Section 10A deduction requires AO verification when supporting documents are first filed before the appellate authority.

Deduction under section 10A could not be accepted on the basis of documents produced for the first time before the first appellate authority without giving the Assessing Officer an opportunity to verify them. Where the supporting materials were not before the Assessing Officer, a remand report was required before the claim was allowed on merits. The appellate allowance was therefore set aside and the matter was remitted to the Assessing Officer for fresh consideration in accordance with law.

---

---

Issues: Whether the assessee's claim for deduction under section 10A could be allowed by the first appellate authority on the basis of documents produced for the first time without calling for a remand report from the Assessing Officer, and whether the matter required fresh examination by the Assessing Officer.

Analysis: The assessee's original claim was for deduction under section 10B, which was denied for want of the required approval. The first appellate authority accepted the alternate claim under section 10A on the basis of materials stated to have been filed and held that the statutory conditions were satisfied. The Tribunal noted that the supporting documents for section 10A were not before the Assessing Officer and had been produced for the first time before the first appellate authority. In such a situation, the Assessing Officer ought to have been afforded an opportunity to verify the materials through a remand report before the claim was accepted on merits.

Conclusion: The allowance of deduction under section 10A by the first appellate authority was set aside and the issue was remitted to the Assessing Officer for fresh consideration in accordance with law.

---