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2015 (4) TMI 299 - HC - Income TaxDeduction u/s 10A - as per AO new unit under which the claim was made would be formed out of splitting up or reconstruction of the business by using the old plant and machinery and therefore, the assessee by furnishing incorrect particulars of income has claimed deduction which is not allowable under Section 10A - ITAT allowed the claim - Held that:- In the instant case, the assessee began operation in the existing company whereas the STP unit was registered on 16.10.2002. The STP authorities could also permit the conversion of an existing unit into a STP unit. The purpose of the STP scheme is to encourage exports and gain valuable foreign exchange for the country. The STP scheme provides the benefit of converting a DTA unit into a STPI unit and the same should also hold good for tax purposes. CBDT Circular No.1 of 2005 dated 6th January, 2005 grants certain benefits under the provisions of Section 10B of the Act. Though the circular is in the context of Section 10B, the ratio of the circular equally applies to Section 10A also. In fact, the Commissioner of Income Tax (Appeals) has referred to various judgments on the point and has come to the conclusion that the benefit of Section 10A of the Act would also be available even when an existing unit gets converted into a STPI unit. In fact, the material on record discloses that no export of computer software was made before 16.10.2002. The export commenced only after 16.10.2002. The invoices produced in the case clearly establish the said fact. In those circumstances, the Appellate Authority as well as the Tribunal are justified in extending the benefit of Section 10A of the Act to the unit of the assessee in question. See CIT and ITO Versus Expert Outsource (P) Ltd. [2011 (3) TMI 1428 - Karnataka High Court] - Decided in favour of assessee.
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