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2016 (12) TMI 403 - AT - Income TaxDenial of benefit of exemption claimed by the assessee u/s 10B - Held that:- Considering the copy of the circular of CBDT dated 08th October, 2014 No.14/2014 wherein it is clarified that mere transfer of redeployment of existing technical manpower from an existing unit to a new SEZ unit in the first year of commencement of business will not be construed as splitting up or reconstruction of an existing business so long as number of technical manpower so transferred does not exceed 50% of the total technical manpower actually engaged in developing software at any point of time in the given year in the new unit. It was demonstrated that in the case of the assessee, there was transfer of only 25% of technical employees from WWSPL to the assessee company. Thus, under these circumstances, we find force in the argument of the Ld. Counsel that transfer of the aforesaid employees from WWSPL to the assessee was within the limit prescribed in the CBDT circular and hence, such transfer of existing technical manpower from WWSPL to the assessee in the first year of commencement of business should not be construed as splitting up or reconstruction of an existing business. Thus, this contention of the Revenue also fails. We have gone through the other allegations made by the AO as well as the Ld. CIT(A). We find that these allegations are merely unsubstantiated doubts and, in any case, do not have any material bearing on the issue before us. Under these circumstances, we find that the lower authorities have mis-appreciated the facts and have not been able to bring any evidence on record on the basis of which the exemption u/s 10B could be denied to the assessee. Thus, after taking into account all the facts and circumstances of the case we find that deduction u/s 10B is allowable to the assessee and, therefore, the same is directed to be allowed - Decided in favour of assessee
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