TMI Blog2013 (11) TMI 835X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05 allowing trading of specified "liquor, cigarettes, FMCG product" to the erstwhile partnership firm, which was succeeded by the present assessee, a private limited company. This letter of approval was further amended vide letter dated 05-08-2005 permitting trading activity of `all items except prohibited items'. The Assessing Officer noticed that the letter of the Development Commissioner allowing transfer of the original LOA from the erstwhile firm to the present corporate assessee was given for setting up of a trading unit at Falta SEZ for liquor, cigarattes, FMCG product. Since the assessee was not engaged in any manufacturing activity in the SEZ, the AO opined that the benefit of section 10AA of the Act was not permissible. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of any `services' by an eligible enterprise. Obviously, the erstwhile partnership firm i.e., M/s. Midas International was permitted to do `trading' by the Competent authority. The firm got converted into assessee-company and continued the same business with prior permission from the Competent authority under the SEZ Act. The definition of `services' under the SEZ Act includes `trading' activity. In that view of the matter, it becomes manifest that the 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. The Ld. Counsel for the assessee has placed on record a copy of an order passed by the Jaipur Bench in DCIT v. Goenka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(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, we fail to appreciate as to how it can be said at this stage that the condition required under clause (iii) is not satisfied. That apart, since the assessee is a trading company not having any machinery or plant, there cannot be any question of violation of this provisions. The reference by the Assessing Officer to certain piece of land for denial of exemption is not appropriate inasmuch as the business was carried on this leaseed land which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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