Pune ITAT rules that
assessee is entitled to Sec 10A deduction on additional income offered on
account of suo-moto TP-adjustment for AY 2011-12; Notes that TPO/ CIT(A)
disallowed the deduction u/s 10A as assessee failed to bring into country the
export proceeds in foreign exchange as contemplated in Explanation 2 to Sec 10A
in respect of such additional income offered; However, ITAT opines that the
additional income was artificial/ notional income computed u/s 92(1) and it was
neither export turnover nor total turnover but in fact profits of business u/s
10A(4), states that “in the absence of it being offered as export turnover or
total turnover, then there could not be any condition for getting foreign
exchange to India”; Further noting that additional income was offered to tax as
business profits, opines that “... it forms part of profits of business and
while computing the deduction under section 10A(4) of the Act, the said profits
have to be taken into consideration”; Relies on Bangalore ITAT ruling in iGate
Global Solutions allowing Sec 10A deduction in respect of suo-moto
TP-adjustment (subsequently confirmed by Karnataka HC) and states that Mumbai
ITAT ruling in Deloitte Consulting India taking a contrary view would not stand
in view of ratio laid down by Karnataka HC, clarifies that “Though the said
decision is of non-jurisdictional High Court, but the same is binding on the
Tribunal in the absence of any contrary decision of the jurisdictional High
Court”; Also holds that proviso to Sec 92C(4) [which inter alia provides that
no deduction u/s 10A shall be allowed in respect of such amount of income, by
which the total income of assessee had been enhanced after computation of ALP
of international transactions] will not be applicable in such cases:ITAT:ITAT
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