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2010 (4) TMI 1097 - AT - Income Tax
Deduction u/s 10B denied - STP unit cannot automatically be regarded as a 100% EOU - whether CIT(A) has erred allowing deduction u/s 10B to the assessee company which is in contravention of the statutory requirement contained in Explanation 2(iv) of section 10B which stipulates a mandatory condition that a hundred per cent export oriented undertaking means an undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 (65 of 1951)and the rules made under the Act? HELD THAT:- We find that this issue has been decided by Ld CIT(A) on the basis of Instruction No.1 dated 31.3.2006 issued by CBDT and Minutes of Industrial Ministerial Communication vide letter dated 23.3.2006 issued by the Ministry of Communication and Technology. Since the facts are identical in the present case, this Tribunal decision rendered in the case of regency Creations Ltd.[2011 (5) TMI 943 - ITAT DELHI] is directly applicable in the present case and respectfully following this Tribunal decision, We hold that the STIP registration granted to the assessee on 16.11.1998 is valid for allowing deduction to the assessee u/s 10B and hence we do not find any reason to interfere in the order of the Ld CIT(A) on this issue. We would also like to point out that in an earlier year i.e. AY 2004-05, the AO himself has allowed deduction u/s 10B to the assessee in a scrutiny assessment. It is also not brought on record by the revenue that this order is revised u/s 263 or reopened u/s 147. Under these facts, we feel that having decided in assessment year 2004-05 that the assessee is eligible for deduction u/s 10B, it cannot be denied in this subsequent year on the basis that the assessee is not an 100% EOU for the reason that necessary approval is not with the assessee. This is against the rule of consistency. For this reason also, we decline to interfere in the order of Ld CIT(A). In the result, the appeal of the revenue is dismissed.
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