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TMI Blog2017 (5) TMI 832X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. The brief facts of the case as emanating from records are: The assessee is a partnership firm and is engaged in Computer Software Testing Services. The assessee received STPI permission on 26 March, 2009 and entered into legal agreement with STPI on 31 March, 2009. On 26-05-2009 the assessee received permission of relocation of STP unit from STPI. Accordingly, the assessee relocated its office premises from Gaikwad heights, Aundh , Pune to Abja Pavilion, DP Road, Aundh, Pune. The assessee filed its return of income for the impugned Assessment Year on 15-10-2010 declaring total income as Rs. 58,33,670/- after claiming deduction of Rs. 2,27,48,053/- u/s. 10A of the Act. The deduction claimed by the assessee was disallowed by the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r book. Initially, the assessee was having its office at Gaikwad Heights, Aundh, Pune. After obtaining STPI permission the assessee decided to shift its office to new location at Abja Pavilion, Parihar Chowk, Aundh, Pune. The same was allowed. The letter permitting relocation of STP unit is at page 86 of the paper book. The authorities below have erred in coming to the conclusion that the assessee has established STP unit by splitting up of existing business. In fact, it is the same unit from where the assessee was carrying on its business activities from inception on which the assessee has been granted STPI permission. There is no splitting up or reconstruction of the business. The ld. AR referred to CBDT Circular No. 1/2005 dated 06-01-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been amended from time to time and the dates have been extended. The ld. AR pointed that as per amendment brought in by Finance (No. 2) Act, 2009 the date has been extended to 1st day of April, 2012. Thus, to the assessment year under appeal the circular would apply. The ld. AR to strengthen his arguments draws support from the decision of Lucknow Bench of the Tribunal in the case of DCIT Vs. M/s. E-Soft Technologies Ltd. in ITA Nos. 251 & 895/LKW/2014 for the Assessment Years 20091-0 and 2010-11 decided on 14-08-2015. 5. On the other hand Shri Sanrat Rahi representing the Department vehemently defended the findings of Assessing Officer and Commissioner of Income Tax (Appeals). The ld. DR submitted that the Circular No. 1/2005 on which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground that the assessee has allegedly formed its STP unit after splitting up/reconstruction of business already in existence and that the assessee has transferred old machinery from existing unit to the STP unit. 9. A perusal of the Circular No. 1/2005 dated 06-01-2005 makes it clear that the unit already setup in Domestic Tariff Area subsequently converted into EOU shall be eligible for deduction u/s. 10B of the Act, after getting approval as 100% export oriented unit. The relevant provisions of the circular reads as under : "3. Representations have been received from various quarters as to whether an undertaking set up in domestic Tariff Area, which is subsequently approved as 100% EOU by the Board appointed by the Central Government ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under reference which applies to section 10B equally applies to section 10A of the Act. 11. The Hon'ble Karnataka High Court in the case of Commissioner of Income Tax Vs. Expert Outsource (P.) Ltd. (supra) has held that where the assessee has began operation prior to date of registration with STPI but export of goods commenced after registration with STPI, the assessee was eligible for deduction u/s. 10A and the ratio of CBDT Circular No. 1/2005 equally applies to the provisions of section 10A of the Act. The relevant extract of the findings of Hon'ble High Court reads as under : "4. In the instant case, the assessee began operations on 17th Dec., 2003 whereas the STPI was registered on 4th Aug., 2004. The STP authorities could also per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter necessary permissions were obtained from STPI. 12. The documents on record show that the entire turnover of the undertaking is from export. The ld. AR of the assessee has stated at the Bar that the STP unit commenced its business activities after relocating its office at new premises in May, 2009. During the financial year 2009-10, except for export turnover there was no other generation of income from STP unit. 13. In so far as the applicability of the circular after assessment year 2009-10 is concerned, we find that proviso to sections 10A and 10B have been amended from time to time and the date of allowability of deduction has been extended. Finance (No. 2) Act, 2009 has made amendment with retrospective effect from 01-04-2009 by s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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