Section 10B deduction allowed for STP unit where delegated approval was valid despite no separate Board ratification.

Deduction under section 10B could not be denied to a Software Technology Park unit merely because its approval was not separately ratified by the Board of Approval. The Tribunal treated approval granted by the delegated STPI authority as sufficient where the assessee was registered as a 100% export oriented unit under the STP scheme and the delegated approval mechanism was otherwise satisfied. Relying on its earlier decision and CBDT clarification, it held that the statutory approval requirement was met on these facts and directed deletion of the disallowance.

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Issues: Whether deduction under section 10B of the Income-tax Act, 1961 could be denied to a unit approved under the Software Technology Park scheme on the ground that the approval was not ratified by the Board of Approval.

Analysis: The assessee was registered as a 100% export oriented unit under the STP scheme and possessed approval through the designated STPI authority. The Tribunal relied on its earlier decision and the CBDT clarification that approvals granted by the delegated authority for STP units are valid for the purpose of section 10B, and that the scheme approval was to be understood in light of the delegated powers and the subsequent ratification mechanism. On that basis, the requirement of approval for a 100% EOU was treated as satisfied in the assessee's case.

Conclusion: Deduction under section 10B was held to be allowable to the assessee, and the disallowance was directed to be deleted.

Ratio Decidendi: Where an STP unit has been validly approved by the delegated competent authority under the export-oriented unit scheme, deduction under section 10B cannot be denied merely for want of a separate Board of Approval ratification if the approval mechanism under the delegated regime is otherwise satisfied.

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