASE.' 2.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING THE RATIO OF THE JUDGEMENT OF THE HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA LIMITED VS. CIT 317ITR 218, WHEREIN IT IS HELD THAT CERTAI N INCOME MAY CONSTITUTE PROFIT FROM BUSINESS UNDER SECTION 28, BUT IT CANNOT BE CONSTRUED AS PROFITS DERIVED FROM INDUSTRIAL UNDERTAKING AND THE DECISION OF THE HON'BLE ITA T, 'E' BENCH, MUMBAI IN THE CASE OF TRICOM INDIA LIMITED VS. ACIT 36 SOT 302, W HEREIN IT IS HELD THAT INTEREST INCOME IS NOT ELIGIBLE FOR DEDUCTION U/S.10A / 10B.' THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ITO/ ACIT /DCIT BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND O R ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ITA/ 6885/MUM/2012.AY.,2008 - 09(AOS APPEAL) '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ALLOWING INTEREST INCOME OF RS.14,2819,778/ - AS PROFITS ELIG IBLE FOR DEDUCTION U/S.10A / 10B THOUGH THE SAME WERE NOT DERIVED FROM EXPORT OF COMPUTER SOFTWARE WITHOUT APPRECIATING THE FACTS OF THE CASE.' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING TH E RATIO OF THE JUDGEMENT OF THE HON'BLE APEX COURT IN THE CASE OF LIBERTY INDIA LIMITED VS. CIT 317ITR 218, WHEREIN IT IS HELD THAT CERTAIN INCOME MAY CONSTITUTE PROFIT FROM BUSINESS UNDER SECTION 28, BUT IT CANNOT BE CONSTRUED AS PROFITS DERIVED FROM INDUSTRIAL 6589 - SYNTEL LTD . 6 UNDERTAKING AND THE DECISION OF THE HON'BLE ITA T, 'E' BENCH, MUMBAI IN THE CASE OF TRICOM INDIA LIMITED VS. ACIT 36 SOT 302, WHEREIN IT IS HELD THAT INTEREST INCOME IS NOT ELIGIBLE FOR DEDUCTION U/S.10A / 10B.' THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ITO/ ACIT /DCIT BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ASSESSEE - COMPNAY,ENGAGED IN THE BUSINESS OF DEVE LOPMENT AND EXPORT OF COMPUTER SOFTWARE SERVICES,WAS FORMED IN MAY 1992. DETAILS OF DATES OF FILING OF RETURNS,INCOMES RETURNED,DATES OF ASSESSMENT, ASSESSED INCOMES, DATES OF ORDERS OF THE CIT(A)CAN BE SUMMARISED AS UNDER : RETURN FILED ON RETURNED INCOM E (RS.) ASSESSMENT DT. ASSESSED INCOME(RS.) DT. OF ORDERS OF CIT(A) 200 3 - 0 4 28.11.2003 19,45,90,800/ - 28.02.2006 38,01,87,600/ - 05.02.2007 2004 - 0 5 30.10.2004 18,16,25,910/ - 12.12.2006 48,80,56,380/ - 01.01.2008 200 6 - 0 7 23.11.2006 21,46,01,320/ - 04.12.200 9 21,46,01,320/ - 18.08.2010 200 7 - 0 8 31.03.2009 21,00,34,749/ - 08.12.2010 21,00,40,670/ - 12.07.2011 2008 - 09 31.03.2009 21,00,34,749/ - 08.12.2010 21,00,40,670/ - 12.07.2011 ITA/ 3413 /MUM/20 07 - / AY.200 3 - 04 : 2. FIRST GROUND OF APPEAL IS ABOUT REIMBURSEMENT OF COST OF UNDERUTILIZED DEDICATED HUMAN RESOURCES FOR THE PURPOSE OF DEDUCTION U/S. 80 A OF THE ACT. DURING THE COURSE OF HEARING BEFORE US THE REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DELIVERED IN ASSESSEE S OWN CASE FOR AY.02 - 03 (ITA / 3859/ & 3534/M/06 DT.6.1.09) , THAT IN THE APPEAL FILED BY THE DEPARTMENT BEFORE THE HON'BLE BOMBAY HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL FOR AY . 02 - 03(ITA - L - 1440 OF 2009) THE GROUND ABOUT REIMB URSEMENT OF COST WAS NOT RAISED, THAT THE HON'BLE HIGH COURT HAD DISMISSED THE APPEAL FI LED BY THE DEPARTMENT FOR AY.02 - 03, VIDE ITS ORDER DATED 22.7.2009. 2.1. WE FIND THAT THE TRIBUNAL HAD,WHILE ADJUDICATING THE ISSUE IN THE AY.2002 - 03,DECIDED THE MATTER AS UNDER: 11 WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY.AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD,WE FIND THAT THE CLAI M OF THE ASSESSEE IS ALLOWABLE. