STPI approval for section 10B deduction upheld, with revision under section 263 set aside for lack of error

STPI approval and the execution of the required agreement were treated as sufficient to satisfy the statutory requirement for a 100% export oriented undertaking under section 10B. The Tribunal followed coordinate Bench rulings holding that deduction could not be denied merely because approval was not granted by the Board constituted under section 14 of the Industries (Development and Regulation) Act, 1951. On that basis, the assessment order allowing the section 10B deduction was not considered erroneous for revisional purposes, and the revision under section 263 was set aside.

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Issues: Whether the assessee was entitled to deduction under section 10B on the basis of STPI approval for a 100% export oriented undertaking, and whether the revision under section 263 withdrawing that deduction was justified.

Analysis: The assessee had obtained approval from the Software Technology Parks authority and entered into the required agreement, and the issue turned on whether such approval satisfied the statutory requirement for a 100% export oriented undertaking. The Tribunal followed prior coordinate Bench decisions holding that STPI approval was sufficient for the purpose of section 10B, and that deduction could not be denied merely because the approval was not from the Board constituted under section 14 of the Industries (Development and Regulation) Act, 1951. On that basis, the assessment order allowing deduction under section 10B was not erroneous in the manner assumed by the revisional authority.

Conclusion: The revisionary order was set aside and the assessee's entitlement to deduction under section 10B was upheld.

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