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Showing contexts for: gem plus in Lionbridge Technologies P. Ltd, Navi ... vs Asst Cit 15(2)(1), Mumbai on 17 May, 2017Matching Fragments
05. The DRP referring to the directions given to the AO in the case of the assessee for A.Y. 2008-09 therein relied on the order of the Hon'ble High Court of Bombay in the case of : M/s Gem Plus Jewellery Ltd. (ITA No. 2426 of 2009), wherein the Hon'ble High Court had observed that in case of exclusion of some items from the 'export turnover', the same should also be excluded from the 'total turnover' while computing the deduction under Sec. 10A. The DRP thus following the direction of the DRP and ITAT in the case of the assessee for the preceding year, and going by the principle laid down by the Hon'ble High Court in the case of : Gem Plus Jewellery (supra), therein directed the A.O to exclude the amount of foreign currency expenses from the 'total turnover'.
(ii). That as regards the disallowance of Foreign Exchange Gain of Rs. 24,51,796/- by the A.O for the reason that the same were not derived from the export activities of the assessee and were therefore not eligible for computation of deduction u/s 10A, it was observed by the DRP that the issue had been decided by the ITAT in the case of the assessee for A.Y. 2008-09, wherein the A.O was directed to allow the claim of the assessee towards deduction u/s 10A on the profit of the assessee as modified by the disallowance made on account of P a g e | 13 foreign exchange loss in view of the judgment of the Hon'ble High Court of Bombay in the case of : Gem Plus Jewellery (supra). The DRP thus following the aforesaid order of ITAT in the assesses case for A.Y. 2008-09, therein directed the A.O to follow the same and apply the judgment of the Hon'ble Jurisdictional High Court in the case of Gem Plus Jewellery (supra).
9. The DRP further declined to give any direction in respect of the objections raised by the assessee, both as regards the charging of interest u/s 234B and initiation of penalty u/s 271(1)(c) by the A.O, for the reason that the same were not related to any variation in income of the assessee, and hence beyond the powers of the DRP for giving any direction.
BEFORE THE A.O :
10. The A.O after receiving the order of the DRP, wherein the latter after considering the objections raised by the assessee as regards the adjustment of Rs. 10,82,06,652/- suggested by the TPO in respect of the ALP of the international transactions carried out by the assessee with its AE's, therein vide its order dated. 16.12.2015 revised the TP adjustment to Rs. 10,49,16,556/-. The A.O further giving effect to the directions of the DRP as regards exclusion of the foreign currency expenses of Rs. 13,59,86,441/- from the 'Total turnover', therein took both the 'Total turnover' and the 'Export turnover' at Rs. 84,86,37,343/-. The A.O going by the directions of the DRP, followed the judgment of the Hon'ble High Court of Bombay in the case of Gem Plus Jewellery (supra) therein held that the 'Foreign Exchange Gain' of Rs. 24,51,796/- was entitled for claim of deduction u/s 10A P a g e | 14 of the 'Act'. The A.O thus giving effect to the directions of the DRP, recasted the claim of the assessee towards deduction u/s 10A at Rs. 13,03,30,713/-. The A.O after deliberating on the aforesaid issues, therein assessed the income of the assessee at Rs. 11,75,13,487/- as per the normal provisions, while for computed the 'Book Profit' u/s 115JB at Rs. 11,04,22,963/- and computed the tax liability on the same at Rs. 1,98,76,133/-. That as the tax liability of the assessee under the normal provisions was more than that as per Sec. 115JB, therefore the A.O computed the tax liability of the assessee in accordance with the normal provisions of the 'Act'.
24. We find that the DRP following the direction of the DRP and ITAT in the case of the assessee for the preceding year, and going by the principle laid down by the Hon'ble High Court in the case of :
Gem Plus Jewellery (supra), had therein rightly directed the A.O to exclude the amount of foreign currency expenses from the 'total turnover'. We are of the considered view that the DRP going by the principle laid down by the Hon'ble High Court in the case of : Gem Plus (supra), had therein rightly directed the A.O to compute the assesses claim towards deduction u/s 10A after excluding the 'foreign currency expenses' from the 'total turnover'. We thus not finding any infirmity in the order of the DRP, therein uphold the same. The Ground of appeal No. 1 so raised by the revenue before us is thus dismissed.