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE ON THE REASONS THAT RECEIPT OF RS.18, 91, 72,279/ - ARE OF REVENUE IN NATURE AND THEY ARE NOT ENTITLED FOR EXEMPTION U/S 10A OF THE ACT BECAUSE THESE RECEIPTS WERE NOT DERIVED BY THE UNDERTAKING FROM THE EXPORT OF COMPUTER SOFTWARE. IT HAS BEEN MENTIONED B Y THE AO THAT IN OTHER WORDS, THE REVENUE OF RS. 18.91 CRORES SHOULD HAVE DIRECT NEXUS TO THE EXPORT OF COMPUTER SOFTWARE. IN OUR CONSIDERED VIEW, THESE OBSERVATIONS OF THE AO ARE WITHOUT ANY BASIS. THE ASSESSEE ENTERED INTO AN AGREEMENT WITH SYNTEL INC AND M/ S SYNTEL EUROPE AND AS PER THE CLAUSES OF THE AGREEMENT, CERTAIN EXPENSES AND OTHER ESTABLISHMENT EXPENSES ARE TO BE REIMBURSED BY THESE COMPANIES. ACCORDINGLY, THEY WERE REIMBURSED. THE REIMBURSEMENTS WERE ONLY ON ACCOUNT OF EXPORT OF COMPUTER SOFTWARE. THE AO HAS STATED THAT THESE RECEIPTS DO NOT HAVE DIRECT NEXUS TO THE COMPUTER SOFTWARE; HOWEVER, HE FAILED TO ESTABLISH THAT HOW THESE RECEIPTS ARE NOT DIRECTLY LINKED WITH THE EXPORT OF COMPUTER SOFTWARE AND ON WHAT ACCOUNT THESE RECEIPTS HAV E BEEN RECEIVED BY THE ASSESSEE. IF THE CONTENTION OF THE LD AO IS ACCEPTED THAT THESE ARE REVENUE RECEIPTS, IN THAT CASE ALSO THESE RECEIPTS HAVE TO BE TREATED AS RECEIPTS ON ACCOUNT OF EXPORT OF COMPUTER SOFTWARE BECAUSE THE 6589 - SYNTEL LTD . 7 ASSESSEE DEALS IN THIS BU SINESS WITH THESE PARTIES FROM WHOM ON ACCOUNT OF REIMBURSEMENT AMOUNT HAS BEEN RECEIVED. 11.1 UNDISPUTEDLY, THE EXPENSES INCURRED BY THE ASSESSEE ON ACCOUNT OF EXPORT OF COMPUTER SOFTWARE ARE MUCH HIGHER THAN THE AMOUNT OF RS. 81.91 CRORES RECEIVED BY THE ASSESSEE FROM THESE TWO PARTIES. THEREFORE,THE AMOUNT RECEIVED BY THE ASSESSEE IS NOTHING BUT REIMBURSEMENT OF EXPENSES.BY REIMBURSE - MENT OF EXPENSES, THE EXPENSES OF THE ASSESSEE HAD BEEN REDUCED AND THE PROFIT HAS BEEN INCREASED. THEREFORE, THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 10A BECAUSE THESE RECEIPTS ARE DIRECTLY LINKED WITH THE BUSINESS OF THE ASSESSEE. VARIOUS DECISIONS RELIED UPON BY THE ASSESSEE BEFORE THE CIT(A), WHICH HAVE BEEN DISCUSSED BY THE CIT(A) IN HIS ORDER AND ALSO REPR ODUCED SOMEWHERE ABOVE IN THIS ORDER, CLEARLY INDICATES THAT THE REIMBURSEMENT OF EXPENSES ARE NOTHING BUT DIRECTLY LINKED WITH THE BUSINESS OF THE ASSESSEE. 12 IN THE CASE OF DUNLOP RUBBER CO LTD IN 141 ITR 493 (CAL), THE HON'BLE CALCUTTA HIGH COURT H AS CONFIRMED THE DECISION OF THE TRIBUNAL THAT IF THE ASSESSEE HAD RECOVERED ANYTHING MORE THAN THE EXPENDITURE ACTUALLY INCURRED,THEN SUCH EXCESS WOULD HAVE BEEN TREATED AS REVENUE RECEIPTS LIABLE TO TAX. IN COMING TO SUCH CONCLUSION,THE TRIBUNAL RELIE D ON THE TERMS OF THE AGREEMENT BETWEEN THE PARTIES, WHICH SHOWED THAT WHAT WAS RECOUPED WAS A PART OF THE EXPENSES. IN THE PRESENT CASE ALSO, THE COMPANY DID NOT RECOVER ANYTHING MORE THAN THE EXPENDITURE ACTUALLY INCURRED. FURTHER, THE EXPENSES SO RE COVERED WERE INEXTRICABLY RELATED TO THE EXECUTION OF PROJECTS OF SYNTEL INC/SYNTEL EUROPE. THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE OF DUNLOP RUBBER COMPANY LTD. THEREFORE, IN VIEW OF THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IT HAS TO BE HELD THAT THE RECEIPTS ON ACCOUNT OF REIMBURSEMENT ARE NOTHING BUT REDUCTION OF EXPENSES INCURRED BY THE ASSESSEE ON THE PROJECT EXECUTED ON BEHALF OF THE SYNTEL INC. /SYNTEL EUROPE AS PER CLAUSES OF THE AGREEMENT. 12.1 SIMILAR VIE W HAS BEEN TAKEN BY THE MUMBAI TRIBUNAL IN THE CASE OF ZUARI AGRO CHEMICALS AND VARIOUS OTHER DECISIONS RELIED UPON BY THE ASSESSEE BEFORE THE CIT(A). THE RATIO OF SOME OF THE DECISIONS HAVE BEEN DISCUSSED BY THE CIT(A) AND ALSO REPRODUCED SOMEWHERE ABO VE IN THIS ORDER ARE IN SUPPORT OF THE CASE OF THE ASSESSEE. THE ASSESSEE HAS NOT AVAILED ANY DOUBLE BENEFIT ONCE BY WAY OF INCURRING EXPENSES AND ONCE BY WAY OF GETTING EXEMPTION U/S. 10A. WHATEVER THE EXPENSES WERE INCURRED BY THE ASSESSEE,PART OF WHIC H WAS REIMBURSED AS PER AGREEMENT.ON ACCOUNT OF REIMBURSEMENT THE EXPENSE BURDEN OF THE ASSESSEE HAS BEEN REDUCED,WHICH RESULTED INCREASE IN PROFIT. THE INCREASED PROFIT ON ACCOUNT OF REIMBURSEMENT OF EXPENSES IS NOTHING BUT PROFIT DERIVED OUT OF THE BUSI NESS OF THE ASSESSEE COMPANY; THEREFORE, THE ASSESSEE COMPANY IS ELIGIBLE FOR EXEMPTION. 