The Income Tax Appellate Tribunal (ITAT), Bangalore Bench remitted the matter to AO for re-computation of deduction allowable under section 10A of the Income Tax Act.
The assessee company, Wipro GE Healthcare Private Limited is engaged in the business of manufacture, sale and service of medical diagnostic equipment and accessories. It is also engaged in software development and trading in various products.
The grounds of appeal urged by the assessee in all the three years relate to the issue in respect of re-computation of deduction allowable under section 10A of the Act.
It was the submission of the assessee that the ITAT, in the earlier round, had restored the issue of transfer pricing adjustment made in respect of Royalty payment only. However, while giving effect to the order of the ITAT, the AO has exceeded his jurisdiction by altering the deduction allowed under section 10A of the Act.
It was further contended that the assessee was not given an opportunity by the AO in this regard and the CIT(A) has also upheld the action of the Assessing Officer, without considering the jurisdictional aspect.
The assessee submitted that it is well settled principle that the deduction under section 10A is allowed at undertaking level and not at entity level.
However, CIT(A) has considered the profits available at entity level while adjudicating this issue, which is not the correct proposition of law.
The Coarm headed by the Vice President, N.V.Vasudevan set aside the order passed by CIT(A) on this issue in all the years under consideration and restored the same to the file of the AO.
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