TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 932
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....grieved the Revenue is in appeal before us on the following grounds. "1. Whether on the facts and in the circumstances of the case, the Ld.Commissioner of Income Tax (Appeals) has erred in allowing the deduction of Rs.48,20,160/- u/s 10A of the Act by holding that the CBDT's Circular no. 1/2005 dt. 6.01.2005 with reference to S.10B is equally applicable to S.10A. 2. Whether on the facts and in the circumstances of the case, the Ld.Commissioner of Income Tax (Appeals) has erred in holding that there was no reconstruction of business." 3. The Ld.D.R. Mr. Keyur Patel referred to last page of the assessment order and submitted that (a) the Board's Circular in question was with reference to S.10B and that it does not apply to those cases where there is reconstruction of already existing business. (b)That the lease deed demonstrates that the assessee was carrying on its business in the domestic tariff area, prior to the shifting to STPI area. (c) the assessee had already existing business since 22.5.2007 had acquired all fixed assets prior to the shifting to the STPI area which is evident from the profit and los....
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....h B); xv. CIT vs. Expert Outsourcing P.Ltd. (2013) 358 ITR 518 (Kar.); xvi. Nagesh Chundur vs. CIT (2013) 358 ITR 521 (Mad.) 5. Rival contentions heard. On a careful consideration of the facts and circumstances of the case, order of the lower authorities, material filed and case laws cited, we hold as under. 6. The assessee was originally carrying on business in the domestic tariff area. Later it had shifted to STPI area and was granted registration for the period of 5 years from 20th July,2008. The assessee claimed proportionate deduction u/s 10A of the Act for the very first time. The AO, on the ground that the assessee has acquired all the fixed assets, prior to shifting of the company to STPI area, was of the opinion that there was reconstruction of business and thus deduction u/s 10A was not allowable and that the Circular no.1/05 dt. 6.1.2005 is also not applicable. Section 10A of the Act reads as under: "[Special provision in respect of newly established undertakings in free trade zone, etc. 10A. (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived....
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....Income-tax Act provides for 100% deduction of profits derived by a hundred per cent Export Oriented Undertaking, from export of articles or things or computer software manufactured or produced by it. The deduction is available for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software. However, no deduction under section 10B is available after assessment year 2009-10. 2. The deduction under section 10B is available to an undertaking which fulfils all the following conditions:- (i) it manufactures or produces any article or thing or computer software; (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence except in the circumstances specified under section 33B of the IT Act. (iii) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose. 3. Representations have been received from various quarters as to whether an undertaking set up in Domesti....
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....gins to manufacture or produce computer software in financial year 1996-97 relevant to assessment year 1997~98. It gets approval as 100% EOU in financial year 2007-08 relevant to assessment year 2008-09. No deduction under section 10B shall be admissible to undertaking B as the period of 10 years expires in financial year. 2005-06 relevant to assessment year 2006-07, prior to its approval as 100% EOU. (iii) Undertaking 'C' is set up in Domestic Tariff Area in the financial year 2000-01 relevant to assessment year 2001-02 and engaged in the business of providing computer related services, other than those notified by the Board for the purposes of section 10B. In financial year 2002-03, it acquires more than 20% of old plant and machinery and starts manufacturing computer software. It also gets approval as 100% EOU in financial year 2002-03. Undertaking 'C' shall not be eligible for deduction under section 10B, as there has been transfer of old plant and machinery. (iv) Undertaking 'D' is set up and starts producing computer software in financial year 2003-04 relevant to as....