13 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES AND WITHOUT GOING INTO DETAILS FURTHER, WE HOLD THAT THE ASSESSEE IS ELIGIBLE FOR EXEMPTION U/S.10A/10B ON THE RECE IPTS OF RS. 18.91 CRORES AS CLAIMED. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS ALLOWED. RESPECTFULLY,FOLLOWING THE ABOVE ORDER AND CONSIDERING THE FACT THAT THE DEPARTMENT HAD NOT CHALLENGED THE ORDER OF THE TRIBUNAL WITH REGARD TO THE ISSUE IN QUEST ION BEFORE THE HONBLE HIGH COURT,WE DECIDE GROUND NO.1 IN FAVOUR OF THE ASSESSEE . 3. G ROUND NO.2.IS ABOUT CONFIRMING THE ACTION OF THE AO IN REDUCING FROM THE PROFITS OF THE BUSINESS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A/10B OF THE ACT AN AMOUNT OF RS . 9,71,653 OUT IN RESPECT OF RECOVERY O F GLOBAL RECRUITMENT CELL(GRC) COST. IT WAS BROUGHT TO OUR NOTICE THAT THE IDENTICAL ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL FOR THE AY.2002 - 03 (SUPRA).WE FIND THAT THE TRIBUNAL HAD LINKE D THE ISSUE WITH THE ISSUE OF UNDER UTILIZATION OF 6589 - SYNTEL LTD . 8 HUMAN RESOURCES AND HAD HELD AS UNDER: 14.GROUND NO. 5 RELATES TO DISALLOWANCE OF RS. 9,73,398/ - ON ACCOUNT OF RECOVERY OF GLOBAL RECRUITMENT CELL (GRC) COST. 14.1 THE LD. COUNSEL OF THE ASSESSEE STATED THAT THIS GROUND IS SIMILAR TO THE GROUND NO.4. WE HAVE ALREADY DISPOSED THE GROUND NO.4 WHEREBY WE HAVE DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE OF RS.18.91 CRORES AS CLAIMED ; ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE IN THIS RESPECT ALSO IN VIEW OF THE REASONING GIVEN BY US WHILE DISPOSING THE GROUND NO.4. 4. GROUND NO.3 IS ABOUT APPLICABILITY OF PROVISIONS OF SECTION 10A(7) OF THE ACT . BEFORE US,IT WAS AGREED BY THE REPRESENTATIVES OF BOT H THE SIDES THAT THE TRIBUNAL HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE,WHILE ADJUDICATING THE APPEAL FILED BY THE ASSESSEE FOR THE AY.02 - 03(SUPRA).WE WOULD LIKE TO REPRODUCE THE RELEVANT PARAGRAPH OF THE SAID ORDER: GROUND NO 6 RELATES TO APPLICABI LITY OF PROVISIONS OF SEC.10A(7). THIS GROUND IS ALSO LINKED WITH THE GROUND NO.4.GROUND NO.4 WE HAVE DISPOSED IN FAVOUR OF THE ASSESSEE BY WHICH IT HAS BEEN HELD THAT THE ASSESSEE IS ENTITLED TO EXEMPTION ON ACCOUNT OF REIMBURSEMENT OF EXPENSES.THE CIT(A) HIMSELF, AT PAGE 68 OF HIS ORDER HAS GIVEN THE FOLLOWING FINDINGS: I AGREE WITH THE ARS SUBMISSIONS THAT HAD IT BEEN THE INTENTION OF LEGISLATURE TO COMARE THE PROFIT OF AN ASSESSEE WITH THE AVERAGE PROFIT OF THE INDUSTRY LEGISLATURE WOULD HAVE USED THE WORD VERAGE PROFITSINSTEAD OF WORDS PRESENTLY USED RDINARY PROFITS. IF AT ALL THE MARGIN OF PROFIT OR GAIN IS TO BE COMPARED WITH PROFIT OR GAIN OF OTHER PLAYERS IN THE SAME INDUSTRY, SUCH COMAPRISON CANNOT BE MADE WITH AVERAGE PROFIT MARGIN OF TH E SAME INDUSTRY. THIS IS BECAUSE, THE AVERAGE WOULD NECESSARILY BE DEPRESSED BY TAKING INTO ACCOUNT THE LOWER PROFITS MADE BY SOME OF THE OTHER PLAYERS. IN THE CASE OF APPELLANT AR HAS GIVEN VARIOUS REASONS AS TO HOW AND WHY ITS PROFIT MARGINS ARE BETTER T HAN THE INDUSTRY AVERAGE. APPELLANT IS HAVING 100% EXPORT TURNOVER AND IT HAS NO INTEREST COST. AR HAS ALSO STATED THAT ITS DEPRECIATION COST IS ALSO LOW AS THE APPELLANT COMPANY HAS SET UP THE UNIT AS BACK AS IN 1995. AR/APPELLANT HAS ALSO JUSTIFIED ITS B ETTER MARGIN OF PROFIT BY MAKING COMPARISON TO SOME OF THE COMPANIES IN THE SAME FIELD WHO ARE 100% EXPORTERS. IN VIEW OF ABOVE DISCUSSION, I AM OF THE OPINION THAT WHILE A GENERAL OBSERVATION CANNOT BE MADE WITH REGARD TO THE PROFIT MARGINS SHOWN BY THE A PPELLANT, IT MAY BE SAID THAT THIS ISSUE DOES NOT SURVIVE IN VIEW OF THE FACT THAT I HAVE ALREADY UPHELD TH E