This case between the Assistant Commissioner of Income Tax, Circle-5(1), New Delhi, and Birlasoft India Ltd. centers on the tax disputes for the Assessment Year 2008-09, with crucial aspects involving the application of section 10A deductions and the setting off of losses from Software Technology Park (STP) units against profits from non-STP units.
The original assessment was completed under section 143(3) read with section 144C on 22 October 2012, where the total income was adjusted significantly, leading to disputes. The Income Tax Appellate Tribunal (ITAT), after a series of appeals and revisions, based their decision on precedents set by the Supreme Court, particularly in the case of CIT vs. Yokogawa India Ltd.
The Tribunal noted the Commissioner of Income Tax (Appeals)’s decision to allow deductions under section 10A before the aggregation of income, which was in line with the Supreme Court’s directives. This ruling favored the taxpayer, Birlasoft India Ltd., allowing them to set off their losses from eligible STP units against the profits from other units, an issue central to the dispute.
The ITAT upheld the CIT(A)’s decision, rejecting the Revenue’s appeal, which sought to overturn these deductions and the setting off of losses. The decision underscores the application of judicial precedents and statutory provisions concerning tax deductions and the treatment of losses in the computation of taxable income.
Tax Dispute Resolution between ACIT and Birlasoft India for AY 2008-09
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