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2020 (10) TMI 564 - HC - Income TaxBenefit of deduction u/s 10A on the ‘deemed export’ made to another STP unit - the receipt was routed through the banking channel by convertible foreign exchange - whether a transaction is an ‘export’ or a ‘deemed export’ and not on the quantum of deduction, which the assessee is entitled to? - HELD THAT:- A proper reading of Section 27 of the SEZ Act would mean that the benefit, which will accrue to the assessee will be subject to the modification specified in the Second Schedule and it would mean fulfillment of certain conditions for being entitled to the benefit of the special provision namely Section 10AA of the Act. The provisions of the SEZ Act cannot be ignored because of the fact that the terms ‘developer’, ‘entrepreneur’ and ‘authorized operations’ are not defined under the Income Tax Act, but they are defined under the SEZ Act, which, being a special Statute, will have to be applied to consider as to whether the transaction is an ‘export’ or a ‘deemed export’. This is amply made clear by the provisions of Section 53 of the SEZ Act, which states that ‘a Special Economic Zone shall, on and from the appointed day, be deemed to be a territory outside the customs territory of India for the purposes of undertaking the authorized operations’. CBEC issued a clarification vide Circular No. 1001/8/2015-CX.8 dated 28.4.2015 with regard to rebate of duty on goods cleared from DTA to SEZ, which clearly explains the concept of a ‘deemed export’ and also states that the provisions of the SEZ Act shall have overriding effect of the provisions of the Income Tax Act in case of any inconsistency. In the instant case, there was no inconsistency. Rather, the provisions of the Income Tax Act resorts to the provisions of the SEZ Act while considering as to whether the assessee would be entitled for the benefit under Section 10A or 10B of the Act. The receipt was routed through the banking channel by convertible foreign exchange - Decided in favour of assessee. Allowance of expenditure incurred towards telecommunication u/s 10A - whether it has inextricable nexus to the export made by the appellant ? - HELD THAT:- This second substantial question of law admitted is, in effect, a question of fact and that the Tribunal affirmed the order passed by the Commissioner of Income Tax (Appeals)-3, Chennai-34 [hereinafter called the CIT(A)], who remanded the matter to the Assessing Officer for a fresh consideration.
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