TMI Blog2011 (6) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... see s undertaking started its production during the financial year 1999-2000 but not registered with STPI at that time. In as much as the assessee s undertaking got registered with STPI on 27.03.2002, but not in a SEZ and continued to use its old machineries and moreover, section 10A is location basis and section 10B is activity basis and the ld. CIT(A) ought to have applied the ratio of decision of the Hyderabad Bench of ITAT in the case of Infotech Enterprises Ltd. 85 ITD 325, where the facts of the case are identical and should have upheld the order of the Assessing Officer. Therefore, it was pleaded for setting aside the order of the ld. CIT(A) and that of the Assessing Officer should be restored. 4. Facts indicate that the Assessing Officer denied the claim of exemption under section 10A of the Act of the assessee on the ground that the assessee had not received the registration from Software Technology Parks of India (STPI) as on the date of commencement (1999-2000) of its production activities. Aggrieved by the action of the Assessing Officer and demand raised, the assessee preferred appeal by raising only one plea that the assessee is eligible for claim of exemption unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far has having analysed the facts of my case with the ratio of decisions and also considering the CBDT Circular Nos. 308 and 657 as well as Circular 1/2005 which establish beyond a show of doubt that the deduction u/s 10A was available to the existing units and secondly the conditions laid down in Sec. 10A(2)(i)(b) as well as section 10A(2)(ii) (iii) are fulfilled. Finally it was submitted by the assessee that the units existing in Free Trade Zones which get subsequently registered with approval of the concerned authorities for being treated as an unit under STPI scheme would also get benefit of deduction from the year of registration and requested that the appeal may be allowed based on the above Circulars of the Board and the case-laws relied by him. 6. The ld. CIT(A), while considering and discussing all the points raised by the ld. AR of the assessee in the light of the order of the Assessing Officer and relevant provisions and various case law, has concluded to direct the Assessing Officer to allow eligible exemption under section 10A of the Act as claimed by the assessee as under: In view of the foregoing analysis, keeping in mind the decision of Punjab Haryana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sections 10A and 10B, therefore, the ld. CIT(A) was not justified in accepting the appeal of the assessee by following ITAT Chennai D Bench in the case of ITO vs. Heartland K.G Information Ltd. (supra). Therefore, it was, pleaded that the order of the ld. CIT(A) should be set aside and that of the Assessing Officer should be restored. Whereas, the ld. Counsel for the assessee submitted that this issue is not only covered by the order of the ITAT, Chennai but also by the Hon ble Karnataka High Court in the case of CIT Others vs. M/s. Expert Outsource (P) Ltd. in ITA No. 323 of 2010 in which facts are also similar and other cases as relied upon before the ld. CIT(A) are also supportive of the case of he assessee, so while filing copies of all the decisions of the Tribunal as well as of High Court, it was pleaded that since ld. CIT(A) has taken a correct decision to allow the claim of the assessee, therefore, there is no merit in the appeal of the Revenue, which may kindly be dismissed. 9. After having heard both the sides and considering the material on record as well as precedents relied upon, we find that the issue raised in the appeal of the Revenue is not only covered i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat section 10A provides for a deduction from the total income of profits derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years. The tax holiday period commences with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software. Section 10(2) prescribes certain conditions on the fulfillment of which the benefit of 10A could be availed. 4. In the instant case, the assessee began operations on 17.12.2003 whereas the STPI was registered on 04.08.2004. The STP authorities could also permit the conversion of an existing unit into a STPI 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.1/2005 dated 06.01.2005 grants certain benefits under section 10B. 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 Appeals has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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