Pr. CIT vs. E-Funds International India Pvt Ltd (Delhi High Court)

(i) While an AO may not be entitled to grant a deduction or an exemption on the basis of a revised computation of income, there was no such fetter on the appellate authorities. This was recently reiterated by this Court in a decision dated 25th August 2015 in ITA No. 644/2015 (Pr. Commissioner of Income Tax-09 v. Western India Shipyard Limited). In Commissioner of Income Tax v. Sam Global Securities Ltd. (2014) 360 ITR 682 (Del), this Court pointed out that the power of the Tribunal in dealing with appeals was expressed in the widest possible terms and the purpose of assessment proceedings was to assess the correct tax liability. The Court noted that “Courts have taken a pragmatic view and not a technical view as what is required to be determined is the taxable income of the Assessee in accordance with law.” In M/s. Influence v. Commissioner of Income Tax 2014-TIOL-1741-HC-DEL-IT a similar approach was adopted when the AO in that case refused to accept the revised computation submitted beyond the time limit for filing the revised return under Section 139(5) of the Act. This Court noted that the decision in Goetze (India) Ltd. v. Commissioner of Income-Tax [2006] 284 ITR 323 (SC) “would not apply if the Assessee had not made a new claim but had asked for re-computation of the deduction.” (Commissioner of Income Tax v. Jai Parabolic Springs Ltd. (2008) 306 ITR 42 and the decision of Bombay High Court in Commissioner of Income Tax v. Pruthvi Brokers & Shareholders (P) Ltd. (2012) 349 ITR 336 (Bom) referred);

(ii) Making of a claim under Section 80HHE of the Act in one assessment year will not preclude an Assessee from claiming the benefit under Section 10A of the Act in respect of the same unit in a succeeding assessment year. The purpose of the Section 80HHE(5) of the Act was to avoid double benefit but that would not mean that if for a particular assessment year the Assessee wants to claim a benefit only under Section 10A of the Act and not Section 80HHE, that would be denied to the Assessee. (Commissioner of Income Tax v. Interra Software India (P) Ltd. (2011) 238 CTR (Del) 23, Commissioner of Income-tax v. Damco Solutions (P) Ltd. [2011] 11 taxmann.com 365 (Del) and Commissioner of Income Tax v. EDS Electronics Data Systems (India) (P) Ltd. (2013)89 DTR (Del) 182 followed)