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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 the assessee was entitled to deduction under section 10B of the Income-tax Act, 1961 on the strength of approval granted by STPI as a 100% export-oriented undertaking, even though no separate approval by the Board appointed under section 14 of the Industries (Development and Regulation) Act, 1951 was produced.
Analysis: The claim turned on the interpretation of section 10B and the meaning of approval by the Board for a hundred per cent export-oriented undertaking. The Tribunal preferred the view earlier taken by the jurisdictional High Court and its own coordinate Benches that STPI approval, granted under delegated authority, satisfies the statutory requirement for the purpose of deduction, particularly where the beneficial provision is to be construed liberally. It also applied the principle that where two views are possible, the one favourable to the assessee should be adopted, and noted the consistency of the Department's stand in similar cases.
Conclusion: The assessee was held entitled to deduction under section 10B, subject to fulfillment of other conditions.
Final Conclusion: The rejection of the deduction claim was set aside and the assessee succeeded in the appeal.
Ratio Decidendi: For section 10B purposes, approval granted by STPI under delegated governmental authority can be treated as valid approval of the Board for a 100% export-oriented undertaking, and the provision must be construed liberally in favour of granting the incentive.
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