2008 (9) TMI 26 - HC - Income Tax

Stock Transfers to Rotterdam Unit Qualify as Exports; Sections 10A/10B Exemptions Allowed

COMMISSIONER OF INCOME TAX, DELHI-II Versus MOSER BAER INDIA LTD.

COMMISSIONER OF INCOME TAX, DELHI-II Versus MOSER BAER INDIA LTD. - tmi Issues:Interpretation of Section 10A/10B of the Income Tax Act, 1961 for exemption eligibility based on export sales percentage.Analysis:The case involved an appeal against the Income Tax Appellate Tribunal's order regarding the assessment year 2000-01. The Assessee, engaged in manufacturing computer products, claimed exemption under Section 10A/10B of the Income Tax Act for profits earned. The Assessing Officer disputed the claim due to the percentage of direct export sales falling below 75% of total sales, including stock transfers and domestic sales. The Tribunal considered the nature of stock transfers to a foreign unit and previous decisions, ruling in favor of the Assessee's eligibility for exemptions.The Commissioner of Income-tax (Appeals) supported the Assessee's plea and directed a re-computation of exemptions. The Tribunal analyzed the stock transfer to the foreign unit and concluded that sales exceeding 75% of total sales were eligible for exemptions under Section 10A/10B. The Tribunal's decision was based on factual findings that supported the Assessee's claim, as per the provisions applicable for the assessment year 2000-01.The Tribunal's ruling was upheld as it was deemed a factual finding without any legal questions for consideration. The judgment dismissed the appeal, affirming the Assessee's entitlement to exemptions under Section 10A/10B based on the percentage of export sales meeting the statutory requirement.