Section 10B deduction for export-oriented units upheld where Development Commissioner approval sufficed without separate Board ratification.

Deduction under section 10B was available for a 100% export oriented unit approved by the Development Commissioner and STPI, even without separate ratification by the Board of Approval. The statutory reference in Explanation 2(iv) was read with the scheme governing STP/EOU units, under which approval powers had been delegated to Development Commissioners. The record showed such approval and issuance of a green card by STPI, and a later clarification also supported that position. On those facts, the absence of separate Board ratification did not defeat the deduction claim, and the Revenue's challenge failed.

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Issues: Whether the assessee was entitled to deduction under section 10B of the Income-tax Act, 1961 in respect of its 100% export oriented unit approved by the Development Commissioner and STPI, without separate ratification by the Board of Approval.

Analysis: The unit was treated as a 100% export oriented undertaking under the STP/EOU framework and the record showed approval through the Development Commissioner with a green card issued by STPI. Explanation 2(iv) to section 10B refers to approval by the Board constituted for that purpose, but the statutory scheme and the material placed on record showed that the Board had delegated approval powers to Development Commissioners for such units. The later clarification relied upon by the assessee supported that position. On these facts, the absence of separate Board ratification did not defeat the claim for deduction under section 10B.

Conclusion: The assessee was entitled to deduction under section 10B and the Revenue's challenge failed.

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