TMI Blog2019 (1) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... -17 respectively. However, the revenue earned by the non-exempt unit/business has not deceased and has shown increase as noted above between the financial years 2012-13 to 2015-16. Tribunal had also examined technical manpower employed in the new unit and has noted that percentage of new employees in the SEZ unit was 83% and 64% during the period relevant to the assessment years 2011-12 and 2013-14. Clearly new employment opportunities and jobs were created. Business had grown and increased substantially on setting up of the new unit, which was a legitimate and wise business decision and not subterfuge and an illegal act. Tribunal has accepted that the new unit was a separate identity for its income to qualify for exemption under Section 10AA for it was not formed and created by ‘splitting up’ or ‘reconstructing’ the existing business. The new unit was also not formed by transferring any machinery or plant previously used. Fresh investment was made in the new unit. The revenue earning and profits generated were clearly attributable to the new unit. No substantial question of law arises for consideration - Decided against revenue - ITA No.824/2018 - - - Dated:- 4-12-2018 - MR. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of section 80-IA 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. 6. Sub-section (4) stipulates the conditions which an undertaking as a unit must fulfill to get benefit under Section 10AA of the Act. Thus the eligibility requirements are unit specific and not assessee specific. Conspicuously, the legislature in Section 10AA of the Act has referred to the unit of the assessee as a person eligible and entitled to exemption. Each unit in the SEZ must meet the conditions specified in clauses (i) to (iii) of sub-section (4) to Section 10AA of the Act. In case there are multiple units in the SEZ, each unit would, on satisfaction of the conditions, be entitled to exemption. Thus, the eligibility requirements in clauses are unit specific and not, unless so stipulated, assessee specific. 7. There is no dispute that the respondent-assessee fulfils the conditions in clauses (i) and (iii) of sub-section (4) of Section 10AA of the Act. We have to therefore examine whether the respondent-assessee satisfies the condition stipulated in clause (ii) to sub-section 4 of Section 10AA of the Act. 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd clause (ii) of sub-Section 2 of Section 10B, it was held:- Sub-section (1) refers to deduction of profit and gains of an undertaking. The deduction is to be allowed for a period of 10 years from the year in which undertaking begins to manufacture, produce etc. articles, things or computer software. The beginning and end points for claiming the deduction are stipulated. These have reference to the eligible undertaking. Sub-clause (ii) to section 10B(2) incorporates a negative condition and sates that the undertaking must not be formed by splitting up or reconstruction of business already in existence. Clause (ii) refers to the date on which the undertaking mentioned in sub-section (1) is created or formed. On the date of formation, the undertaking should not violate the condition stipulated in clause (ii) i.e. that it should not be created by splitting up or reconstruction of a business already in existence. Clause (ii) does not have any reference to the period of 10 years stipulated in sub-section (1) of Section 10B, after an undertaking is formed or created without violation of Clause (ii) to Section 10B(2). Clause (ii) to Section 10B(2) does not apply to the period, post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom taxable business Growth % Revenue from unit Growth % Total Revenue Growth % 2009-10 48,93,15,919 48,93,15,919 2010-11 64,21,36,965 31% 3,61,10,980 67,82,47,945 39% 2011-12 62,32,14,978 -3% 45,72,63,241 1166% 108,04,78,220 59% 2012-13 66,95,57,158 7% 60,88,25,616 33% 1,27,83,82,769 18% 2013-14 73,08,34,134 9% 89,68,09,135 47% 16,27,64,32,69 27% 2014-15 88,07,79,281 21% 1,24,18,87,704 38% 2,12,26,66,985 30% 2015-16 103,00,00,296 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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