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ITO – 9 (2) (3) , Mumbai Versus M/s. Next Services Healthcare Sourcing Solutions Pvt. Ltd.

2016 (2) TMI 824 - ITAT MUMBAI

Claim of deduction u/s 10B - Assessee had claimed deduction u/s 10B on the ground that it has been registered and approved under the STP scheme of the Government of India as 100% EOU for the period of 5 years effective from 7.3.2007 to 6.3.2012 - Held that:- In terms of Explanation II(iv) to Sec. 10B, 100% EOU has been defined as an undertaking which has been approved as 100% EOU by the Board appointed in this behalf by the Central Government in view of Sec. 14 of Industries (Development & Regul .....

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needs to be examined afresh. Accordingly, we remit the matter to the file of the Assessing Officer to see, whether the Assessee is eligible for claim of deduction u/s 10A or not and examine the eligibility criteria of the Assessee and whether the conditions laid down u/s 10A stands fulfilled and accordingly decide this issue afresh and in accordance with the provisions of the law. Thus, with this direction the appeal of the Revenue is treated as partly allowed for statistical purpose. - ITA NO. .....

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d in law, the Ld.CIT(A) erred in deleting the disallowance of the deduction u/s.10B of the I.T Act amounting to ₹ 50,10,459/- 2. The Ld. CIT(A) has erred in allowing the deduction u/s.10B even though the assessee did not have approval of prescribed authority as required in CBDT's letter F.No.178/19/2008-ITA-J dated 18.10.2010 3. The Learned CIT(A) has failed to appreciate that the green card issued by the Chairman inter Ministerial Standing Committee(IMSC),as software Technology Park S .....

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o. 2706/Del/2008 and M/s. Regency Creations Ltd. in ITA No. 1588/Del/2010 dt. 5.5.2011. Now, the said decisions of the Delhi Tribunal stands reversed by the decision of the Hon ble Delhi High Court in the same case of CIT vs. Regency Creations Ltd. & Valiant Communications Ltd. reported in [2013] 353 ITR 326. 3. Explaining the brief facts, the ld. Counsel submitted that the Assessee is an export oriented unit and received all its revenue by export of services in foreign exchange. It had clai .....

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ard by the Designated Officer, Secretary to the Government of India, Ministry of Information and Technology, who is the Chairman of Inter Ministerial Standing Committee on Software Technology Park Scheme. The Director of STPI has given approval for 100% EOU. However, the Assessing Officer held that the said approval should be given by the proper authority. The ld. CIT(A), following the decision of the Tribunal in the case of M/s. Regency Creations Ltd. decided the issue in favour of the Assessee .....

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ing Officer afresh. 5. The ld. DR submitted that so far as allowability of deduction u/s 10B which was claimed by the Assessee and allowed by the ld. CIT(A), now stands reversed by the decision of the Hon ble Delhi High Court, therefore, the Revenue s appeal on this score should be allowed. Regarding the alternate plea of the ld. Counsel that claim of deduction should now be examined u/s 10A, he submitted that this plea or ground has neither been raised before the Assessing Officer nor the ld. C .....

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he Government of India as 100% EOU for the period of 5 years effective from 7.3.2007 to 6.3.2012. The AO noted that in terms of Explanation II(iv) to Sec. 10B, 100% EOU has been defined as an undertaking which has been approved as 100% EOU by the Board appointed in this behalf by the Central Government in view of Sec. 14 of Industries (Development & Regulation) Act, 1951 and rules made thereunder. The Assessee s unit has not been approved by the said authority and instead, the Assessee s cas .....

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annot be deemed approval for the purpose of Sec. 10B and it must be approved by the Board appointed by the Central Government. Respectfully following the decision of the Hon ble Delhi High Court, we hold that the Assessee is not eligible for claim of deduction u/s 10B and accordingly, the decision of the ld. CIT(A) on this score is reversed and the ground raised by the Revenue is treated as allowed. 7. Now, coming to the alternate contention raised by the ld. Counsel that the Assessee is otherwi .....

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the Assessee was debarred from making any other claim or raise any alternative plea uptil the stage of first appellate authority. Thus, the Assessee cannot be precluded from taking a fresh plea for which it may otherwise be eligible for claim of deduction under different provision when the eligibility criteria and conditions, as prescribed under a given provision are fulfilled. Even though the Assessee may not have filed any cross objection or appeal, but the parties are entitled to raise the g .....

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explained and reiterated by the Hon ble Gauhati High Court in the case of Assam Company (India) Ltd. reported in 256 ITR 423. The relevant observation of the Hon ble High Court reads as under : Whether or not the applicant-company can be permitted to raise that plea only on the ground that it had not preferred any appeal or cross-objection against the order of the Commissioner of Income-tax (Appeals) is the question which now engages the attention of this court. It need not be overemphasised tha .....

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authority and jurisdiction of the Tribunal in dealing with matters at its disposal. We have not been able to read any prohibition in the rules totally precluding the Tribunal from considering any ground beyond those mentioned in the memorandum of appeal filed by a party, whether the assessee or the Department, in the absence of an appeal or cross-objection by the other side projecting the new ground. It is a settled principle of law that procedural law is the hand maid of justice and has to be s .....

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xing authority is to assess correctly the tax liability of an assessee in accordance with law. We consider it to be a solemn duty of the taxing authorities to correctly assess the tax liability of an assessee by duly following the relevant provision of law and therefore do not countenance an inflexible and mechanical adherence to the law of procedure and, in the process deny an assessee a benefit to which it is otherwise entitled in law. In our considered opinion, that could not have been the pu .....

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thereby had sufficient opportunity of being heard on that ground. In taking this view, we are conscious about the observations of the Madras High Court and the Calcutta High Court made in the decisions relied upon by learned counsel for the Revenue but we are, in the facts and circumstances of the case, persuaded to accept the observations of the apex court made in this regard in the case of National Thermal Power Co. Ltd. [1998] 229 ITR 383. We are therefore of the view that it is permissible .....

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