ADDITION OF RS.18,91,93,126/ - AND RS.9,73,398/ - OUT OF RS.3,11,20,944/ - .IN VIEW OF ABOVE DISCUSSION, HOWEVER, SINCE ADDITION OF RS.3,01,47,546/ - (R S.3,11,20,944 RS.9,73,398) HAS BEEN DELETED, PROFITS TO THAT EXTENT WOULD INCREASE IN VIEW OF THE ABOVE, NO SEPARATE ADJUDICATION IS CONSIDERED NECESSARY ON THIS ISSUE. THE CIT(A) HAS NOT GIVEN ANY FINDING BECAUSE OF THE REASON THAT HE HAS DISMISSED THE G ROUND NO.4, WE HAVE ALLOWED IN FAVOUR OF THE ASSESSEE AND IN VIEW OF THE REASONING GIVEN BY THE CIT(A), AGAINST WHICH THE DEPARTMENT IS NOT IN APPEAL THAT THERE MAY BE INCREASE IN PROFIT IN SOME CASE, THE PROVISIONS OF SECTION 10A(7) CANNOT BE APPLIED. THE CIT(A) HAS ALSO FOUND THAT THE ASSESSEES MAIN BUSINESS IS EXPORT AND DEPRECIATION ETC. HAS BEEN CLAIMED VERY LESS AND IT IS CONSIDERED THAT THE PROFIT CAN BE MORE THAN IN COMPARING WITH THE AVERAGE PROFITS OF OTHER INDUSTRIES.IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE PROVISIONS OF SEC.10A(7) ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. ACCORDINGLY, THIS GROUND OF THE ASSESSEE IS ALSO ALLOWED. 6589 - SYNTEL LTD . 9 RESPECTFULLY,FOLLOWING THE ABOVE REFERRED ORDER OF THE TRIBUNAL,WE DECI DE GROUND NO.3 IN FAVOUR OF THE ASSESSEE. 5. NEXT GROUND IS ABOUT NOT CONSIDERING THE CLAIM THAT THE INTE REST INCOME AGGREGATING TO RS. 5, 40,69,769 / - DERIVED BY THE ASSESSEE WA S DERIVED FROM THE INDUSTRIAL UNDERTAKING AND NOT ALLOWING DEDUCTION U/S 10A/10 B OF THE ACT IN RESPECT OF THE SAID INTEREST INCOME .BEFORE US,I T WAS AGREED BY THE DR AND AR THAT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY TRIBUNALS ORDER S FOR OTHER AY . S. INCLUDING AY. 02 - 03( SUPRA ), THAT DEPARTMENTS APPEAL BEFORE THE H ONBLE HIGH COURT PERTAINING TO ELIGIBILITY FOR DEDUCTION U/S. 10A OF THE ACT WAS DISMISSED. 5 .1. WE FIND THAT WHILE DECIDING THE APPEALS NO. 7544/7546/MUM/04 AND ITA/8122 - 24/MUM/04 DT.11.02.2008,THE TRIBUNAL HAD DECIDED THE ISSUE AS UNDER: 19.AS REGARDS GROUNDS NOS. 4 & 6 RELATING TO INTEREST AND OTHER INCOME CLAIMED AS EXEMPTION U/S. 10A AND 10B OF THE ACT, WE FIND THAT THIS ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AYRS. 99 - 2000 AND 2000 - 01 WHEREIN IT HAS BEEN HELD TO HAVE A DIRECT NEXUS WITH THE BUSINESS AND DEVELOPMENT OF EXPORT OF SOFTWARE. RESPECTFULLY FOLLOWING THE DECISIONS OF THE COORDINATE BENCH, THESE GROUNDS OF THE ASSESSEE ARE ALLOWED. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THE TRIBUNA L AND CONSIDERING THE FACT - THAT THE APPEAL FILED BY THE DEPARTMENT WITH REGARD TO ELIGIBILITY OF 10A /10B DEDUCTION,BEFORE THE HONBLE HIGH COURT, HAS BEEN DISMISSED - WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE . 6. LAST GROUND OF APPEAL IS ABOUT FOREIGN EXC HANGE LOSS ON SALES/DEBTORS, BALANCE IN EFFC ACCOUNT AND ITS TREATMENT WHILE COMPUTING DEDUCTION U/S. 10A OF THE ACT . 6.1. DURING THE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAD COMPUTED BUSINESS PROFIT FOR THE YEAR UNDER APPEAL AFTER DEBITIN G EXCHANGE LOSS OF ABOUT RS. 6.51 CRORES IN THE P&L ACCOUNT AND AFTER REDUCING THE EXPORT TURNOVER AMOUNT BY RS.6,51,30,323/ - . IN THE EARLIER YEAR THE AO HAD NOT ACCEPTED THE SIMILAR POSITION WHEN THERE WAS GAIN BECAUSE OF EXCHANGE RATE. THE ASSESSEE , BEFORE THE FAA STATED THAT THE ISSUE FOR THE EARLIER YEARS WAS PENDING FOR ADJUDICATION, THAT THE AO SHOULD BE DIRECTED TO MODIFY THE ORDER AFTER THE ISSUE WAS ADJUDICATED BY HIGHER AUTHORITIES. THE FAA WAS OF THE OPINION THAT THE ASSESSEE SHOULD NOT HAVE ANY GR IEVANCE, THAT THE AO HAD ACCEPTED THE FIGURE SHOWN IN THE RETURN BY THE ASSESSEE ITSELF, THAT IT WAS OPEN TO THE AO TO TAKE A CONSISTENT VIEW ON THE ISSUE AS AND WHEN THE ISSUE WAS DECIDE BY HIGHER APPELLATE AUTHORITIES . 