Company formed by reconstruction cannot be qualified for claiming deduction under sec 10A

Last updated: 22 March 2012

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
The facts which revealed from the records are as under. The assessee company is engaged in the business of providing business process management, transitioning services, BPO services to its clients. The assessee is carrying out the said activity from its unit at Navi Mumbai as Software technology Parks (STP). The assessee is wholly owned subsidy of M/S. Hexaware Technologies Ltd. (in short referred to as HTL). The HTL appellant company is engaged also in software development and related services and it has been operating through registered STP and also eligible for deduction u/s.10A of the Act. The assessee’s case for the A.Y. 2005-06 was selected for scrutiny and assessment was completed u/s.143(3). The A.O. has noted that the assessee was incorporated on 14th May, 2004 and A.Y. 2005-06 is first year of its operation. The assessee had claimed deduction of Rs.1,22,23,849/- u/s.10A of the Act. The A.O. has a serious reservation for allowing the claim of deduction to the assessee u/s.10A of the Act. The A.O. sought the explanation of the assessee to justify the claim of deduction u/s.10A. The A.O. has noted that the assessee company is 100% subsidiary of M/s. Hexaware Technologies Ltd., India. M/s. Hexaware Technologies Inc., USA is another subsidiary of the parent company. The assessee has transactions with the holding company as well as fellow subsidiary. As noted by the A.O Mr. Ashok S. Bildikar is a President and Executive Director and is a Key Management Personnel. The A.O

Citation :
Income-tax Officer Wd.10 (3) (4),Room No.452, Aayakar Bhavan,4th Floor, M.K. Marg, Mumbai -400 710.....…. Appellant Vs Caliber Point Business Solutions Ltd.,Bldg. No.3, MBP, TTC Indl. Area,Sector-2, Mahape,Navi Mumbai -400 710.....… Respondent