TMI Blog2016 (7) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... are dismissed. Similarly, the appeal filed by the Revenue is against the order of CIT(A) in allowing the claim of deduction under section 10A of the Act is also dismissed. - ITA No.1098/PN/2011, ITA No.1149/PN/2011 - - - Dated:- 29-4-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Assessee : Shri M.V. Lonkar For The Revenue : Shri Hitendra Ninawe ORDER PER SUSHMA CHOWLA, JM: The cross appeals filed by the assessee and the Revenue are against order of CIT(A), Aurangabad, dated 30.06.2011 relating to assessment year 2008-09 against order passed under section 143(3) of the Income-tax Act, 1961 (in short the Act ). 2. The cross appeals filed by the assessee and the Revenue were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee in ITA No.1098/PN/2011 has raised the following ground of appeal:- 01. The learned Commissioner of Income Tax (Appeals), Aurangabad erred in holding that the assessee company is not eligible for exemption of ₹ 30,70,367/- u/s 10B of the Income Tax Act, 1961. Hence claim of assessee amounting to ₹ 30,70,367/- may be allowed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per section 10B of the Act. The requisite CBDT circular dated 31.03.2006 is reproduced by the Assessing Officer at pages 3 to 6 of the assessment order. Thereafter, the Assessing Officer considered the issue whether the assessee was eligible for deduction under section 10A or 10B of the Act. After referring to the provisions of the Act, the Assessing Officer vide para 5 observed that in order to justify the claim of deduction under section 10B of the Act, it was found that the assessee company was engaged in development of software, which had been exported. Further, the said company was 100% software export oriented unit situated at Software Technology Park, Aurangabad and registered under Software Technology Park Scheme approved by STPI, Aurangabad. The Assessing Officer was of the view that since the assessee was so situated in Software Technology Park under the Software Technology Park Scheme of Aurangabad, he fulfilled the conditions of section 10A(2) of the Act read with Explanation (2)(vii) of section 10A of the Act. Since the approval was granted to the assessee under section 10A of the Act and not under section 10B of the Act by STPI, Aurangabad, which was authorized an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n allowing the claim of deduction under section 10A of the Act though no such claim was made in the return of income. 11. The learned Authorized Representative for the assessee pointed out that the issue raised in the present appeal is squarely covered by the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Western Outdoor Interactive (P.) Ltd. in IT Appeal Nos.1150, 1200 1269 of 2010, judgment dated 14.08.2012 and Pune Bench of Tribunal in ITO Vs. Cat Labs Pvt. Ltd. in ITA No.131/PN/2013, relating to assessment year 2009-10, order dated 26.02.2014. 12. The learned Departmental Representative for the Revenue on the other hand, pointed out that the assessee first is not entitled to the claim of deduction under section 10B of the Act. Further, he pointed out that no deduction under section 10A of the Act could be allowed to the assessee as no such claim was made in the return of income. 13. We have heard the rival contentions and perused the record. The assessee before us was admittedly a STPI unit registered under Software Technology Park Scheme of STPI, Aurangabad. This factual aspect of it being STPI unit is admitted by both the authorities below and there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either, the specific procedure enacted for that purpose has to be followed. There is nothing in any of the circulars or instructions relied on by the Tribunal in all the orders, implying that approval for purposes of an STP also entitled the unit to a benefit under section 10B. The orders of the Tribunal are consequently, erroneous, and it s reasoning unsupportable. 15. The Tribunal after taking note of the decision of Hon ble Delhi High Court in CIT vs. Regency Creations Ltd., (supra) observed that the assessee was not entitled to the claim of deduction under section 10B of the Act observing 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 deduction u/s 10B of the Act because of the presence of Explanation 2(iv) below section 10B of the Act. The assessee has canvassed that it s 100% EOU is approved by the Director, STPI and therefore it should be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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. 12. In the proceedings before the CIT(A), assessee raised an alternate plea that it be allowed deduction u/a 10A of the Act in place of section 10B of the Act as the undertaking of the assessee is approved by the Director, STPI. The CIT(A) denied the alternate plea of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .56F for the claim of deduction u/s 10A of the Act. It has been submitted that the CIT(A) called for a remand report from the Assessing Officer also, so however, the Assessing Officer declined to examine the same on the ground that the prescribed Audit Report is required to be furnished along with the return of income in order to claim the deduction u/s 10A of the Act. The learned counsel submitted that having regard to the factual matrix the claim of the assessee u/s 10A of the Act has been unjustly shutout. 15. On the other hand, the learned CIT-DR has primarily reiterated the stand of the CIT(A) in not entertaining the claim of deduction u/s 10A of the Act, which has been noted by us in the earlier paragraphs and the same is not being repeated for the sake of brevity. 16. We have carefully considered the rival submissions. In the present case, in the past years assessee has been allowed the claim of deduction u/s 10B of the Act. In the return of income filed for the assessment year under consideration i.e. 2010-11 also assessee claimed deduction u/s 10B of the Act in relation to the profits derived from its STPI unit. This claim of deduction came to be denied on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee claimed that it has undertaken export of computer software manufactured by it and its unit is registered with Director, STPI. The approval granted by Director, STPI has been held to be a sufficient compliance with requirements of section 10A(2)(i)(b) of the Act even as per the CBDT vide Instruction No.1 of 2006 dated 31.03.2006. Therefore, prima-facie the 100% EOU of the assessee, being registered with STPI, is eligible to stake claim for deduction u/s 10A of the Act, provided the other conditions laid down in section 10A of the Act are satisfied. Therefore, in conformity with the judgement of the Hon ble Delhi High Court in the case of Valiant Communications (supra), we deem it fit and proper to remand the matter back to the file of the Assessing Officer for verifying the claim of the assessee for deduction u/s 10A of the Act as per law. The Assessing Officer shall consider the Form No.56F furnished by the assessee before the CIT(A) and such other material and submissions that the assessee may put-forth in order to justify its claim of deduction u/s 10A of the Act. Needless to say, the Assessing Officer shall allow a reasonable opportunity of being heard to the assessee before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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