InITA No.363/Chny/2023 -ITAT- ITAT (Chennai) rules in favour of Cognizant Technology Solutions; allows to claim full deduction under Section 10AA of Income Tax Act & directs AO to allow credit for advance tax and TDS of amalgamated entities
Members V. Durga Rao (Judicial) & Manoj Kumar Aggarwal (Accountant) [26-07-2023]

Read Order: M/s. Cognizant Technology Solutions India Pvt.Ltd v. ACIT

Chahat Varma

New Delhi, September 8, 2023: The Chennai bench of the Income Tax Appellate Tribunal has ruled in favour of Cognizant Technology Solutions India Pvt. Ltd. (assessee), directing the Assessing Officer (AO) to re-compute the deduction under Section 10AA of the Income Tax Act and allow the credit of advance tax and TDS belonging to amalgamated entities.

In this case, the assessee had appealed against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], which had upheld the AO's decision to deny the assessee a deduction under Section 10AA and the credit for advance tax and TDS paid by entities that had amalgamated with the assessee during the year.

The two-member bench of V. Durga Rao (Judicial) & Manoj Kumar Aggarwal (Accountant) found that the shortfall in the deduction under Section 10AA was due to an arithmetical and had no basis for disallowance. Therefore, the full deduction was allowed to the assessee, and the AO was directed to re-compute the income accordingly.

Regarding the short grant of advance tax and TDS credits for amalgamated entities, the bench agreed with the CIT(A)'s direction to the AO to verify the available credits and allow them as per the law. It was noted that the credits for advance tax and TDS belonging to the amalgamated entities should be granted to the assessee since those entities had not claimed these credits themselves.

In conclusion, the Tribunal allowed the appeal in favour of the assessee.