TMI Blog2015 (4) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... of the STP scheme is to encourage exports and gain valuable foreign exchange for the country. The STP scheme provides the benefit of converting a DTA unit into a STPI unit and the same should also hold good for tax purposes. CBDT Circular No.1 of 2005 dated 6th January, 2005 grants certain benefits under the provisions of Section 10B of the Act. Though the circular is in the context of Section 10B, the ratio of the circular equally applies to Section 10A also. In fact, the Commissioner of Income Tax (Appeals) has referred to various judgments on the point and has come to the conclusion that the benefit of Section 10A of the Act would also be available even when an existing unit gets converted into a STPI unit. In fact, the material on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.10.2002 was working as non-STP unit earlier to it. As the assessee was an existing unit, the new unit under which the claim was made would be formed out of splitting up or reconstruction of the business by using the old plant and machinery and therefore, the assessee by furnishing incorrect particulars of income has claimed deduction which is not allowable under Section 10A of the Act. Accordingly, as the claim was not liable to be allowed, initiated penalty proceedings under the provisions of Section 271(1)(c) of the Act against which the assessee preferred an appeal before the Commissioner of Income Tax (Appeals)-I, Bangalore, who after hearing both the parties, by order dated 11.3.2009, has allowed the appeal in part holding that in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities could also permit the conversion of an existing unit into a STP unit. The purpose of the STP scheme is to encourage exports and gain valuable foreign exchange for the country. The STP scheme provides the benefit of converting a DTA unit into a STPI unit and the same should also hold good for tax purposes. CBDT Circular No.1 of 2005 dated 6th January, 2005 grants certain benefits under the provisions of Section 10B of the Act. Though the circular is in the context of Section 10B, the ratio of the circular equally applies to Section 10A also. In fact, the Commissioner of Income Tax (Appeals) has referred to various judgments on the point and has come to the conclusion that the benefit of Section 10A of the Act would also be availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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