6.2. BEFORE US,THE AR CONTENDED THAT THE VIEWS TAKEN BY THE HIGHER JUDICIAL FORMS SHOULD BE FOLLOWED BY THE AO.IN OUR OPINION,THE AO IS BOUND TO FOLLOW THE ORDERS OF THE HIGHER JUDICIAL AUTHORITIES.THEREFORE,WE ALLOW THE LAST GROUND OF APPEAL FOR STATISTICAL PURPOSES. ITA NO.3340/MUM/2007AY - 2003 - 04 (APPEAL BY THE AO): 7.FIRST GROUND OF APPEAL,FILED BY THE AO,DEALS WITH RESTRICTING THE DISALLOWANCE FOR PURPOSE OF DEDUCTION U/S.10A/10B OF THE ACT TO RS.9,71,653/ - OUT OF TOTAL RECOVERY OF RS.5,00,44,259/ - AND DELETING THE ADDITION IN RESPECT OF T HE REMAINING AMOUNT OF RS.4,90,72,606/ - . DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD SHOWN TOTAL RECOVERY OF RS.5 CRORES AND HAD CLAIMED DEDUCTION OF THE SAID AMOUNT U/S.10 OF THE ACT.HE WAS OF THE OPINION THAT THE ASSESSEE WAS NOT ELIGIBLE FOR THE DEDUCTION.IN THE APPELLATE PROCEEDINGS,THE FAA RESTRICTED THE DISALLOWANCE TO RS.9.71 LAKHS AND HELD THAT BALANCE AMOUNT I.E. RS.4.90 CRORES WAS ELIGIBLE FOR DEDUCTION. 6589 - SYNTEL LTD . 10 7.1. BEFORE US,THE DR AND THE AR AGREED THAT THE ISSUE IS COVERED IN FA VOUR OF THE ASSESSEE BY THE ORDER OF THE TRIBUNAL DATED 03.03.2010(ITA/2695/MUM/2009 - AY.2005 - 06),THAT THE ORDER OF THE TRIBUNAL WITH REGARD THE ABOVE ISSUE WAS NOT CHALLENGED BEFORE THE HONBLE HIGH COURT WHILE FILING APPEAL FOR THE AY.2005 - 06. 7.2. WE ARE OF THE OPINION THAT THE ISSUE, REGARDING ELIGIBILITY FOR THE DEDUCTION U/S. 10 A /10B OF THE ACT, HAS ATTAINED FINALITY, AS THE DEPARTMENT HAD ACCEPTED THE ORDER OF THE TRIBUNAL FOR THE ID ENTICAL ISSUE IN THE AY.2005 - 06.WE WOULD LIKE TO REPRODUCE THE RELEVANT PART OF THE ORDER OF THE TRIBUNAL FOR THE THAT AY.(SUPRA)AND SAME READS AS UNDER: 2.REVENUE HAS RAISED THE FOLLOWING TWO GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN ALLOWING RS.6,83,96,212/ - AS PROFITS E LIGIBLE FOR DEDUCTION U/S. 10A/10B THOUGH THE SAME WERE NOT DERIVED FROM EXPORT OF COMPUTER SOFTWARE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN NOT ALLOWING SET OFF OF LO SSES BEFORE COMPUTING DEDUCTION U/S. 10A/10B OF RS.72,22,846/ - WITHOUT APPRECIATING THE FACTS OF THE CASE. 3.WITH REFERENCE TO GROUND NO. 1 THE LEARNED D.R. HAS SUBMITTED THE CIT(A) HAS ERRED IN GRANTING DEDUCTION UNDER SECTION 10A ON THE AMOUNT OF EXPEND ITURE REIMBURSEMENT AS IT HAS NO DIRECT NEXUS WITH THE ASSESSEE EXPORT ACTIVITY AND IT BEING AN INDEPENDENT CONCERN OF THE ASSESSEE FOLLOWING THE PRINCIPLES LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF LIBERTY INDIA 317 ITR 218 (SC) THE AMOUNT CAN NOT BE CONSIDERED AS DERIVED FROM THE EXPORT ACTIVITY FOR THE PURPOSE OF SECTION 10A/10B. IT WAS FURTHER SUBMITTED THAT RECEIPTS ARE NOT PART OF THE EXPORT ACTIVITY AND RECEIVED BY WAY OF REIMBURSEMENT OF EXPENDITURE INCURRED FOR SISTER CONCERN, WHICH IS N OT THE MAIN ACTIVITY OF THE ASSESSEE. HE REFERRED TO THE AGREEMENT WITH THE GROUP CONCERN AND SUBMITTED THAT THE AMOUNT CANNOT BE ALLOWED AS DEDUCTION AS THE PROFIT GENERATED OUT OF THE COST CUTTING ALSO SHOULD BE CONSIDERED AS HAVING NO FIRST DEGREE NEXUS WITH THE COST OF PURCHASE AND ACCORDINGLY THE SAME CANNOT BE CONSIDERED FOR DEDUCTION UNDER SECTION 10A FOLLOWING THE SAME PRINCIPLES ESTABLISHED BY THE HONBLE SUPREME COURT IN THE ABOVE REFERRED CASE. 4.THE LEARNED COUNSEL IN REPLY, HOWEVER, SUBMITTED T HAT THE ISSUE IS NOT THAT OF INDEPENDENT CONCERN OR CLAIM OF 10A. HE REFERRED TO THE ORDER OF THE A.O. AND ALSO TO THE ORDER OF THE CIT(A), PARTICULARLY PARA 3.6 TO SUBMIT THAT THE ASSESSEE WAS NEVER CHARGED THE EXPENDITURE TO THE P & L ACCOUNT. IT HAS SEP ARATELY ACCOUNTED FOR THE EXPENDITURE INCURRED ON BEHALF OF THE FOREIGN COMPANIES IN ITS BOOKS AND THE EXPENDITURE WAS REIMBURSED AT COST WITHOUT ANY PROFIT OR MARKUP. THIS EXPENDITURE WAS NETTED OFF IN THE BOOKS OF ACCOUNT AND IS NOT PART OF THE CLAIM OF EXPENDITURE IN THE P & L ACCOUNT. THE CIT(A) HAS