TMI Blog2006 (7) TMI 283X X X X Extracts X X X X X X X X Extracts X X X X ..... as per Part IX of Companies Act, 1956 and all the properties and liabilities of the firm were vested with the limited company. There was a mere change of name and the composition in the ownership of the undertaking and the business of the undertaking have not changed as the same partners have become directors of the company. The business activities of the newly constituted company remains the same. The business of the assessee was not formed by splitting of the old business or reconstruction. The undertaking of the assessee company remained the same. Whether the letter issued by STPI on 15th April, 1999 covers the assessment year period under consideration? - HELD THAT:- The letter clearly states that all the approval issued by their office like permission, IE Code, Green Card etc. stand valid under new name. Thus, it means that the authorities of STPI substituted the name of Kumaran Software with Kumaran Systems (P) Ltd. - As held in the case of Valli Patabhirama Rao Anr. vs. Sr. Ramanuja Ginning Rice Factory (P) Ltd. Ors. [.....................................], there shall be statutory vesting of all the properties of the previous firm in the newly incorporated compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm that had claimed deduction under s. 80HHE on the income earned by the firm upto the date of registration of the firm as a company. 2. The brief facts of the case are that the assessee has filed a return of income for the asst. yr. 1999-2000 on 31st March, 2000 admitting an income of Rs. 2,09,340 and claimed exemption of Rs. 1,20,11,083 under s. 10A of the IT Act. The same was allowed while processing the return under s. 143(1)(a) of the Act. However, later it was found that the assessee, was converted from partnership firm to private limited company on 15th Feb., 1999 as per the provisions of s. 575 of the Companies Act, 1956. As per this provision, all assets and liabilities vest in the company and this company was recognized by STPI on 15th April, 1999. According to the AO, the assessee is not entitled for exemption under s. 10A for the income earned between the period from 15th Feb., 1999 to 31st March, 1999 as the company was not recognized under STPI for this period and the recognition came only w.e.f. 15th April, 1999 and the earlier recognition issued to the firm w.e.f. 6th Oct., 1998 was not applicable to the private limited company as the registration was granted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion. Merely because the erstwhile firm has not claimed exemption under s. 10A and opted to claim deduction under S. 80HHE, this act by itself does not disentitle the assessee company from claiming 10A exemption and such claim cannot be denied by the AO. According to the learned counsel for the assessee, the assessee is entitled for exemption under s. 10A as the assessee company was not formed by splitting up or reconstitution of existing business. 5. The learned counsel for the assessee further argued that the existing partnership firm being registered as a company under Part IX of the Companies Act, 1956, all the assets and liabilities statutorily vest in the company as held in the case of CIT vs. Texspin Engg. Mfg. Works (2003) 180 CTR (Bom) 497 : (2003) 263 ITR 345 (Bom). The assessee company was entitled to exemption under s. 10A from the date of vesting itself. He further submitted that if the constitution of a partnership firm is changed into that of a company by registering it under Part IX of the Companies Act, 1956, there would be statutory vesting of title of all the properties of the previous firm in the newly incorporated company without any need for a separate conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the following conditions, namely: (i) it has begun or begins to manufacture or produce articles or things during the previous year relevant to the assessment year- (a) commencing on or after the 1st day of April, 1981, in any free trade zone; or (b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park or, as the case may be, software technology park; (ia) in relation to an undertaking which begins to manufacture or produce any article or thing on or after the 1st day of April, 1995, its exports of such articles or things are not less than seventy-five per cent of the total sales thereof during the previous year; (ii) it is not formed by the splitting up, or the reconstruction of a business already in existence: Provided that this condition shall not apply in respect of any industrial undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in s. 33B, in the circumstances and within the period specified in that section; (iii) it is not formed by the transfer to a new business of machinery or plant previously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. The undertaking of the assessee company remained the same. 8. Now, the issue for consideration before us is whether the letter issued by STPI on 15th April, 1999 covers the assessment year period under consideration. The said letter reads as follows: "Dear Sir, Sub.: Change of name Ref.: Your letter dt. 1st April, 1999 This has reference to your letter referred above, regarding the change of name of your STP facility approved by the Registrar of Companies from: M/s Kumaran Software To M/s Kumaran Systems (P) Ltd. This office has taken note of the fact and has no objection for the change of name of the STP facility as mentioned above. All the approvals issued by this office, viz. letter of permission, IE Code, Green Card etc. stand valid under new name. You are requested to keep this letter appended to the above approvals. Thanking you, Yours faithfully, Sd/- Director" The above letter clearly states that all the approval issued by their office like permission, IE Code, Green Card etc. stand valid under new name. Thus, it means that the authorities of STPI substituted the name of Kumaran Software with Kumaran Systems (P) Ltd. As held in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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