COMMISSIONER OF INCOME TAX C.R. BUILDING, QUEENS ROAD, BANGALORE, THE DEPUTY COMMISSIONER OF INCOME TAX SPECIAL RANGE-15 BOMBAY AND DY. COMMISSIONER OF INCOME-TAX, CIRCLE 11 (3), RASHTROTHANA BUILDING, NRUPATHUNGA ROAD, BANGALORE Vs. M/S H.P. G

JUDGEMENT

(1.) THESE four appeals by the Revenue arise out of the assessment orders passed by the Assessing Officer in respect of the respondent -assessee, an Indian Company, for the assessment years 1995 -96, 1996 -97, 1997 -98 and 1998 -99 respectively. All these four appeals involve common questions which had been noticed as under when the appeals were admitted for examination on 5.9.2007. 1. Whether the Tribunal is correct in holding that in accordance with Section 80I(9) of the Act, the Assessing Officer has to adduce evidence and assign reasons cogently and assign reasons for invoking the Section and cannot just presume the existence of close connection/arrangement for the purpose of invoking Section 80I (9) of the Act.

(2.) WHETHER the Tribunal is correct in holding that in accordance with Section 80I(9) read with Section 10A(6) the assessee and its supplier Digital Group Worldwide/Oeas need not actually maintain books separately but deciphering the profit would be sufficient compliance.

(3.) THE assessee is a Indian Company and carries on the business of manufacture of hardware and software and exports its products, both hardware and software. While the first question relating to the entitlement claimed by the assessee under the provisions of Section 10A of the Income Tax Act, 1961 (for short hereinafter referred to as 'the Act') is in respect of the two units which are involved in creation of software and which is exported, the second question relating to MODVAT credit, which the assessee had claimed, as available to it at the end of the accounting period and as reflected in his books of accounts as unutilised MODVAT credit, is a question which arises in general and in respect of entire manufacture and trading activity of the assessee.