CORRECTLY ANALYSED THE FACTS IN THE ORDER AND THEN ALLOWED THE AMOUNT. IT WAS FURTHER SUBMITTED SIMILAR ISSUE HAS ARISEN IN EARLIER YEARS IN ASSESSEES OWN CASE IN ITA NO. 3859 & 3534/MUM/2006 FOR THE A.Y. 2 002 - 03 AND THE ITAT CONFIRMED THE ORDER OF CIT(A) AND THE REVENUE HAS NOT RAISED THE ISSUE BEFORE THE HON'BLE BOMBAY HIGH COURT AND HAS ACCEPTED THE ORDERS OF THE ITAT. EVEN THE ISSUE WHICH WAS CONTESTED BEFORE THE HON'BLE HIGH COURT WAS ALSO DISMISSED, WH ICH IS ON THE FOREIGN EXCHANGE GAINS FOR THE PURPOSE OF SECTION 10A. IN VIEW OF THE ABOVE IT WAS SUBMITTED THAT THE ORDERS OF THE CIT(A) ARE TO BE UPHELD. 5.WE HAVE CONSIDERED THE ISSUE. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THE ORDER OF THE CIT(A) IS TO BE UPHELD. THE ORDER IS AS UNDER: - 3.9 I HAVE GONE THROUGH THE FACTS OF THE CASE, SUBMISSION MADE AND ALSO THE ORDER OF THE AO. AT THE SAME TIME, I HAVE ALSO PERUSED THE APPELLATE ORDERS OF EARLIER YEA RS IN APPELLANTS OWN CASE ON SIMILAR GROUNDS. I HAVE NOTED THAT ON A DETAILED EXAMINATION OF FACTS FOR A.Y. 2002 - 03, THE CIT(A) - XXIX, MUMBAI VIDE HIS ORDER NO. CIT(A) - XXIX/DCIT - C8(3)/IT - 184/2004 - 05 DATED 31.03.2006 HELD THAT THE COMPANY HAS INCURRED COSTS UNDER VARIOUS HEADS OF EXPENSES SUCH AS ON THE OFFICE OF GLOBAL COO LIKE SALARIES, WELFARE, TELEPHONE, TRAVELLING, VEHICLE ETC AND CLAIMED THAT THESE EXPENSES HAVE BEEN SHARED WITH M/S. SYNTEL INC AND M/S SYNTEL EUROPE ON ACTUAL TIME SHARING BASIS AND THE RE IS NO PROFIT MARKUP. THIS ASPECT OF APPELLANTS CASE WAS ALSO EXAMINED BY THE ADDL. 6589 - SYNTEL LTD . 11 CIT (TRANSFER PRICING - II), MUMBAI. IT IS SEEN FROM THE ORDER U/S. 92CA(3) OF THE ACT OF THE ABOVE ASSESSMENT YEAR PASSED BY THE ADDL. CIT, MUMBAI THAT THE AO [TRANSFER P RICING - II] HAS OBSERVED THAT THE BASIS OF ALLOCATION, THAT IS TIME SPENT FOR THE RESPECTIVE ENTITY WAS FAIR AND, THEREFORE, SHE ACCEPTED THE RECOVERY MADE BY THE APPELLANT IN THIS REGARD. IN VIEW OF THE ABOVE, MY PREDECESSOR HAS HELD THAT THERE IS NO PROFI T OR MARKUP ON THE AFORESAID RECOVERIES AND, THEREFORE, SAME CANNOT BE TREATED AS INCOME. AS REGARDS OTHER COST REIMBURSEMENTS, MY PREDECESSOR HAS ALSO OBSERVED THAT THE SAME REPRESENTS AMOUNT SPENT FOR AND ON BEHALF OF M/S. SYNTEL INC. AND OTHER ENTITIES. THESE EXPENSES ARE UNDER VARIOUS HEADS. THE COST INCURRED ON BEHALF OF M/S. SYNTEL INC. AND OTHER ENTITIES ARE TRACKED SEPARATELY AND RECOVERED AT THE END OF THE MONTH FROM THE RESPECTIVE ENTITIES ON ACTUAL BASIS WITHOUT ANY MARKUP. IN VIEW OF THE DETAILE D EXAMINATION OF FACTS, MY PREDECESSOR HAD DECIDED THIS GROUND IN FAVOUR OF THE APPELLANT FOR A.Y. 2002 - 03. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAS ALSO FILED THE COPY OF THE ORDER OF ITAT, E - BENCH IN ITA NO. 3534/MUM/06 DATED 06.01.2 009 FOR A.Y. 2002 - 03 IN APPELLANTS OWN CASE. WHILE DECIDING THE ISSUE, THE HON'BLE ITAT, MUMBAI REJECTED THE DEPARTMENTAL APPEAL AND CONFIRMED THE ORDER OF MY PREDECESSOR AS AFORESAID. FACTS AND CIRCUMSTANCES BEING THE SAME AND IDENTICAL, FOLLOWING THE DE CISION OF MY PREDECESSOR AND CONFIRMED BY THE HON'BLE ITAT, MUMBAI, I DELETE THE ADDITION MADE BY THE AO IN RESPECT OF OTHER COST REIMBURSEMENTS AND SHARING OF EXECUTIVE COST AGGREGATING TO RS.6,83,96,212/ - . THESE GROUNDS ARE ALLOWED. 