2012 (4) TMI 345 - ITAT INDORE

Exemption/deduction u/s 10B - extended period of ten years - meaning and scope of the term undertaking - assessee initially established spinning unit in A.Y. 1992-93 and one more spinning unit was added in each of two years namely A.Y. 1996-97 & A.Y. 1999-2000 - held that:- The expression "undertaking" has not been defined u/s 10B of the Act. The said expression has been explained by the Courts in the context of similar other provisions of IT Act viz. section 15C of 1922 Act, section 80J, 80HH, 80I, 80IA and 80IB of 1961 Act. - an undertaking means a unit/business which has a separate and independent existence distinct from the other units/business; having independent infr-structure, separate plant and machinery being set up with substantial capital investment and having an identifiable output and the profits attributable thereto can be determined.

The undertaking existing prior to 1.4.1999 claiming exemption u/s 10B of the Act would be entitled to exemption for the extended period of ten years and deduction under the said sections would be admissible in respect of unit no. 3 and unit no. 4 as well for ten years from the year of start of production in these new units since these units were separate and independent production units. - Decided in favor of assessee.

Deduction u/s 10B(4) on export incentives - held that:- Once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction u/s 10B of the Act. As per the computation made by the Assessing Officer himself, there is no dispute that both these incomes have been treated by the Assessing Officer as business income. - the undertaking is eligible for deduction on export incentive received by it in terms of provisions of Section 10B(1) read with Section 10B(4) of the Act - Decided in favor of assessee.