9911796707
TMI Blog2016 (3) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... ternative claim of exemption u/s.10A of I.T.Act, 1961 preferred before the assessing officer. Your appellant craves leave to add, to alter or to withdraw any ground or grounds of appeal on or before the date of hearing. 3. The issue raised in the present appeal filed by the assessee is against the claim of deduction under section 10B of the Act. An alternate plea was raised before us to allow the exemption under section 10A of the Act which was claimed before the Assessing Officer. 4. Briefly, in the facts of the present case, the assessee was 100% Export Oriented Unit (EOU) engaged in outsourcing of software development i.e. in the field of designing, developing and maintaining and book keeping accountancy. For the year under consideration, the assessee had declared total income at Nil after claiming the deduction under section 10B of the Act at Rs. 69,68,017/-. The Assessing Officer denied the claim of deduction under section 10B of the Act as the assessee had not fulfilled the conditions for 100% EOU as it was not approved by the Board appointed in this behalf by the Central Government under section 14 of Industries Development and Regulation Act, 1951. The assessee was regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section (2) of section 288 of the Act, certifying that the deduction has been correctly claimed in accordance with the provisions of the Act. Since the assessee had not fulfilled either of the conditions, the contention of the assessee in this regard was rejected and the deduction claimed under section 10B of the Act at Rs. 69,68,017/- was disallowed. 5. Before the CIT(A), similar plea was raised by the assessee that first it is entitled to the claim of deduction under section 10B of the Act and in alternate, the deduction under section 10A of the Act should be allowed to it. The CIT(A) in view of the ratio laid down by the Hon'ble Delhi High Court in CIT Vs. Regency Creations Ltd. (supra), upheld the order of Assessing Officer in denying the deduction under section 10B of the Act. The alternate claim of deduction under section 10A of the Act was also rejected, where the assessee had not demonstrated with necessary evidence that all the requirements for claiming the deduction under section 10A of the Act were complied with by the assessee. The CIT(A) observed that Form No.56F was furnished only after the claim under section 10B of the Act was proposed to be disallowed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10B of the Act, the assessee should be 100% EOU set up as specified under Explanation 2(iv) below section 10B of the Act, which defines 100% EOU as an undertaking so approved by the Board appointed in this behalf by the Central Government under section 14 of the Industries Development and Regulation Act, 1951. The assessee admittedly is not so registered or approved by the Development Commissioner, which are ratified by Board of approval. In view of the ratio laid down by the Hon'ble Delhi High Court in CIT Vs. Regency Creations Ltd. (supra), which has been applied by Pune Bench of Tribunal in Clarion Technologies (P.) Ltd. Vs. DCIT (supra) , we hold that the assessee is not entitled to the said claim of deduction under section 10B of the Act. The relevant findings of the Tribunal vide paras 10 and 11 read as under: - "10. We have carefully considered the rival submissions. The case set-up by the Revenue is that the undertaking of the assessee has not been approved by the Board appointed in this behalf by the Central Government in exercise of powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951, which is an express requirement for claiming de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. The controversy was as to whether the approval granted by the Director of STPI was a sufficient approval so as to specify the condition stipulated in section 10A(2)(i)(b) of the Act. The Hon'ble High Court referred to the Instruction and communication of the CBDT and held that the approval granted by the Director of STPI would be deemed valid for the purposes of compliance with the conditions stipulated u/s 10A(2) of the Act. The aforesaid judgement of the Hon'ble Delhi High Court deals with the provisions of section 10A of the Act and not with section 10B of the Act, which is the subject-matter of controversy before us. Therefore, the judgement of the Hon'ble Delhi High Court in the case of Technovate E Solutions P. Ltd. (supra) does not help the assessee in the present case. Therefore, in so far as the action of the lower authorities in holding that the 100% EOU of the assessee was not entitled for the benefit of section 10B of the Act is concerned, the same is hereby affirmed." 10. Now, coming to the alternate plea of the assessee in respect of allowability of deduction under section 10A of the Act in place of section 10B of the Act, since the undertaking is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Form No.56F. The Hon'ble Delhi High Court in the case of Valiant Communications (supra) in similar circumstances held that the claim of the assessee for deduction u/s 10A of the Act is required to be examined in accordance with law. Pertinently, even in that case assessee had claimed deduction u/s 10B of the Act in the return of income, which was not allowed ultimately in the absence of the unit being approved by the Board appointed by the Central Government, whereas the unit was only registered with the STPI. The Hon'ble Delhi High Court directed the lower authorities to consider the claim of deduction u/s 10A of the Act in accordance with law. In the present case also, we find no reason to deny the assessee an opportunity to put-forth its claim for deduction u/s 10A of the Act with regard the profits of its STPI unit, subject of-course to the fulfillment of the prescribed conditions. 17. Section 10A of the Act provides a deduction of such profits and gains derived by an undertaking from export of articles or things or computer software manufactured or produced by it. The assessee claimed that it has undertaken export of computer software manufactured by it and its un ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
