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| The Tax Publishers2020 TaxPub(DT) 1412 (Pune-Trib) INCOME TAX ACT, 1961
Section 10A
AO not having proved that any arrangement was arrived at between parties which resulted in higher profits, was not justified to re-work profits by AO by invoking section 10A(7) read with section 80-IA(10).
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Deduction under section 10A - Computation - AO restricted assessee's claim holding that assessee earned more than ordinary profit in the eligible business - No material or evidence referred to in the assessment order to indicate that course of business had been so arranged so as to inflate profits
Assessee claimed deduction under section 10A. AO restricted assessee's claim holding that assessee earned more than ordinary profit in the eligible business in respect of Software Design Engineering Services and deduction had to be restricted to the ordinary profit earned by comparable companies in view of section 10A(7).Held: No doubt, there was a close connection between assessee and associated enterprises and to that extent section 10A(7) read with section 80-IA(10) had been rightly examined by AO. However, there was no material or evidence referred to in the assessment order to indicate that course of business had been so arranged so as to inflate profits with intent to abuse tax concession under section 10A. Consequently, re-working of the profits by AO by invoking section 10A(7) read with section 80-IA(10) was not justified.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
section 92C
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