COMMISSIONER OF INCOME TAX Vs. ALLSEC TECHNOLOGIES LTD

JUDGEMENT

(1.) Challenging the order passed in I.TA.No.1104/Mds/2014 in respect of the Assessment Year 2007-08 on the file of the Income Tax Appellate Tribunal, Chennai, "A" Bench, the Revenue has filed the above appeal.

(2.) The assessee is a "Limited" Company, engaged in the business of data and call center operations. On 31.10.2007, it had filed return, admitting "NIL" income, after claiming entire receipts of Rs.24,65,53,064/- as "exempt" under Section 10A. The return was summarily processed and on 30.11.2010, the Assessing Officer completed the regular assessment, computing total income of Rs.2,68,12,244/-. The Assessing Officer relied upon Section 10A(2)(iv) to observe that the communication expenditure of Rs.13,20,70,025/- incurred in foreign exchange as well as Indian Rupees had to be excluded in full sum in former and 50% of the latter instance. Similarly, he also made disallowance of Rs.19,45,688/- under Section 14A read with 8D qua dividend income of Rs.3,13,01,555/-. The Assessing Officer had also proceeded to set off the assessee's brought forward losses prior to allowing deduction under Section 10A instead of post facto computation. Challenging the order of assessment, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) and the Appellate Authority partly allowed the appeal. Challenging the order of Commissioner of Income Tax (Appeals), the Revenue preferred an appeal before the Income Tax Appellate Tribunal and the Tribunal restored the impugned disallowance made by the Assessing Officer and directed the Assessing Officer to consider the assessee's case under Section 10A while passing his consequential order. Challenging the order of the Income Tax Appellate Tribunal, the Revenue has filed the above appeal.

(3.) The above Tax Case Appeal was admitted on the following substantial questions of law: