TMI Blog2005 (11) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... ifying criteria, as well as those stipulated under the Act, only of and from the date on which it stands recognized as such. The assessee may, in a given case, export 100 per cent of its bought out goods, but that would not entitle it for exemption u/s 10B; the export to be reckoned for the purpose being only in respect of goods manufactured/produced by it. Therefore, as long as the profits from the trading activity are not considered for deduction u/s 10B, we do not consider any adverse inference as enuring to the assessee on account of the same. This disqualification is, again, therefore, superfluous. We fail to understand as to how this inference stands drawn in the facts and circumstances of the present case; there being no splitting-up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er reference is 1999-2000. 2. As these appeals were heard together and involve a common issue, these are being disposed of by a common order. 3. The only issue under appeal relates to the allowance of exemption under s. 10B of the IT Act, 1961 ( Act hereinafter), at Rs. 19,57,116 (ITA No. 1263/Ahd/2005) and Rs. 16,00,825 (ITA No. 1264/Ahd/2005), i.e., as claimed by the assessee(s) which stood earlier disallowed by the AO vide his order under s. 143(3) of the Act, dt. 28th March, 2002 and 29th March, 2002, respectively. 4. The facts of the case in brief are that this matter had been earlier heard by the first appellate authority and the assessee's appeal allowed vide order dt. 9th Sept., 2002. In second appeal, the Tribunal (Ahmedabad Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, as raised by the AO, with regard to the non-satisfaction of the prerequisite conditions by the assessee (for a valid claim under s. 10B), is properly countered with evidence, already placed on record and which stands duly cognized and appreciated by the learned CIT(A) while adjudicating in the matter. Specifically: (a) The assessee's export sales being not out of India but only to another 100 per cent EOU: Reference in this context was made to paras 9.10(c), 9.11, 10.2(b) of Chapter IX of the Exim Policy 1992-1997, which deems the sale by EOU to another EOU as export, to be counted towards the fulfillment of its obligation in respect of Net Foreign Exchange Earning (NFEE) and Export Performance (EP), provided the same (goods sold) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt authority subsequent to the date the said unit commenced its production, and simultaneously restricting the exemption to the unexpired period of the 10 successive years therefrom. 6. We have heard the parties before us and also perused the material on record. We find, for the reasons aforestated, as also noted hereafter, that each of the three basic defects in the assessee's claim for exemption under s. 10B stands effectively met by the assessee. 6.1 As regards the objection No.1, the section does not stipulate the requirement for the sale proceeds of the goods produced by the assessee's undertaking to be received in convertible foreign exchange and as a necessary precondition for being exigible as a qualifying unit, as, for exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he undertaking, it may be appreciated, stands recognized as an EOU, and thus subject to its qualifying criteria, as well as those stipulated under the Act, only of and from the date on which it stands recognized as such. Further, sub-s. (2) of 10B which enumerates the qualifying criteria, vide cl. (ia) thereof, requires the export of at least 75 per cent of the sale of goods manufactured or produced by the EOU. As such, the criteria of minimum level of export is only with reference to the goods manufactured/ produced by the undertaking, and independent of any other activity, including the trading activity, engaged in by the assessee. The assessee may, in a given case, export 100 per cent of its bought out goods, but that would not entitle i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undue advantage is availed by the existing units, which would otherwise qualify for exemption, though only at or with reference to a future date, and not from the first day of their operations. 7. In view of the foregoing, we find that none of the debilitating defects in the assessee's claim under s. 10B as pointed out by the Revenue survive and hence, there is no infirmity in the order of the learned CIT(A), which is hereby upheld. The learned Departmental Representative has also, during the course of hearing, pointed out that the assessee has not substantiated its claim by maintaining separate accounts in respect of its eligible undertaking. While we admit this objection of the Revenue as valid, it would not, thereby, disentitle the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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