TMI Blog2011 (2) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... shall get relief only for the remaining period of ten consecutive years beginning with assessment year in which the undertaking begins to manufacture computer software as a DTA unit - Held that: the assessee is entitled to deduction u/s 10A of the Act - Decided in favour of assessee. - ITA No. 555/Bang/2010 - - - Dated:- 28-2-2011 - George George K, A. Mohan Alankamony, JJ. Padam Chand Khincha, CA, for the Appellant Jacinta Zimik Vashai, Addl. CIT, for the Respondent ORDER George George K: This appeal instituted by the assessee is directed against the order of learned CIT(A)-I, Bangalore dated 15/01/2010. The asst. year concerned is 2005-06. 2. Ground nos.1.1 and 5.1 are general in nature and no adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is more than 20% of the total plant and machinery of STP unit. Thus, the condition laid down u/s 10A(2)(iii) of the I T Act are not satisfied. 6. The assessee, in his reply relied on Circular No.1 of 2005 dated 6.1.2005 and also the order of ITAT in the case of ITO v Foresee Information Systems Pvt. Ltd. dated 16.3.2007 and ITO v American Data Solutions India Pvt. Ltd. dated 9.3.2007. The objection of the assessee was rejected by the AO and claim of deduction u/s 10A was disallowed while completing the scrutiny assessment u/s 143(3) vide order dated 3/12/2007. The AO was of the view that the Circular no.1/2005 deal with exemption to be granted to unit u/s 10B and therefore, it has no application to section 10A. The AO held that since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 56/07 dt.24.7.2008 (P and H) CIT v Mahavir Spinning Mills Ltd. (2008) 303 ITR 353 (P and H) ; ITO v Foresee Information Systems P Ltd. ITO v Gignext Solutions India P. Ltd. ACIT v E4E Application Services P Ltd. ITO v iQura Technologies P Ltd. ITO v Expert Outsource P Ltd. ITA Nos.896 and 897/Bang/09 dt.17.3.2010 (Bang. ITAT) Inatech Infosolutions P. Ltd. v DCIT ITA No.527/Bang/2010 dt.12.11.2010 (Bang. ITAT). 10.1 He also relied on the CBDT Circular No.1/2005 dated 6/1/2005 (272 ITR (St.) 6). It was submitted that in the following cases, it has been held that there is no requirement to maintain separate books of accounts as a necessary precondition for claiming the benefit of relief u/s 10A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. The plant and machinery previously used for the business having been transferred to the STP unit to the extent of Rs.2,80,154/- which is more than 20% of the total plant and machinery, the condition laid down u/s 10A(2)(iii) of the I T Act are not satisfied. iii) The deduction u/s 10A cannot be granted even if it is held that the assessee did not set up a new unit on securing STP registration because, as stated in the marginal heading of section 10A, the deduction is available for undertakings newly established in Free Trade Zone, etc. It cannot be said that on obtaining registration from STPI authorities, the assessee's unit has been newly set up. After hearing both the departmental representative and the authorized representati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t after getting approval. Thereafter only the undertaking claimed exemption u/s 10A of the IT Act. The claim of the assessee is supported by Board Circular No.1/2005, where it has been clearly held that undertaking set up in Domestic Tariff Area (DTA), which is subsequently approved as 100% export oriented, is entitled to relief u/s 10B of the IT Act provided the undertaking shall get relief only for the remaining period of ten consecutive years beginning with assessment year in which the undertaking begins to manufacture computer software as a DTA unit". Respectfully following the judgement of the Punjab and Haryana High Court in the case of Mahavir Spinning Mills Ltd. (supra) and the order of the coordinate Bench of the Tribunal in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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