TMI Blog2019 (9) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... bed is that the eligible unit should begin to manufacture or produce articles/things or provide any services during the previous year relevant to any assessment year commencing on or after 01-04-2006. The previous year for the assessment year 2006-07 is the financial year 1-04-2005 to 31-03-2006, meaning thereby, the manufacture/production etc., should be commenced from 01-04-2005 onwards. In the instant case, the assessee has commenced its operation on 31-10-2005. Hence, it fulfills the first condition prescribed u/s. 10AA of the Act. Accordingly, the view taken by the tax authorities that the production should have commenced on or after 01-04-2006 is not in accordance with law and the same is set aside. Deduction u/s. 10AA is allowed @ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant by: Shri Sanjay R. Parikh, ld.AR Respondent by: Shri Chaitnya Anjaria, ld.DR ORDER Per B.R. Baskaran, Accountant Member Both the appeals filed by the assessee are directed against the separate orders both dated 22-02-2018 passed by Ld CIT(A)-20, Mumbai and they relate to the assessment years 2011-12 and 2013-14. 2. Since common issue is involved in both the appeals, they were heard together and they are being disposed of by this common order, for the sake of convenience. In both the A.Ys the assessee is aggrieved by the decisions of Ld CIT(A) in confirming the disallowance of deduction claimed by the assessee u/s. 10AA of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of convenience, I extract below provisions of section 10AA of the Income Tax Act, 1961 relevant for the years under consideration. 10AA. (1) Subject to the provisions of this section, in computing the total income of an assessee, being an entrepreneur as referred to in clause (j) of section 2 of the Special Economic Zones Act, 2005, from his Unit, who begins to manufacture or produce articles or things or provide any services during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2006, a deduction of- (i) Hundred per cent of profits and gains derived from the export, of such articles or things or from services for a period of five consecutive assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with law and the same is set aside. 7. Further, it can be noticed that the deduction u/s. 10AA is allowed @ 100% for the first five consecutive assessment years and then @ 50% for further five assessment years and thereafter. In clause (ii), it is stated that the assessee is also eligible for deduction for the next five consecutive assessment years also and in those years the assessee is required to create/reserve Special Economic Zone Re-investment Reserve Account , meaning thereby such kind of reserve is not required to be created during the first ten years claim for deduction. The word next , in our view, refers to the years after completion of two sets of five years, meaning thereby, from 11th year onwards. Hence the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receding five assessment years, following the decisions referred above, I am of the view that the tax authorities are not justified in denying the claim for deduction u/s. 10AA to the assessee. Even otherwise, the very fact that the Development Commissioner has extended approval would signify that the assessee has complied with the conditions. 10. In view of the foregoing discussions, I set aside the orders passed by the ld. CIT(A) in both the A.Ys under consideration on the impugned issue and direct the Assessing Officer to allow the claim u/s 10AA of the Act @ 50% as claimed by the assessee in the assessment proceedings. 11. In the result, both the appeals of assesses are allowed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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