The Tax Publishers2020 TaxPub(DT) 5584 (Bang-Trib)

INCOME TAX ACT, 1961

Section 10A

Deduction under section 10A was allowable because this was offered by assessee itself as Voluntary T. P. Adjustment and therefore, this issue in principle was covered in favour of the assessee but on this factual aspect about Prior Period Expenses for financial year 2008- 09 reported by assessee in Schedule 8 of the Audited Accounts for financial year 2009-10 this was not clear as to whether these expenses or any part of these expenses is related to Prior Period income reported in same Schedule 8 of the Audited Accounts for financial year 2009–10, therefore, matter was remanded back to AO for fresh consideration.

Deduction under section 10A - Voluntary TP Adjustment - Remand of matter -

AO disallowed the claim of assessee for deduction under section 10A made by assessee as per revised return of income filed. It was contended that this income was offered to tax in the present year in the Revised Return of Income as Voluntary TP Adjustment and it was reduced from the total prior period income in assessment year 2010-11. Paper book is the relevant Schedule 8 for financial year 2009-10 where total Prior Period Income was reported for various years relevant to the present assessment year 2009-10. At this juncture, the Bench pointed out that in the same Schedule 8 for financial year 2009-10, there are Prior Period Expenses also reported for those very years for which period income was reported and such Prior Period Expenses also included for financial year 2008-09, i.e., for the present assessment year 2009 - 10 and therefore, how the entire prior period income for this year reported can be accepted as eligible for deduction under section 10A. Held: In principle, deduction under section 10A was allowable because this was offered by assessee itself as Voluntary TP Adjustment and therefore, this issue in principle was covered in favour of the assessee. But, on this factual aspect about Prior Period Expenses for financial year 2008-09 reported by assessee in Schedule 8 of the Audited Accounts for financial year 2009-10 this was not clear as to whether these expenses or any part of these expenses is related to Prior Period income reported in same Schedule 8 of the Audited Accounts for financial year 2009-10 because if the same is related then actual income on this account will be less and then only actual such income can be considered for deduction under section 10A. Therefore, matter was remanded back to AO for fresh consideration.

Relied:Dy. CIT v. EYBGS India Pvt. Ltd. 2020 TaxPub(DT) 2238 (Bang-Trib)Approva Systems Pvt. Ltd. v. Dy. CIT 2018 TaxPub(DT) 1449 (Pune-Trib).

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2009-10



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