6.THE A.O. HAS DISAL LOWED THE DEDUCTION UNDER SECTION 10A/10B ON THE GROSS RECEIPTS NETTED OFF IN THE RESPECTIVE ACCOUNTS AFTER OBTAINING THE DETAILS OF THE LEDGER COPIES AND EXCLUDING THE SAME FROM COMPUTATION. IT WAS THE SUBMISSION THAT THIS AMOUNT WAS REIMBURSEMENT ON COST TO COST BASIS FOR THE SERVICES PROVIDED TO THE OTHER GROUP CONCERNS. THERE IS NO BASIS FOR ASSESSING OFFICERS EXCLUSION OF THE ABOVE RECEIPTS FROM COMPUTATION OF BUSINESS PROFIT AS THE ASSESSEE HAS NOT CLAIMED THE EXPENDITURE IN ITS P & L ACCOUNT AND THE SE AMOUNTS ARE NETTED OFF IN THE RESPECTIVE EXPENDITURE ACCOUNTS AND ONLY THE NET EXPENDITURE RELATED TO THE ASSESSEES BUSINESS WERE CLAIMED IN THE P & L ACCOUNT. IN VIEW OF THIS WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A), WHO ANALYSED THE FACTUAL MATRIX OF THE ASSESSEES CLAIMS AND ARRIVED AT THE CORRECT CONCLUSION, DOES NOT REQUIRE ANY MODIFICATION. SIMILAR ISSUE IN EARLIER YEARS WAS ALSO HELD IN FAVOUR OF THE ASSESSEE, AS SUBMITTED, AND THE DEPARTMENT HAS NOT CHALLENGED THE FINDINGS OF THE ITAT EVEN THOUGH THAT ORDER WAS TAKEN UP IN APPEAL ON ANOTHER ISSUE, WHICH ALSO WAS DISMISSED. IN VIEW OF THIS THERE IS NO MERIT IN THE REVENUES GROUND. ACCORDINGLY THE SAME IS DISMISSED. FOLLOWING THE ABOVE, WE DECIDE GROUND NO.1 AGAINST THE AO. 8. SECOND GRO UND IS ABOUT DIRECTING THE AO TO ALLOW DEDUCTION ON DELAYED PAYMENT OF EMPLOYER AND EMPLOYEE'S CONTRIBUTION TO P.F MADE WITHIN GRACE PERIOD. THE AO HAD NOT ALLOWED THE CLAIM MADE BY THE ASSESSEE WITH REGARD TO PAYMENT OF EMPLOYER AND EMPLOYEES CONTRIBUTION TO THE P F ACCOUNTS. 8.1. DURING THE APPELLATE PROCEEDINGS,THE FAA FOUND THAT THE ASSESSEE HAD MADE PAYMENTS WITHIN THE GRACE PERIOD.IN OUR OPINION,THERE IS NO LEGAL INFIRMITY IN THE ORDER OF THE FAA.THEREFORE, CONFIRMING HIS ORDER,WE DECIDE GROUND NO.2 AG AINST THE AO. 9. LAST GROUND PERTAINS TO DIRECTING NOT TO EX CLUDE RS.15,18,65,460/ - BEING RECOVERY OF UNDER - UTILIS ED HUMAN RESOURCES AND OTHER COST RECOVERIES FROM THE PROFIT OF BUSINESS FOR THE PURPOSE OF ALLOWING DEDUCTION U/S. 10A/10B OF THE ACT . 9.1. W HILE DECIDING THE GROUND NO.1,FILED BY THE AO FOR THE YEAR UNDER APPEAL,WE HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE .FOLLOWING THE ORDERS OF THE TRIBUNAL FOR AY.2002 - 03 (SUPRA),ON THE ISSUE BEFORE US,WE DISMISS GROUND NO.3 RAISED BY THE AO. ITA NO .1069/MUM/2008, A Y. - 2004 - 05: 6589 - SYNTEL LTD . 12 10. FOLLOWING OUR ORDER ON THE ISSUES OF UNDER - UTILISED DEDICATED HUMAN RESOURCES,GRC COST AND THE ELIGIBILITY OF INTEREST INCOME FOR CLAIMING DEDUCTION U/S.10A/10B OF THE ACT,FOR THE AY. 20 03 - 04,WE DECIDE GROUNDS NO.1 - 3, RAISED BY THE ASSESSEE FOR THE YEAR UNDER APPEAL, IN ITS FAVOUR. LAST GROUND OF APPEAL IS ALLOWED FOR STATISTICAL PURPOSES,FOLLOWING OUR ORDER FOR THE AY.2003 - 04. ITA NO.2263/MUM/2008, AY . - 2004 - 05: 11.FIRST TWO GROUNDS OF APPEAL ARE ABOUT DISALLOWANCE TO BE CALCU LATED FOR DEDUCTION U/S.10A/ 10B/80HHE OF THE ACT. WHILE DECIDING THE FIRST GROUND OF APPEAL OF THE APPEAL FILED BY THE AO FOR THE AY.2003 - 04,WE HAVE FOLLOWED THE ORDER OF THE TRIBUNAL ON THE IDENTICAL ISSUE DECIDED BY IT FOR THE AY.2005 - 06 AND HAVE DECIDED GROUND NO.1 AGAINST THE AO.FOLLOWING OUR ORDER FOR THE AY.2003 - 04(AT PARAGRAPH NO. 7 TO 7.2)WE DISMISS BOTH THE GROUNDS RAISED BY THE AO FOR THE YEAR UNDER APPEAL. 12. LAST GROUND RAISED BY THE AO IS ABOUT CALCULATION OF INTER EST INCOME FOR DEDUCTION U/S. 10 A/ 10B OF THE ACT.WE FIND THAT WHILE DECIDING THE ISSUE OF ELIGIBILITY OF INTEREST INCOME FOR THE EARLIER YEAR AND IN THE APPEAL FILED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION,WE HAVE DECIDED THE ISSUE AGAINST THE AO AND IN FAVOUR OF THE ASSESSEE . FOLLOWING THE SAME,GROUND NO.3 IS DECIDED AGAINST THE AO. ITA NO.7391/MUM/2010 - AY.2006 - 07 13. FIRST GROUND OF APPEAL IS ABOUT ELIGIBILITY FOR DEDUCTION U/S.10A/10B OF THE ACT.WE HAVE DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE EARLIER P ART OF OUR ORDER. FOLLOWING THE SAME GROUND NO.1 IS DECIDED AG AINST THE AO. 14. THE SECOND EFFECTIVE GROUND OF APPEAL DEALS WITH ELIGIBILITY OF INTEREST INCOME FOR DEDUCTION CLAIMED U/S.10A/10B OF THE ACT.IN THE ORDERS OF THE EARLIER AY.S.,WE HAVE ADJUDICA TED THE ISSUE OF CALCULATION OF INTEREST INCOME FOR DEDUCTION U/S.10A/10B AND DECIDED THAT