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2014 (2) TMI 1076 - HC - Income TaxEntitlement for benefit u/s 10A of the Act Business of exporting software Conversion from firm to company - Benefit u/s 80HHE of the Act - Whether the Tribunal was correct in holding that the conversion of assessee firm to a company and conversion of the same into an STP unit would not amount to transfer of ownership or beneficial interest or reconstruction or splitting of business - Held that:-The benefit under Section 10A can be extended even to the existing units, if they have fulfilled the condition under Sections 10A(2)(a)(ii) and 10A(2)(a)(iii) of the Act and as contended by the assessee, the requirement of setting up of a new STP unit does not arise Relying upon Commissioner of Income-Tax Versus Texspin Engineering And Manufacturing Works [2003 (3) TMI 56 - BOMBAY High Court] - the conversion of a Firm into a Company is not a case of distribution of assets or dissolution of the Firm. There is no transfer of business as contemplated under Section 45(1) of the Act and only the partnership firm was converted into a company and all the partners of the firm have become the shareholders of the company - In view of the STPI scheme framed by the Government of India, the existing DTA units can also be converted into STP units and enjoy the deduction under Section 10A of the Act - the assessee has not violated any of the conditions prescribed under Section 10A of the Act - The benefit under Section 10A would also be available even when an existing unit gets converted into STP unit - it is not open to the Assessing Officer to contend that no new undertaking came into being after approval of STPI Decided against Revenue.
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