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2016 (8) TMI 409 - ITAT DELHI

2016 (8) TMI 409 - ITAT DELHI - TMI - Disallowance of deduction claimed u/s 10A - Held that:- As noticed that for the year under consideration, the assessee is not hit by section 10A (9) of I.T. Act, as it stood omitted by the Finance Act 2003 w.e.f. 1.4.2004. Respectfully following the decision of this Tribunal in assessee’s own case, for asstt. year 2001-02 and circular No. 1 of 2005, we hold that the assessee is eligible for claim u/s 10A of I.T. Act for asstt. year 2005-06. - Loss relate .....

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by the revenue, that the assessee is eligible for claim u/s 10A of I.T. Act. Therefore we find no infirmity in the direction of the Ld. CIT(A)’s direction to AO to recompute benefit u/s 10A of I.T. Act. - ITA No. 283/Del/2012, CO No. 167/Del/2014 - Dated:- 2-8-2016 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER Department by : Shri Rajesh Kumar, Sr. DR Assessee by: Shri Vijay Mehta, CA, Mr. Anuj Kisnadwala, Adv ORDER Per Beena A Pillai, J. M. These are cross app .....

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has erred in directing the AO to verify the assessee s claim that the loss relates to the STPI unit by treating the loss on sale of assets of ₹ 14,06,578/- as business loss and to be considered for computation of deduction u/s 10A of the IT Act. 3. The appellant craves leave to add, alter or amend any ground of appeal raised above at the time of hearing. B. C.O. No.167/Del/2014 (Assessee s Cross Objections): 1. That on the basis of material on record, the Learned CIT(A) ought to have held .....

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43(2) were issued. The case was discussed by the Ld. A.O. During the assessment proceeding, the Ld. A.O. observed that the assessee is deriving income from business of development and sale of software products, as well as rendering software services. The assessee company was incorporated on 6.7.1995. The assessee shows received approval from STPI authorities on 28.3.2000. From assessment year 2001-02 onwards the assessee began to claim deduction u/s 10A of I.T. Act. From paragraphs 2.1 and 3 of .....

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the assessment order, the assessee preferred appeal before Ld. CIT(A). 2.3 Ld. CIT(A) though agreed with the view of the Assessing Officer that as no new unit was set up on 16.03.2000 and the assessee had converted its existing domestic unit to STPI unit, he held that assessee is eligible for deduction u/s. 10A of the Act for relevant assessment year. In order to arrive at this conclusion, the Ld. CIT(A) relied upon the order of his predecessor for AY. 2002-03, who held that there is no bar in .....

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the date of conversion for the unexpired period of 10 years starting from A.V. 1996-97 in light of Circular No. 1 of 2005 issued by CBDT dated 06.01.2005. iii) Provisions of S.10A(9) of the Act would apply to the assessee and the assessee would not be eligible to claim deduction u/s.10A of the Act if on the last day of the previous year the shares of company carrying not less than 51% of the voting power are not held by persons who held the shares carrying not less than 51% of the voting power .....

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for Assessment Year 2002-03 has upheld the finding that the existing domestic unit was converted into STPI unit. Ld. A.R. also submitted that the Revenue did not file any appeal before this Tribunal for Assessment Year 2002-03 in respect of findings of Ld. CIT(A) that the assessee can claim deduction u/s 10A where deduction u/s 80HHE was earlier claimed and allowed, provided conditions u/s 10A were satisfied. 4. On the contrary, Ld. D.R. relied on the orders of authorities below. 5. Ld. A.R. sub .....

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tion u/s 80HHE of I.T. Act was claimed for the first time). He further submitted that section 10A(a) of the Income Tax Act was omitted and did not exist on the statute book for assessment year 2005- 06. 6. We have heard the rival contentions and perused the material available on record. The assessee has given the chronology of events in support of his contention. This is extracted herein below for ready reference:- (1) 06.07.1995: Assessee Company incorporated and started domestic unit engaged i .....

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02.2000: Advance received from M/s Direct Credit Exchange Ltd. UK. This was first ever foreign exchange remittance in respect of export received by assessee. 07. 02.2000: New EEFC account opened 14.3.2000: Board resolution permitting authorized people to sign documents in connection with registration of export unit with STPI. 16.3.2000: Application made to STPI Authority for approval. (3). 28.03.2000: Approval received from STPI (Authority.) 6.1 We find that ITAT in assessee s own case for asstt .....

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form Assessment Year 1996-97. This finding of the First Appellate Authority is not challenged by the revenue. The Assessment Year 2001-02 falls within the unexpired period of 10 years, from the year set up of the first domestic unit which was in the Assessment Year 1996-97. Hence the assessee is otherwise eligible for deduction u/s 10A for the year under consideration. This is also clear from a plain reading of the Circular of the CBDT, Circular No.1 of 2005 dated 6.01.2005. Hence, in our view i .....

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al, Revenue has objected to direction issued by Ld. CIT(A) to Ld. AO to verify the assessee s claim that the loss relates to the STPI unit by treating the loss on sale of assets of ₹ 14,06,578/- as business loss and to be considered for computation of deduction u/s 10A of the IT Act. The Ld. CIT(A) observed as under: x……However, applying Explanation 1 to section 10A(9) which has been omitted with effect from 1.4.04 the CIT(A) has held that the appellant was not entitled to th .....

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