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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether approval granted by the Development Commissioner to a hundred percent export oriented unit was valid for claiming deduction under Section 10B of the Income-tax Act, 1961.
Analysis: The statutory scheme initially vested approval of hundred percent export oriented units in the Board constituted under Section 14 of the Industries (Development and Regulation) Act, 1951. The record showed that the Government had delegated the approval function to the Development Commissioner, and the Central Board of Direct Taxes had issued a clarification stating that such approval would be treated as valid once ratified by the Board of Approval for the EOU scheme. The assessee's approval had been granted by the Development Commissioner and ratified in the manner contemplated by the circular.
Conclusion: The approval granted by the Development Commissioner was valid and the assessee was entitled to claim deduction under Section 10B.
Final Conclusion: The Revenue's challenge failed, and the denial of deduction under Section 10B was not sustained.
Ratio Decidendi: An approval for a hundred percent export oriented unit granted by the Development Commissioner, when issued under delegated powers and ratified as required by the administrative clarification, constitutes a valid approval for the purpose of deduction under Section 10B of the Income-tax Act, 1961.
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