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2013 (11) TMI 835 - AT - Income TaxExemption u/s 10AA - SEZ unit - Conversion of partnership firm into Company - trading activity - The definition of `services' under the SEZ Act includes `trading' activity’ – Held that:- Trading activity has been permitted by the Competent authority under the SEZ Act. As such, there can be no question of denial of exemption u/s. 10AA of the Act – Reliance has been held in the case of DCIT v. Goenka Diamond & Jewellers Ltd.[ 2012 (3) TMI 258 - ITAT JAIPUR] in which it has been held that trading of the eligible goods entitles the assessee to the benefit of section 10AA of the Act – Judgment of Hon’ble Mumbai Bench in M/s Gitanjali Exports Corportion Limited v. ADCIT [2013 (11) TMI 563 - ITAT MUMBAI], reiterates the above order – Decided against the Revenue. Non- fulfillment of requisite condition as per Section 10AA(4)(iii) of the Act – Condition that undertaking should not be formed by transfer of machinery or plant to a new business which was previously used for any purpose – Held that:- Assesssee-company is successor of the partnership firm which was originally approved by the competent authority under the SEZ Act to do this business. The said firm claimed exemption u/s. 10AA of the Act for two years before the partnership firm got converted into assessee- company - Assessment of the firm was completed u/s. 143(3) of the Act in which benefit of exemption under this provisions was allowed. The granting of such exemption in earlier years implies that the AO got satisfied with the requisite conditions as per section 10AA(4). Since the assessee-company is nothing but the conversion of the erstwhile firm, at this stage it can not be said that the condition required under clause (iii) is not satisfied – Allowed exemption u/s 10AA of the Act – Decided against the Revenue.
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