TMI Blog2017 (8) TMI 1405X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are exported to foreign country. Further the assessee company also fulfills all other terms & conditions laid down in 25 section 10AA of the I.T.Act, 1961 and as such deduction is claimed as per provisions of law and allowable as such. In that view of the matter, taking into consideration the circular issued by the Ministry of Commerce of Industry under the SEZ Rules, 1976 the view taken by the authorities is required to be confirmed. - Decided in favour of the assessee against the department. - D.B. Income Tax Appeal No. 222/2012, D.B. Income Tax Appeal No. 151/2015, D.B. Income Tax Appeal No. 66/2016, D.B. Income Tax Appeal No. 68/2016, D.B. Income Tax Appeal No. 69/2016, D.B. Income Tax Appeal No. 70/2016 - - - Dated:- 24-8-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax-I Vs. M/s. Goenka Diamond Jewellers Ltd. in ignorance of Section 10AA of the Act of 1961 which applies if assessee is involved in manufacturing or service. (ii) Whether trading can be treated to be service so as to apply Section 10AA of the Act of 1961? D.B. Civil Income Tax Appeal No.68/2016 admitted on 31.01.2017 (i) Whether the Tribunal was justified in not adjudicating the appeal on its merits and dismissing the same merely by relying upon its own order passed in the case of the assessee for the assessment year 2007-08 itself, without at all considering the specific findings recorded by Assessing Officer as per which the assessee was not entitled for deduction u/s 10AA of the Act of ₹ 3,49,54,102/-? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction of ₹ 7,07,51,730/- u/s 10AA of the act on purely trading activity? (ii) Whether the Tribunal has erred by quashing the order of CIT and thereby enhancing the scope of the word Service by adopting the definition of word Service from Section 2(z) and second Schedule of SEZ Act, 2005 and Rules, 76 of SEZ Rules, 2006, ignoring that deliberately the same was not defined by the legislators under the Income Tax Act and a literal meaning of the word Service was rightly taken by the CIT? D.B. Civil Income Tax Appeal No.115/2016 admitted on 08.11.2016 1. Whether the Tribunal was justified in allowing the deduction of ₹ 6,71,89,986/- u/s 10AA of the act without at all considering the specific findings recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y affected and also that several of their orders are held up due to the restriction on trading on account of the above instruction. Taking cognizance of these representations, in partial modification of the abovereferred Instruction dated 24th March, 2006, it has been decided that while units in the Special Economic Zones who hold approval to do trading activities will be allowed to carry out all forms of trading activity, the benefits under Section 10AA will exclude trading other than trading in the nature of reexport of imported goods. Appropriate amendments in this regard are being issued. 2. In the meantime, sourcing from domestic area may be permitted by units in the SEZs which are allowed to do trading, subject to this circular b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of Section 10AA. The term Service has been examined by Ld. A.O. on the basis whether mere purchase sale with no value addition as done by the assessee can be termed services. However there is no reason to deviate far from the immediately available definition of Services under the SEZ Act. (given that the Income Tax Act, 1961 does not define the term services ) and, therefore in accordance with Section 51 of SEZ Act, 2005 the definition given in SEZ Act, 2005 will apply moreso when explanation to rule 76 clearly provides Trading for the purposes of the second schedule of the Act, (by which Section 10AA inserted in I. T. Act, 1961) shall mean import for the purposes of re-export. The Ld. A.O. in assessment order discussed ir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other terms conditions laid down in 25 section 10AA of the I.T.Act, 1961 and as such deduction is claimed as per provisions of law and allowable as such. The Ld. A.O. is wrong and has erred in law in disallowing the entire claimed deduction u/s 10AA which was allowed by him in A.Y. 2007-08 and in accordance with Section 10AA (i) (i) the assessee company was entitled to hundred percent exemption of its profit and gains from the said business for a period of five consecutive years as there is absolutely no change in any of the facts of the case. The Ld. CIT (A) after examining all the above provisions has allowed the claimed deduction u/s 10AA which order is in accordance with law having no infirmity and deserves to be confirmed. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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