Sec 10B Exemption

[Guest]

Hi,

Sec 10B exempts the profits of 100% EOU for 10 consecutive years. Now an existing firm puts up a new unit for its export operation and registered the same under EOU with MEPZ. 

Is it necessary to maintain books of accounts seperately for these 2 units under the same firm.

[MOHAN S]

Hi Chithra,

Kindly go through the Rules prescribed u/s 10B. Yes it is certainly necessary to maintain sepearte books for the two export so that the Assessing Officer can ascertain the profit claimed to be exempt u/s 10B is properly arrived at. 

A word of caution: Please advise your client to keep all records in respect of "Exempted Units" properly as ther are lot of litigation and the department (Very unfortunately) treats such units with an eye of suspicion always.

Mohan

AI Summary

Section 10B exemption requires separate accounting for distinct export units to substantiate exempt profits claimed. It is necessary to maintain separate books of account for each export unit of the same firm so the Assessing Officer can ascertain and verify the profits claimed to be exempt under Section 10B; firm-level accounts alone are insufficient, and unit-specific records should be preserved to meet heightened departmental scrutiny.