STPI approval can satisfy section 10B requirements for export-oriented software units on identical facts.

Deduction under section 10B was treated as unavailable only if the approval requirement was not met, but STPI approval for a 100% export-oriented software unit was accepted as sufficient on the facts discussed. The analysis notes that the same claim had already been allowed in the preceding year on identical facts, and the Revenue had not challenged that relief. It further records reliance on CBDT Instruction No. 1 of 2006 and later Tribunal decisions supporting STPI approval as meeting the statutory requirement, after distinguishing an earlier contrary view. The deduction was therefore not to be denied merely because approval was not granted by the Board under section 14 of the Industries (Development and Regulation) Act, 1951.

---

---

Issues: Whether deduction under section 10B could be denied merely because the assessee's 100% export oriented unit was approved by Software Technology Park of India and not by the Board appointed under section 14 of the Industries (Development and Regulation) Act, 1951, and whether the Revenue could displace the allowance already accepted in the assessee's earlier year on identical facts.

Analysis: The assessee was engaged in manufacture, customisation and export of software and had obtained STPI approval as a 100% export oriented undertaking. The assessment authority denied the deduction only on the ground that the approval was not from the Board contemplated by section 14 of the Industries (Development and Regulation) Act, 1951. The appellate authority, however, had already allowed the claim in the preceding assessment year on the same facts. The Tribunal noted that the Revenue had not challenged that earlier relief and that the appellate finding for the year under appeal followed the same reasoning. It also noted that the appellate authority had relied on CBDT Instruction No. 1 of 2006 and later Tribunal decisions treating STPI approval as sufficient for the purposes of section 10B, after distinguishing the earlier contrary view.

Conclusion: Deduction under section 10B could not be denied on the sole ground that the undertaking was approved by STPI instead of the Board under section 14 of the Industries (Development and Regulation) Act, 1951, and the Revenue's appeal was rejected.

Ratio Decidendi: Where the competent appellate authority has consistently accepted STPI approval as satisfying the approval requirement for section 10B in identical facts, and no contrary material is shown, the deduction cannot be disallowed merely for want of formal approval from the Board under section 14 of the Industries (Development and Regulation) Act, 1951.

---