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Quality BPO Services Pvt Ltd Versus ACIT (OSD) , Circle-5, Ahmedabad

2015 (11) TMI 749 - ITAT AHMEDABAD

Disallowance of deduction u/s 10B - whether failure to obtain approval from Board despite fulfilling all the conditions makes the appellant ineligible to claim deduction u/s 10B? - Held that:- Approval by Software Technology Parks of India comes under the Ministry of Communication & Information Technology & is a competent authority to grant approval to such units for claiming benefits u/s 10B as 100% Export Oriented Undertaking and the same is possessed by assessee and also looking to the facts .....

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dent : Shri Dipak Sutaria, Sr. D.R. ORDER PER Manish Borad, Accountant Member. This appeal of the assessee is filed against the order of CIT(A)- XI, Ahmedabad dated 18.11.2011 in appeal No.CIT(A)-XI(362/10-11. Assessment for Asst. Year 2008-09 was completed on 6.12.2010 u/s 143(3) of the Income-Tax Act, 1961 (hereinafter referred to as the Act). Assessee has raised following grounds in its appeal:- 1. Ld. CIT(A) erred in law and on facts in confirming disallowance of deduction of ₹ 67,08,7 .....

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2. Ld. CIT(A) erred in law and on facts in dismissing the additional ground taken by the appellant to alternatively grant deduction u/s 10A of the Act. Ld. CIT(A) gravely erred in rejecting to adjudicate additional ground that goes to the root of the matter by wrongly placing reliance on judgment of Goetz (India) Ltd. Ld. CIT(A) ought to have granted deduction as all the conditions laid down u/s 10A of the Act were fulfilled by the appellant. 3. Levy of interest u/s 234B & 234C of the Act i .....

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income on 29.9.2008 declaring total income at Rs.NIL. Assessee claimed deduction of ₹ 67,08,733/- u/s 10B of the Act, which is available for newly established 100% Export Oriented Undertaking Scheme. During the course of assessment proceedings, the Assessing Officer observed that as the assessee has not produced any approval taken from appropriate authority as per the provisions of section 10B of the Act and therefore disallowed the claim of deduction u/s 10B of the Act and assessed the i .....

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unit approved by director )IT) under Software Technology Park Scheme will be eligible for exemption u/s 10A of the IT Act and not u/s 10B of the IT Act. This clarification has not been over ruled by the CBDT and accordingly, I am inclined to follow the CBDT s circular in this regard. Secondly, there is a conflicting decision by the Hon ble Hyderabad Tribunal. In the case of Infotech Enterprises Ltd. vs. Joint CIT (2003) 85 ITD 325, it was held that for the purpose of section 10B, 100% EOU is onl .....

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ark of India and not from Board constituted u/s 14 of IDAR Act, 1951. This respectfully following the CBDT clarification bearing DOF No. 178/30/09-ITA(1) dated 6.5.2009 and ITAT order in the case of Infotech Enterprise Ltd. (supra). I am inclined to agree with the AO on this point. Even the appellant is also not very sure for mantainability of deduction u/s 10B of the IT Act and moved on additional ground of appeal on 17.11.2011, contending that it is eligible for deduction u/s 10A of the IT Act .....

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re the Tribunal. At the outset the ld. AR of the assessee submitted that the appellant is carrying on the business of process outsourcing activities like Revenue Accounting, Back Office Operations, Call centre, Data Processing etc. It is undisputed fact that the appellant is registered with Software Technology Park of India, Gandhinagar, Gujarat, as Hundred Percent Export Oriented Undertaking under STP Scheme for development of computer software and enabled services w.e.f. 28.06.2006. A copy of .....

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r this year. Further for the Asst. Year 2010-11, the Assessing Officer has allowed the deduction of ₹ 57,56,945/- as against the claim of assessee at ₹ 82,55,275/- in its assessment order under section 143(3) of the Act and similarly for Asst. Year 2011-12 also the Assessing Officer in his assessment order dated 6.1.2014 framed under section 143(3) of the Act has allowed deduction under section 10B of the Act at ₹ 56,96,695/-. The ld. AR with the help of the facts of its case f .....

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f articles or things or computer software. The only reason out of which Assessing Officer denied the deduction u/s 10B of the Act for the year under appeal was that assessee was not possessing approval taken from appropriate authority as per the provisions of section 10B which reads as below :- hundred per cent export oriented undertaking means an undertaking which has been approved as a hundred per cent export oriented undertaking by the Board appointed in this behalf by the Central Government .....

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ort oriented undertaking by the Board appointed in this behalf by the Central Government, as Software Technology Parks of India (STPL), comes under the Ministry of Communication and Information Technology, Government of India. In support of its claim under section 10B of the Act being holding of letter of approval from STPL the ld. AR relied on the judgment of ITAT, Delhi Bench in the case of Regency Creators Ltd. in ITA No.1588/Del/2010; the order of ITAT, Ahmedabad Bench in the case of ITO vs. .....

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which hitherto has been disallowed by the Assessing Officer and further sustained by CIT(A). From perusal of records we find that assessee was duly allowed deduction u/s 10B of the Act for Asst. Year 2007-08 and the same has not been challenged by the Assessing Officer by way of reopening of the case for Asst. Year 2007-08 and assessee has been consistently allowed deductions u/s 10B of the Act by the Assessing Officer for Asst. Years 20010-11 and 2011-12 in the assessment orders u/s 143(3) of t .....

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(65 of 1951) and the rules made under that Act. On the other hand, ld. AR of the assessee has referred to various judicial pronouncements wherein letter of approval received from STPL is treated as proper approval, as required by the provisions of section 10B. 7. In the case of Regency Creators Ltd. vs. ACIT in ITA No.1588/Del/2010, ITAT, Delhi Bench has held as under: 7. We have heard both the parties and have perused the material on record. No doubt, the CBDT Clarification (supra) states that .....

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under the RTI, as follows : Subject: RTI application received from Shri Mahesh Shrivastaa, Keshavpuram, Delhi, regarding approval or ratification of STPL, approval by BOA formed by MOC to claim benefits of 100% EOU Scheme. Please refer to your RTI application dated March 10,2011 received on 17.03.2011 on the subject mentioned above and to inform that no approval/ratification of STPI approval is required from BOA formed by Ministry of Commerce by power conferred under section 14 of IDR Act, 1951. .....

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te Bench held as under :- 6. In view of the above findings of CIT(A), we find that the unit of assessee is registered with STPI and letter of acceptance is issued by the concerned authorities regarding legal agreement exercised by it. We find from the copy of certificate issued by Custom Authorities regarding permission and licence was granted on 04.03.2005 which dates that to the date of application and STPI the approving authority has not taken any adverse view. As regards to export realizatio .....

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bad Bench held as under :- We have considered the rival submissions and perused the material available on record. We find that it is admitted fact that the assessee has obtained the approval from STPI, Hyderabad as 100% EOU. The CIT s finding is that the assessee is not eligible for relief under section 10B of the Act only on the ground that 100% EOU under STPI Scheme cannot be equated with the 100% EOU approved by the Board. Since we have already held in the case of Sudharani (supra) that the a .....

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