Income Tax Appellate Tribunal Hyderabad Semantic Space Technologies Ltd, ... vs Assessee on 31 March, 2010 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH 'B', HYDERABAD BEFORE SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER. ITA No.824/Hyd/2010 (Assessment Year 200607) M/s. Semantic Space V/s Dy. Commissioner of Incometax, Technologies Ltd., Hyderabad Circle 3(1), Hyderabad. (PAN AAGCS 6868 P ) (Appellant) (Respondent) AND ITA No.915/Hyd/2010 (Assessment Year 200607) Asst. Commissioner of Income V/s M/s. Semantic Space Technologies tax, Circle 3(1), Hyderabad. Ltd., Hyderabad (PAN AAGCS 6868 P ) (Appellant) (Respondent) Assessee by : Shri C.S.Subrahmanyam & Shri V.Sivakumar Department by : Shri Harilal Naik Date of Hearing 29 2.2012 Date of Pronouncement 7.3.2012 ORDER Per D.Karunakara Rao, Accountant Member: These crossappeals for the assessment year 200607 are directed against the order of the Commissioner of Incometax(Appeals) IV, Hyderabad dated 31.3.2010. 2 ITA No.824 & 915/Hyd/10 M/s. Semantic Space Technologies Ltd., Hyderabad Revenue's Appeal ITA No.915/Hyd/2010 2. First effective ground of the Revenue reads as follows "2. The CIT(A) erred in inclusion of (i) misc. income (ii)credit Balance written back and notice period salary for the purpose of arriving deduction u/s. 10A." 3. At the outset, the learned counsel for the assessee mentioned that the issues relating to inclusion of (i) miscellaneous income (ii) credit balance written back; and (iii)notice period salary for the purposes of arriving at the deduction under S.10A of the Act, are covered by the order of this Tribunal dated 19th August, 2009 in assessee's own case in the crossappeals for the assessment year 200506, viz. in ITA Nos.397 and 536/Hyd/20008.. In this regard, the learned counsel took us through para 8 of the said order dated 19th August, 2009 for the proposition that miscellaneous income and the credit balance written back should be included in the profit eligible for computation of exemption under S.10A of the Act. We find that the said direction was given by the Tribunal, following the decision of the Mumbai Bench of the Tribunal in the case of Extrusion Processes (P)Ltd V/s. ITO (2007) 106 ITD 336. The Tribunal also noted that there is no decision to the contrary brought to its notice and finally decided the issue in favour of the assessee. We have considered the facts of the present case in relation to this issue and find that they are analogous to those considered by the Tribunal in the above decision for the preceding year. Therefore, we are of the opinion that the CIT(A) was justified in deciding this issue in favour of the assessee. We accordingly confirm the order of the CIT(A) on this issue. 4. Further, on the aspect of notice period salary, the learned counsel for the assessee drew our attention to para 7 of the said order of the Tribunal and mentioned that the said issue was also decided by the Tribunal in favour of the assessee. In that regard, the Tribunal relied on 3 ITA No.824 & 915/Hyd/10 M/s. Semantic Space Technologies Ltd., Hyderabad the decision of the Supreme Court in the case of Lakshmi Machine Works (290 ITR 667). We have perused the facts of the case on this issue, and find that the issue involved in this appeal is identical to the one already adjudicated by the Tribunal. Relevant portion of the order of the Tribunal in this regard reads as follows "7. We have considered the rival submissions and perused the material available on record. As for the notice period salary recovered from employees of Rs.1,40,548, we are of the view that the lower authorities are not justified in excluding the same from the eligible profits of the business while calculating the deduction under S.10A of the Act. Since the said amount represents recovery of the business expenses earlier incurred by the assessee in recruiting and training of the employees concerned, the income arising on account of such