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2018 (2) TMI 505

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..... an a very detailed or lengthy order, but there should be some reasoning recorded by the lower Authority for granting relief to the assessee. We are unable to find any infirmity in the arguments advanced on behalf of the Department, that no reasons have been recorded for allowing the claim of the assessee, this legal infirmity has, in fact, prejudicially affected the case of the assessee before us. Hence, we are unable to sustain the order of the Ld. CIT(A) and for the afore-recorded reasons, we set aside the impugned order and remit back the issues in dispute to the file of the AO with the direction to decide the issues in dispute afresh - Decided in favour of revenue for statistical purposes. - I.T.A. Nos.6410/Del/2015 And I.T.A. Nos.6411/Del/2015 - - - Dated:- 5-2-2018 - Shri H.S. Sidhu, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Revenue : Ms. Ashima Neb, Sr. DR For the Assessee : None ORDER PER H.S. SIDHU : JM The Revenue has filed these Appeals against the respective impugned Orders of the Ld. CIT(A)-14, New Delhi relevant to assessment year 2010-11 in respect of different assesses. 2. Since the issues involved in th .....

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..... f facts and merit of the case and without giving proper justification for the fulfillment of the conditions as stipulated u/s. 10A of the Act. She further stated that Ld. CIT(A) has obtained the Remand Report from the AO and the AO objected to the same, however, the Ld. CIT(A) has ignored the same, which is contrary to the provisions of law and proves that that Ld. CIT(A) in a hurry manner has passed the non-speaking and laconic order. She further draw our attention towards the assessment order passed by the AO especially the finding given at page no. 5 wherein the AO has observed that assessee has not given any submission or documents or any revised compaution of income claiming the deduction u/s. 10A of the I.T. Act in support of its claim that why the deduction if not allowed u/s. 10B, may be given u/s. 10A of the Income Tax Act, 1961. She also stated that AO observed that with regard to the other letter dated 20.3.2013 submitted by the AR of the assessee to consider its claim according to the circular no. 01/2013 dated 17.1.2013, the A.R. himself submitted that the issue in the Circular was different but the motive was same to grant deduction u/s. 10B to the Assessee. In view o .....

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..... on ble Jurisdictional High Court of Delhi in the ITA No. 1295/2008 in the case of CIT vs. Mantec Consultants (P) Ltd. and in the case of CIT vs. Regency Creation Ltd. while denying the claim of exemption u/s. 10B of the appellant the Hon ble High Court modified its order dated 04.01.2013 wherein it has directed the Hon ble ITAT to examine whether the assessee in that case was entitled to the benefit of section 10A of the Act I am of the opinion that the appellant is entitled for the alternative claim of exemption u/s. 10A of the Act as he fulfills the conditions prescribed u/s. 10A of the Act. Accordingly, the grounds of appeal are allowed and Ld. AO is directed to allow the claim of exemption u/s. 10A of the Act. Hence, all the above grounds of appeal are allowed. 7.1 For the sake of convenience, we are also reproducing the relevant provisions of section 10A of the Income Tax Act, 1961 as under:- 10A. Special provision in respect of newly established undertakings in free trade zone, etc.- (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for .....

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..... icles or things or computer software, as the case may be, and thereafter, fifty per cent of such profits and gains for further two consecutive assessment years, and thereafter; (ii) for the next three consecutive assessment years, so much of the amount not exceeding fifty per cent of the profit as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the Special Economic Zone Re-investment Allowance Reserve Account ) to be created and utilised for the purposes of the business of the assessee in the manner laid down in sub-section (1B) : Provided that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139. (1B) The deduction under clause (ii) of sub-section (1A) shall be allowed only if the following conditions are fulfilled, namely:- (a) the amount credited to the Special Economic Zone Re-investment Allowance Reserve Account is to be utilised- (i) for the purposes of acquiring new machinery or plant which is first put to use b .....

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..... within the period specified in that section; (iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. Explanation.-The provisions of Explanation 1 and Explanation 2 to sub-section (2) of section 80-I shall apply for the purposes of clause (iii) of this sub-section as they apply for the purposes of clause (ii) of that sub-section. (3) This section applies to the undertaking, if the sale proceeds of articles or things or computer software exported out of India are received in, or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year or, within such further period as the competent authority may allow in this behalf. Explanation 1.-For the purposes of this subsection, the expression competent authority means the Reserve Bank of India or such other authority as is authorised under any law for the time being in force for regulating payments and dealings in foreign exchange. Explanation 2.-The sale proceeds referred to in this sub-section shall be deemed to have been received in India where such sale proceeds are credited to a se .....

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..... ard or set off where such loss relates to any of the relevant assessment years ending before the 1st day of April, 2001; (iii) no deduction shall be allowed under section 80HH or section 80HHA or section 80-I or section 80-IA or section 80-IB in relation to the profits and gains of the undertaking; and (iv) in computing the depreciation allowance under section 32, the written down value of any asset used for the purposes of the business of the undertaking shall be computed as if the assessee had claimed and been actually allowed the deduction in respect of depreciation for each of the relevant assessment year. (7) The provisions of sub-section (8) and subsection (10) of section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in this section as they apply for the purposes of the undertaking referred to in section 80-IA. (7A) Where any undertaking of an Indian company which is entitled to the deduction under this section is transferred, before the expiry of the period specified in this section, to another Indian company in a scheme of amalgamation or demerger,- (a) no deduction shall be admissible under this section to the amal .....

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..... on in respect of export by the undertaking] of articles or things or computer software received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include freight, telecommunication charges or insurance attributable to the delivery of the articles or things or computer software outside India or expenses, if any, incurred in foreign exchange in providing the technical services outside India; (v) free trade zone means the Kandla Free Trade Zone and the Santacruz Electronics Export Processing Zone and includes any other free trade zone which the Central Government may, by notification in the Official Gazette,specify for the purposes of this section; (vi) relevant assessment year means any assessment year falling within a period of ten consecutive assessment years referred to in this section; (vii) software technology park means any park set up in accordance with the Software Technology Park Scheme notified18 by the Government of India in the Ministry of Commerce and Industry; (viii) special economic zone means a zone which the Central Government may, by notification in the Official Gaz .....

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..... and laconic order. In our view, it is true that requirement of stating reasons for judicial orders necessarily does not mean a very detailed or lengthy order, but there should be some reasoning recorded by the lower Authority for granting relief to the assessee. In view of the above, we are unable to find any infirmity in the arguments advanced on behalf of the Department, that no reasons have been recorded for allowing the claim of the assessee, this legal infirmity has, in fact, prejudicially affected the case of the assessee before us. Hence, we are unable to sustain the order of the Ld. CIT(A) and for the afore-recorded reasons, we set aside the impugned order and remit back the issues in dispute to the file of the AO with the direction to decide the issues in dispute afresh, in accordance with law, after giving adequate opportunity of being heard and after considering the relevant provisions of the Act alongwith the documents / evidences filed by the Assessee. Assessee is also directed to furnish all the evidences and documents before the AO to substantiate his claim u/s. 10A of the Act. In the result, the ITA No. 6410/Del/2015 (AY 2010-11) stands allowed for statistical purpo .....

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