2014 (7) TMI 546 - AT - Income Tax

Tribunal affirms STPI registration for Section 10B deduction, rejecting Revenue's appeal

The Tribunal dismissed the Revenue's appeal, affirming the assessee's eligibility for deduction under Section 10B based on registration with the Software ... Allowability of deduction u/s 10B of the Act – Statutory provisions not complied - Failure to produce the Ratification by the Development Commissioner in the Instruction No.2/2009 of the CBDT dated 09.03.2009 – whether it is enough if the assessee is registered with Software Technology Park of India as a 100% EOU or it is also necessary for the assessee to have the approval of the Board constituted by the Central Government under S.14 of the Industries (Development and Regulation) Act, 1951 - Held that:- The CIT(A) was rightly of the view that the assessee as eligible for deduction u/s 10B of the Act – the decision in VSN Makro Technology P. Ltd. V/s. ACIT [2011 (1) TMI 1275 - ITAT HYDERABAD] followed - the assessee have been registered with the STPI, is entitled for deduction u/s 10B of the Act – thus, there was no infirmity in the order of the CIT(A) – Decided against Revenue. Issues:- Eligibility for deduction under Section 10B of the Income-tax Act, 1961 based on registration with Software Technology Park of India as a 100% EOU versus approval by the Board under the Industries (Development and Regulation) Act, 1951.Analysis:1. Issue of Eligibility for Deduction under Section 10B:- The appeal concerned the eligibility of the assessee for deduction under Section 10B of the Income-tax Act, 1961. The assessing officer denied the deduction as the assessee could not provide necessary documentary evidence and the 'Ratification' by the Development Commissioner as required by the CBDT Instruction dated 9.3.2009.2. Assessing Officer's Observations:- The assessing officer emphasized that for claiming deduction under Section 10B, an undertaking must be approved as a 100% export-oriented undertaking by the Board appointed under the Industries (Development and Regulation) Act, 1951. He differentiated between being a 100% EOU under the STPI Scheme and having approval by the Board, citing relevant case law.3. CIT(A)'s Decision:- The CIT(A) ruled in favor of the assessee, stating that registration with the Software Technology Park as a 100% EOU made the assessee eligible for the deduction under Section 10B. This decision was based on precedents from co-ordinate Benches of the Tribunal, which held similar views in comparable cases.4. Tribunal's Decision:- The Tribunal upheld the CIT(A)'s decision, emphasizing that being registered with the STPI was sufficient to qualify for the deduction under Section 10B. They cited previous Tribunal decisions, including cases from various benches, to support their conclusion.5. Conclusion:- Ultimately, the Tribunal dismissed the appeal by the Revenue, confirming the eligibility of the assessee for the deduction under Section 10B based on their registration with the STPI. The decision was based on consistent interpretations by different Tribunal benches in similar cases, leading to the rejection of the Revenue's grounds.This comprehensive analysis highlights the key legal aspects, arguments, and decisions involved in the judgment regarding the eligibility of the assessee for deduction under Section 10B of the Income-tax Act, 1961.