Alternative section 10A deduction claim can be entertained and remanded for factual verification of eligibility and compliance.

An alternative deduction claim under section 10A, first raised before the first appellate authority after denial of section 10B relief, can be entertained where it requires separate examination of eligibility and statutory compliance. The earlier section 10B ruling did not govern the distinct procedure or conditions under section 10A. Because the claim depended on factual verification of the assessee's eligibility and fulfilment of procedural requirements, the matter had to be examined on merits by the Assessing Officer. The issue was therefore remanded for fresh consideration in accordance with law.

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Issues: Whether the assessee's alternative claim for deduction under section 10A of the Income-tax Act, 1961, raised for the first time before the first appellate authority after denial of deduction under section 10B, could be entertained and required examination on merits.

Analysis: The deduction originally claimed under section 10B was denied on the ground that approval by the Director, STPI was not the approval contemplated by the statutory provision. The alternative claim under section 10A was made before the first appellate authority for the first time. The reasoning adopted below treated the earlier decision on section 10B as governing section 10A as well, but the Tribunal found that the earlier decision dealt only with section 10B and did not decide the procedure or eligibility requirements under section 10A. Since the alternative claim involved examination of the assessee's eligibility and compliance with the procedural requirements for section 10A, the claim needed factual verification.

Conclusion: The alternative claim under section 10A was entertainable and had to be examined by the Assessing Officer; the matter was set aside and remanded for fresh consideration in accordance with law.

Ratio Decidendi: A fresh alternative claim raised before the first appellate authority can be entertained, and where its allowance depends on verification of eligibility and statutory compliance, the matter may be remanded to the Assessing Officer for adjudication on merits.

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