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2011 (1) TMI 1103 - HC - Income TaxExemption u/s 10B - Circular No. 684, dated June 10, 1994 - Held that:- Section 10B was introduced in the year 1989 and the heading of the section made it clear-special provision is in respect of newly established 100 per cent. export-oriented undertaking. Even if those establishments were not exporting the substantial portion of what it manufactures, by mere obtaining a certificate under the Act, they were enjoying the benefit by selling their products in the local markets. After seeing how this provision has been abused by such EOUs, the proposed amendment was brought in with effect from April 1, 1994. By the proposed amendment, merely because a unit has obtained a certificate from the concerned authorities, that is not sufficient to avail of the benefit of exemption. After obtaining such a certificate, they must demonstrate that 75 per cent. of their manufactured items have been exported. From this undisputed fact, it is clear that the units, which are established prior to April 1, 1994, have the advantage of claiming this exemption even by exporting a fraction of their production. The mischief is sought to be avoided by this amendment by prescribing 75 per cent. as the level of exports, which has to be satisfied by the assessee - thus by a wrong interpretation, the AO has disallowed the exemption - Appeals are dismissed.
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