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2015 (6) TMI 755 - AT - Income TaxEligibility of for deduction u/s 10B - whether approval of the EOU does not automatically make the assessee eligible for deduction u/s 10B of the Act and the deduction is available only after verification? - AO came to the conclusion that it is the reconstruction of the business of FFIPL and hence the assessee was not eligible for deduction u/s 10B - CIT(A) allowed claim - Held that:- There was no transfer of old plant and machinery during the financial year 2004-05, 2005-06 and 2006-07 and further that the plant and machinery purchased by the assessee from FFIPL in the financial year 2007-08 also did not exceed 20% of the total plant and machinery of the assessee during the said financial year. Since there was no purchase of old plant and machinery from FFIPL in the earlier assessment year even as per contemporaneous records of the EOU/Customs authorities. The relevant date of the plant and machinery purchased by the assessee over the years is reproduced in order of the CIT(A). Thus, CIT(A) held that the manufacturing activity carried on by the assessee in the assessment years earlier to assessment year 2008-09 was by use of new plant and machinery. As regards the transfer of business premises, employees and the customers of FFIPL to the assessee, the CIT(A) observed that there was no prohibition in the use of the business premises of FFIPL by the assessee and also of the employees and customers of FFIPL and further that the transfer of employees and customers of the assessee was only a small percentage of the total employees and customers of the assessee respectively. Thus holding, the CIT(A) set aside the finding of the AO and allowed the deduction u/s 10B of the Act. - Decided in favour of assessee.
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