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2006 (11) TMI 245 - AT - Income TaxExemption u/s 10B - income of Floppy Unit II - Export Oriented Undertaking - loss incurred - whether it is open to the assessee to opt out of the provisions of section 10B of the Act for anyone of the relevant assessment years falling within the block of five years by filing a declaration u/s 10B of the Act ? - HELD THAT:- In our view the Legislature purposely did not specify the year of furnishing the declaration so as to confer benefit to the assessee to opt out of section 10B of the Act in any of the assessment years falling within the block of five years. Thus, if the assessee seeks to opt out of section 10B of the Act, for a particular year, the assessee may do so by filing a declaration in that regard under sub-section (7) of the Act before the due date for furnishing return of income for that year. Thus the expression 'any' cannot be read as 'all' as in that case the exemption granted in the earlier year have to be withdrawn in case the assessee file the declaration under section 10(7) say in third year of the block period of five years. We are inclined to hold that the requirement for filing the declaration as per the provisions of section 10B(7) of the Act is merely directory in nature and not mandatory. Thus, if such declaration is filed during the assessment proceedings it would be sufficient compliance with the provisions of section 10B(7) of the Act. It may be mentioned that similar view has been taken in case of Expo Packaging Ltd.[1994 (11) TMI 155 - ITAT AHMEDABAD-C] It may also be mentioned that the reliance placed by the Ld. DR upon the decision in the case of Goetze (India) Ltd. v. CIT [2006 (3) TMI 75 - SUPREME COURT] is misplaced inasmuch as the said decision has been given in the different context inasmuch as the income of the export processing zone are assessable as per provisions of section 10A/10B of the Act, which is a code itself. Thus, we are of the view that it is open to an assessee not to claim tax holiday benefit u/s 10A/10B of the Act for anyone year or more of the relevant block of five assessment years by filing declaration under sub-section (7) of that section before the due date of filing the return of income for the said assessment years. Since in the instant case the assessee has opted out of the provisions of section 10B of the Act by filing the declaration u/s 10(7) of the Act during the course of assessment proceedings of the relevant assessment year, Revenue cannot thrust exemption provided u/s 10B of the Act upon the assessee. Loss incurred - Since the sufficient material is not on record, this issue is set aside and restored to the file of the Assessing Officer who may examine the matter afresh in accordance with law after affording a reasonable opportunity of being heard to the assessee. In the result, these appeals of the assessee are partly allowed.
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