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Dy. Commissioner of Income Tax Versus M/s. Pennywise Solutions Private Limited

2016 (6) TMI 695 - ITAT HYDERABAD

Allowance of exemption u/s 10B denied - assessee has not received the ratification by the Board of Approval as per section 14 of the Industries Development and Regulation Act - Held that:- DR is relying upon the CBDT instructions requiring the approval to be ratified by the Board of Approval, while the learned Counsel for the assessee is relying upon the letters of clarifications issued by the Director of STPI. We find that this Tribunal in the case of ACIT vs. Smt. K. Sudha Rani [2010 (9) TMI 1 .....

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onfirmed by the Hon'ble High Court of Andhra Pradesh [2013 (6) TMI 783 - ANDHRA PRADESH HIGH COURT]

Since the Tribunal and the Hon'ble High Court have taken cognisance of the relevant provision of law as well as the CBDT instructions and also letters of the STPI, we are of the opinion that the said decision is biding on us. Further, we also find the A.Y 2007-08 is the first year of claim of exemption u/s 10B and the AO was required to verify the assessee’s eligibility in the said year .....

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016 - Shri J. Sudhakar Rededy, Accountant Member And and Smt. P. Madhavi Devi, Judicial Member For the Revenue : Shri M. Sitaram, DR For the Assessee : Shri K.A. Sai Prasad ORDER Per Smt. P. Madhavi Devi, J. M. This is Revenue s appeal for the A.Y 2011-12. In this appeal, the Revenue is aggrieved by the order of the CIT (A) in directing the AO to allow the exemption u/s 10B of the Act, even though the assessee has not received the ratification by the Board of Approval as per section 14 of the In .....

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3.71 crores and worked out deduction u/s 10B at ₹ 94,74,578 and the same was claimed. He observed that as per the provisions of section 10B of the Act, the deductin for an 100% EOU has to be approved by the Board appointed on behalf of the Central Govt. He observed that in the case of the assessee, the approval was given by the Development Commissioner, Visakhapatnam which should be further ratified by the Board of Approval as per section 14 of the Industries Development and the Regulatio .....

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ing from 10.10.11 to 9.11.2016 and that all the terms and conditions mentioned for permission remain unchanged and subject to prevailing trade policy. It was also submitted that the letter of ratification from STPI was not received for the relevant A.Y, though the assessee has complied with all the conditions. During the course of hearing also, the contentions were reiterated. The AO thereafter proceeded to follow the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Regency Cr .....

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subject to fulfilment of prescribed conditions i.e. ratification of the approval granted by the Development Commissioner by the Board of Approvals. It was stated that an approval granted by the Development Commissioner in the case of 100% EOU will be considered valid once such an approval is ratified by the Board of Approval for the EOU scheme. He also placed reliance upon the decision of the Hon'ble Delhi High Court in the case of CIT vs. Regency Creations Ltd (2013) (353 ITR 0326). 4. The .....

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nder the chairmanship as Secretary, Department of Electronics and further that the word Development Commissioner wherever it occurs shall be substituted by the word Chief Executive of the STP Society and that the letters BOA" wherever occurs shall be substituted by the letters (IMSC). It was further stated that the IMSC has delegated the powers to the Directors of STP to consider and approve the applications for setting up of STP units under the STP scheme vide order F.No.10(58)92/IP dated .....

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and further that vide letter No.1(1)06/IPH dated 7.9.2006, a clarification is issued by the Department of Information Technology, Govt. of India that no further ratification of approvals issued by the Directors of the STPI Unit is required from the Inter-Ministerial Standing Committee (IMSC). Thus, according to the learned Counsel for the assessee, the Board of Approval have been substituted by IMSC and it has been clarified that the ratification is not required from IMS and hence the assessee c .....

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ed a chart to demonstrate that the assessee got the approval as a 100% EOU vide letter dated 29.06.2006 which was further renewed vide letter dated 25.10.11 and that the assessee had claimed the deduction u/s 10B from A.Y 2007-08 onwards and the claim was allowed to the assessee u/s 143(3) of the Act for A.Ys 2007-08 & 2008-09. It was submitted that the AO had disallowed the claim for the first time in A.Y 2009-10, but the CIT (A) had granted relief which was accepted by the Revenue. Similar .....

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