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DEDUCTIONS UNDER SECTION 10B OF INCOME TAX ACT, 1961 TO EXPORT FOR 100% EOU

Income Tax - By: - Mr. M. GOVINDARAJAN - Dated:- 12-10-2017 - Newly established 100% EOU Section 10B of the Income Tax Act, 1961 ( Act for short) provides special provisions in respect of newly established 100% Export Oriented Undertakings. Section 10B(1) provides that subject to the provisions of this section, a deduction of such profits and gains as are derived by a 100% export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive asses .....

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he undertaking shall be entitled to the deduction referred to in this sub-section only for the unexpired period of aforesaid ten consecutive assessment years. For the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software. No deduction under this section shall be allowed to any undertaking for the assessment year beginn .....

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formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation 2(iv) to Section 10B defines the expression Export oriented unit as an undertaking which has been approved as a hundred per cent export-oriented undertaking by the Board appointed in this behalf by the Central Government in exercise of the powers conferred by section 14 of the Industries (Development and Regulation) Act, 1951 and the rules made under that Act; In Income Tax Officer V. Medn .....

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claim of deduction under section 10B against the profits and gains derived by 100% EOU from export of articles on the ground that the clause (iv) of Explanation 2 to Section 10B requires the assessee to be approved as 100% EOU by the Board appointed in that behalf. The Assessing Officer noted that an approval granted by the Development Commissioner will be considered only valid if such approval is ultimately ratified by the Board of Approval. The Assessing Officer observed that the assessee fai .....

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Officer towards denial of deduction under section 10B of the Act. But he allowed the alternative claim of the assessee under section 10A of the Act since he was satisfied that the conditions prescribed for eligibility of deduction was satisfied. The Revenue filed appeal against the order of Commissioner (Appeals) and the assessee filed cross objections for the same. The Revenue submitted the following before the Tribunal- The Commissioner (Appeals) misdirected itself in law allowing the alternat .....

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een done in the present case; The ratification of action of the Development Commissioner by the Board of Approval is necessary to avail of the deduction under section 10B of the Act; The assessee pointed out to the Tribunal the copy of approval/ratification of the assessee s unit as 100% EOU granted vide lr. dated 14.03.2013 and put forth the following arguments before the Tribunal- The assessee applied to the Development Commissioner to whom the powers have been delegated in this behalf; Subseq .....

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