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2010 (12) TMI 683 - KARNATAKA HIGH COURTDeduction u/s 10B - Income escaping assessment - 100% EOU - Initial year versus substantial extension in subsequent years - Whether eligible for exemption u/s 10B to be determined each year - Held that:- an exception or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the Industrial Policy and the exemption notifications. - section 10B stands on a separate and distinct footing whereunder the special provision is extended to newly established 100 per cent. EOUs which would necessarily mean that they would be earning foreign exchange which would be the yardstick for measuring national economy. - prayer made by the learned counsel for the assessee that the provisions of section 80J(4)(ii) and Explanation provided there under have to be read in conjunction with section 10B rejected The starting point of limitation for claiming the benefit, flowing from section 10B would commence from the year of manufacture or production of the undertaking and if such condition is not satisfied in the year of commencement of production, it would not be able to claim such deduction in the subsequent years unless the said initial test on the date of the starting point of limitation had been satisfied. - Appellants not entitled for relief u/s 10B.
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