SAME IN FAVOUR OF THE ASSESSEE .FOLLOWING THE SAME,GROUND NO.2 IS DECIDED AGAINST THE AO. ITA/6589/MUM/2011 - / AY.2007 - 08: 15. GROUNDS NO.1 & 3 DEAL WITH DISALLOWANCE MADE BY THE AO U/S.14 A OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT ASSESSEE HAD SHOWN TO HAVE HELD THE INVESTMENTS OF RS.18.09 LAKHS AND 13.70 LAKHS AS ON LAST DAY OF MARCH 2006 AND 2007 RESPECTI VEL Y,THAT IT HAD NOT INCURRED ANY EXPEND ITURE TO CARRY OUT THE ACTIVITY OF MAKING EXEMPT INCOME BEARING INVESTME - NT.HE WAS OF THE OPINION THAT SOME KIND OF EXPENDITURE WAS NECESSARY TO MAKE INVESTMENTS, THAT THE ARGUMENT OF THE ASSESSEE THAT NO EXPENDITURE WAS INCURRED TO EARN EX EMPT INCOME WAS NOT ACCEPTABLE. ACCORDINGLY,THE AMOUNT OF EXPENDITURE DISALLOWABLE U/S. 14A OF THE ACT IN RELATION TO SUCH INCOME WAS DETERMINED AT 0.5% OF THE AVERAGE VALUE OF INVESTMENT.HE MADE A DISALLOWANCE TO RS.5,950/ - . 15.1. AGGRIEVED BY THE ORDER OF THE AO THE ASSE SSEE PREFERRED AN APPEAL BEFORE THE FAA.IT WAS POINTED OUT BY THE ASSESSEE THAT THERE WAS AN ARITHMETICAL ERROR IN THE CALCULATION MADE BY THE AO,THAT FOLLOWING THE METHOD ADOPTED BY THE AO THE DISALLOWANCE SHOULD BE HAVE BEEN 54,49,923/ - .AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ,HE HELD THAT RULE 8D OF THE INCOME TAX RULES,1962 WAS APPLICABLE.HE DIRECTED THE AO TO COMPUTE DISALLOWANCE AT RS.46.12 LAKHS INSTEAD OF RS.5,950/ - . 15.2. BEFORE US,THE AR STATED THAT PROVISIONS OF RULE 8D WERE NOT APPLICABL E FOR AY.2007 - 08,THAT 6589 - SYNTEL LTD . 13 THE ASSESSEE HAD EARNED DIVIDED INCOME OF RS.13,870/ - ONLY DURING THE YEAR,THAT THE DISALLOWANCE U/S.14A CANNOT EXCEED EXEMPT INCOME.HE RELIED UPON THE CASE OF JOINT INVESTMENT PV T .LTD. (ITA 117 OF 2015,DATED 25.02.2015 ) ,OF HONBLE DELH I HIGH COURT.DR LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 15.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE ASSESSEE EARNED DIVIDEND INCOME OF RS.13,870/ - ,THAT THE FAA MADE A DISALLOWANCE OF RS.54.49 LAKHS,TH AT THE AY.UNDER APPEAL IS PRIOR TO AY.2008 - 09.IN PURSUANCE OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT,WE HOLD THAT PROVISIONS OF RULE 8D OF THE INCOME TAX RULES,1962 ARE APPLICABLE FROM AY.2008 - 09 ONLY.THEREFORE,IN OUR OPINION THE CALCULATION MADE BY THE AO ADOPTING THE FORMULA SUGGESTED BY RULE 8D CANNOT BE ENDORSED. RESPECTFULLY,FOLLOWING THE JUDGMENT OF THE HONBLE DELHI HIGH COURT DELIVERED IN THE CASE OF JOINT INVESTMENT PVT. LTD. (SUPRA) WE HOLD THAT THE DISALLOWANCE SHOULD NOT EXCEED EXEMPT INCOME . CONSIDERING THE ABOVE, WE DECIDE GROUNDS NO.1 & 3 IN FAVOUR OF THE ASSESSEE . 16. SECOND GROUND OF APPEAL DEALS WITH DEDUCTION UNDER SECTION 10A/10B OF THE ACT. BEFORE US, THE AR STATED THAT THE GROUND WAS OF CONSEQUENTIAL NATURE.HENCE,WE ALLOW IT FOR STATISTICAL PURPOSES. ITA/6742/MUM/2011.AY. - 2007 - 08 : 17. EFFECTIVE GROUND OF APPEAL IS ABOUT ALLOWING INTEREST INCOME OF RS.11,90,24,116/ - AS PROFITS ELIGIBLE FOR DEDUCTION U/S.10A/ 10B OF THE ACT.WHILE DECIDING THE APPEAL FOR THE AY.2003 - 04, FILED BY THE AO,WE HAVE DECIDED THE ISSUE AGAINST HIM.FOLLOWING THE SAME, GROUNDS NO.1 - 2 ARE DISMISSED. ITA/ 6885/MUM/2012.AY.,2008 - 09 : 18. EFFECTIVE GROUND OF APPEAL FOR THE YEAR UNDER APPEAL IS IDENTICAL TO THE GROUNDS NO.1 AND 2 OF THE GROUNDS FOR THE EARLIER YEAR.FOLLOWING OUR ORDER FOR THAT YEAR,WE DECIDE BOTH THE GROUNDS AGAINST THE AO. AS A RESULT,APPEAL S OF THE ASSESSEE ARE PARTLY ALLOWED AND THE APPEALS OF THE AO STAND DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST,2015. 31 ST , 2015 SD/ - SD/ - ( . . /A. D. JAIN) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 31 . 08 . 2015 . . . JV . SR.PS. 6589 - SYNTEL LTD . 14 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENC H, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.