Section 10B deduction period starts from original production, while an alternative Section 80IC claim required fresh consideration.

Section 10B deduction runs for ten consecutive assessment years from the original commencement of manufacture or production, and later approval as a hundred per cent export oriented undertaking does not restart that period. The assessee's claim was rejected because the original ten-year window had already expired. Since the Section 80IC claim had been produced but not examined, and simultaneous deductions under Section 10B and Section 80IC are barred, the alternative claim was directed to be considered independently by the Assessing Officer. The assessee therefore remained ineligible for Section 10B relief, while the Section 80IC claim was remitted for fresh consideration.

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Issues: (i) Whether an undertaking that had been in existence for decades and was later approved as a hundred per cent export oriented undertaking could claim deduction under Section 10B of the Income-tax Act, 1961 for ten years from the date of such approval; (ii) whether the matter required remand for consideration of the assessee's claim under Section 80IC of the Income-tax Act, 1961.

Issue (i): Whether an undertaking that had been in existence for decades and was later approved as a hundred per cent export oriented undertaking could claim deduction under Section 10B of the Income-tax Act, 1961 for ten years from the date of such approval.

Analysis: Section 10B allows deduction for ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce. The Court held that the relevant starting point remains the original commencement of production, not the later date on which the unit is approved as a hundred per cent export oriented undertaking. A later approval does not reset the ten-year period. The circular relied upon was treated as consistent with this interpretation to the extent it denied deduction where the original ten-year period had already expired.

Conclusion: The claim under Section 10B was rejected and the assessee was held not entitled to deduction.

Issue (ii): Whether the matter required remand for consideration of the assessee's claim under Section 80IC of the Income-tax Act, 1961.

Analysis: The assessment record indicated that documents supporting the Section 80IC claim had been produced, but the claim had not been examined because the assessee had pursued Section 10B. Since simultaneous deduction under Section 80IC and Section 10B is barred, and the Section 10B claim failed, the Court directed that the assessee's Section 80IC claim be considered independently by the Assessing Officer.

Conclusion: The matter was remitted to the Assessing Officer for consideration of the Section 80IC claim.

Final Conclusion: The assessee was denied relief under Section 10B, but the assessment was sent back for fresh consideration of the alternative claim under Section 80IC.

Ratio Decidendi: For Section 10B, the ten-year deduction period runs from the original commencement of manufacture or production, and a later approval as a hundred per cent export oriented undertaking does not restart that period.

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