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TMI Blog2015 (9) TMI 1684X X X X Extracts X X X X X X X X Extracts X X X X ..... s and prays for condonation of delay for both the appeals. We have perused the reasons and are satisfied that there is a reasonable cause for the delay in filing of the appeals. In the interest of justice, we condone the delay in filing of these appeals. The petitions for condonation of delay are allowed and the appeals are admitted. 3. The only issue in the appeal of the assessee for the assessment year 2008-09 is that Commissioner of Income Tax (Appeals) erred in determining the total income of the assessee as Nil as against loss of Rs. 2,20,26,369/- reported by the assessee. Counsel for the assessee at the outset submits that assessment made under section 144 of the Act, as the assessee could not produce books of accounts before the Assessing Officer. Counsel submits that assessee company underwent a rough patch due to labour unrest and a new management has taken control of the business affairs. The books of accounts and other records could not be traced immediately since the management personnel and the key persons who handled the accounts and financial affairs have left the company. She submits that company was also not functioning for some time due to circumstances beyond th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice, we are of the opinion that the assessment has to be redone afresh by the Assessing Officer. Thus, we set aside the orders of lower authorities and restore the assessment back to the file of the Assessing Officer with a direction to complete the assessment de novo and in accordance with law, after providing adequate opportunity to the assessee. 6. The only issue in the appeal of the assessee for the assessment year 2009-10 is with regard to denial of exemption under section 10B of the Act. The Assessing Officer while completing the assessment denied exemption under section 10B of the Act stating that as per section 10B 100% export oriented unit means the undertaking which has been approved as 100% 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 & Regulation) Act, 1951 and rules made under that Act. The Assessing Officer was of the opinion that since the approval was not given by the Board set up under Industries (Development & Regulation) Act, 1951 approval obtained by the assessee cannot be accepted as approval under section 10B of the Act for the purpose of claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatus as a 100% EOU for the period from 23.03.2010 to 22.03.2015 is also furnished. Counsel submits that no separate approval procedures have been laid down in the Foreign Trade Policy & Handbook of Procedures relating to Export Oriented Units (EOUs) / under the EXIM Policy for SEZ. 8. Counsel for the assessee before us further submits that what was placed before the Commissioner of Income Tax (Appeals) was only renewal of recognition and in fact the assessee is having green card approval from 05.05.2005 to 23.02.2010, a copy of which is placed before us. Referring to such recognition, counsel submits that assessee had recognition right from 2005 to 2010 which was renewed subsequently on 23.03.2010 for another five years till 23.10.2015. Counsel for the assessee places reliance on the decision of Delhi High Court in the case of CIT Vs. Tehnovate E Solutions P.Ltd. (354 ITR 110) and submits that assessee is entitled to deduction under section 10B of the Act or in the alternative under section 10A of the Act. 9. Learned Departmental Representative vehemently supports the orders of lower authorities. 10. Heard both sides. Perused orders of lower authorities and the decisions relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apani Street, T.Nagar, Chennai by issue of green card. STPI has received new orders when they have been executed and assessee received export proceeds. Thus Commissioner of Income Tax (Appeals) allowed exemption claimed by the assessee. 11. Departmental Representative submits that STPI unit does not have new computer system and other equipmentsfor carrying on the work during the year. He submits that assessee only utilized existing facilities of the DTI unit. He also submits that employees also belonged to the DTI unit and STPI unit hired such manpower temporarily. STPI Unit did not recruit any employees in its business during the year. He further submits that evidence filed by the assessee only shows that purchase of computers by the DTI unit and not by the STPI unit. Departmental Representative further submits that application for STPI registration available in page 5 of the assessee's paper book shows that it was only conversion of existing unit as STPI unit during the year. This is a case of splitting of existing unit and not a new unit established by the assessee. Therefore, he pleads for sustaining the order of the Assessing Officer in denying exemption under section 10B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaking, which reads as under:- " hundred per cent export-oriented undertaking" means 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 (65 of 1951), and the rules made under that Act" 15. As could be seen from the above definition, in order to be 100% export-oriented undertaking and claim exemption under section 10B, an undertaking must have been approved 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 this case, the assessee is a unit recognized by the STPI. Nothing is placed on record to suggest that this is a hundred percent export oriented undertaking approved by the Board appointed by the Central Government under section 14 of the Industries (Development and Regulation) Act, 1951. An identical situation arose in the case of CIT Vs. Regency Creations Ltd. (79 DTR 24) and the Hon'ble Delhi High Court held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in the proceedings before them. 17. In view of our above findings, we set aside the order of the Commissioner of Income Tax (Appeals) and remit the matter back to the file of the Assessing Officer to examine the claim of the assessee under section 10B of the Act in the light of the decision of the Hon'ble Delhi High Court in the case of Regency Creations Ltd. (supra) after providing adequate opportunity to the assessee. The alternative plea made by the assessee may also be examined by the Assessing Officer in case the assessee is not entitled for exemption under section 10B of the Act." 11. Counsel for the assessee places reliance on the decision of Delhi High Court in the case of CIT Vs. Technovate E.Solutions P.Ltd. (supra). That decision is with regard to deduction under section 10A of the Act wherein the Delhi High Court also considered the decision of Regency Creations Ltd. (supra) while disposing of the case. On hearing both the sides, we are of the view that the matter has to be looked into by the Assessing Officer in the light of the decisions of Hon'ble Delhi High Court in the case of Regency Creations Ltd. (supra) and Technovate E.Solutions P.Ltd. (supra). It was t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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