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2008 (11) TMI 663 - AT - Income TaxClaim for deduction u/s 10A/10B - 100 per cent EOU - scope of undertaking - assessee transferred the plant and machineries from another company - AO noted that it was merely a case of transfer of machinery and held that not entitled to deduction u/s.10A or 10B. HELD THAT:- A plain reading of the section 10A, would make it clear that not only units located in SEZ which are eligible for deduction under cl. (c) of sub-s. (2) of this section, but even the units located in any free trade zone or any electronic hardware technology park or software technology park are also eligible for the deduction. This is further clear because after cls. (a) and (b) the word used is 'or' which means every clause would have independent effect. Therefore, we reject the objection raised by the ld DR that since the unit is not located in SEZ area, the assessee is not eligible to the deduction. Admittedly, the unit is located in Software Technology Park of India and even copy of the approval letter has been placed on record. A combined reading of sub-ss. (i), (ii), (iii ), (iv) and (v) would make it abundantly clear that deduction refers to particular undertaking. Though the term 'undertaking' is not defined u/s.10A but such terms which are not defined in a particular provision would be understood in commercial parlance or business parlance. An undertaking in a normal parlance would have constitute business activity and not just any activities or liabilities or any combination thereof. In fact, the High Court had made the observations while considering the meaning of undertaking in the case of A.G.S. Tiber and Chemicals Industries (P) Ltd.[1996 (7) TMI 14 - MADRAS HIGH COURT]. The benefit of this deduction attaches to a particular undertaking and not to the whole business. Admittedly, the assessee has taken over the medical transcription unit from K.G. Information Systems (P) Ltd. It clearly shows that not only the unit or undertaking itself was transferred to the assessee by KGISPL but also the obligations of exports etc., in view of the exim policy were also taken over by the assessee. Therefore, this is a plain case of purchase of business undertaking. Moreover, it was also pointed out by the ld counsel for the assessee that undertaking was purchased in the year 2001 and deduction has already been allowed to the assessee company for the asst. yrs. 2002-03 and 2003-04, Though the deduction has been allowed u/s.143(1) of the Act, i.e., without examining all the facts in detail we are of the view that it is too late in the day to examine the question of formation of the undertaking after a lapse of more than two years. Therefore, following the Board's circular as well as the decision in the case of A.G.S. Tiber and Chemicals Industries (P) Ltd. (supra), we find nothing wrong with the order of the CIT(A). The appeal filed by the Revenue is dismissed.
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