TaxTMI 
TaxTMI 
2016 (7) TMI 8
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.... 10B of the Income Tax Act, 1961. 4. The Revenue in ITA No.1149/PN/2011 has raised the following grounds of appeal:- 1) On the facts and circumstances of the case whether CIT(A) is correct in allowing the deduction u/s 10B of the Income Tax Act 1961 even though the assessee is not eligible for deduction under section 10B? 2) Whether in the facts and circumstances of the case, the CIT(A) is correct in allowing deduction under section 10A of the Act. Even though the assessee has not claimed the same in his return of income? 3) Whether in the facts and circumstances of the case, the CIT(A) is right in allowing deduction under section 10A of the Act in spite of that section 80A(5) categorically state that the assessee can claim deduction under section 10A or 10AA or section 10B and section 10BA through the return of income only. 4) On the facts and in the circumstances of the case, the order of the AO be restored and that of the CIT(A) be vacated. 5. The assessee is in appeal against the order of CIT(A) in not allowing deduction under section 10B of the Act at Rs. 30,70,367/-. 6. The Revenue is in appeal against the order of CIT(A) in allowing deduction under section 10A of....
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....tion 10A of the Act, the assessee was held to be not eligible for the deduction under section 10B of the Act. In this regard, show cause notice was issued to the assessee vis-à-vis wrong claim of deduction under section 10B of the Act. The reply of the assessee in this regard is reproduced by the Assessing Officer at pages 8 and 9 of the assessment order. Thereafter, the Assessing Officer held that the claim of assessee that he was eligible for claiming deduction under section 10B of the Act was not correct and the second claim made by the assessee that in assessment years 2003-04 and 2004-05 during the scrutiny assessment, the claim of deduction was allowed by the Assessing Officer and during the current year, there was only change of opinion for not allowing claim of deduction under section 10B of the Act, it was proposed that the assessee was entitled to the said claim. The learned Authorized Representative for the assessee in this regard placed reliances on various judicial pronouncements which are reproduced by the Assessing Officer in its assessment order. However, the Assessing Officer rejected the claim of assessee that it was entitled to the claim of deduction under....
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....fore us is whether the profits arising on export of computer software by the assessee unit which is registered under Software Technology Park Scheme is entitled to the benefit of deduction under section 10B of the Act or 10A of the Act. The case of the Assessing Officer was that since it is registered as STPI unit and not registered by the Board authorized by the Government of India, hence, is not entitled to the claim of deduction under section 10B of the Act. The alternate claim of deduction under section 10A of the Act was not allowed to the assessee, in view of no such claim being made in the return of income. The CIT(A) upheld the order of Assessing Officer in denying the claim of deduction under section 10B of the Act. However, the claim of deduction under section 10A of the Act was allowed to the assessee. The assessee is in appeal before us vis-à-vis its claim of deduction under section 10B of the Act and the Revenue is in appeal for allowing claim of deduction under section 10A of the Act by the CIT(A). The first aspect which arises for adjudication is whether the assessee is entitled to the claim of deduction under section 10B of the Act. 14. We find that similar ....
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....contained in Explanation 2(iv) below section 10B of the Act. There is no denying the fact that identical controversy has been considered by the Hon'ble Delhi High Court in the case of Regency Creations Ltd. (supra) and it is on the basis of the said judgement, the lower authorities have denied the claim of the assessee for deduction u/s 10B of the Act. Admittedly, the 100% EOU of the assessee does not enjoy any specific approval from the authority referred to in Explanation 2(iv) below section 10B of the Act. In-fact, the plea of the assessee that the approval by Director, STPI be taken as equivalent to obtaining of approval from the entity prescribed in Explanation 2(iv) below section 10B of the Act has been specifically negated by the Hon'ble Delhi High Court in the case of Regency Creations Ltd. (supra). The other aspect raised by the learned Representative for the assessee to the effect that a conjoint reading of the Exim Policy/Foreign Trade Policy entitles the assessee to the benefits of section 10B of the Act, once the unit is approved as per the Exim Policy. No doubt, such a plea is not found to have been urged before the Hon'ble Delhi High Court, so however, having regard ....
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....of his discussion in para 3.10.1 of the impugned order, the CIT(A) held that assessee has not demonstrated that all the requirements for availing the deduction u/s 10A of the Act, including furnishing of the specified Audit Report in Form No.56F have been complied with by the assessee. Against such a decision of the CIT(A), assessee is in further appeal before us. 13. Before us, the learned Representative for the assessee has vehemently argued that the CIT(A) has unjustly denied the claim of deduction u/s 10A of the Act. The learned counsel pointed out that the claim of deduction u/s 10B of the Act was made in the return of income as it was allowed in the past years and assessee could not have envisaged its disallowance in the subsequent assessment proceedings; and, therefore the alternate claim of deduction u/s 10A of the Act was raised before the CIT(A) after the Assessing Officer disallowed it during assessment proceedings. In this context, it is pointed out that assessee fulfills all the conditions laid down in section 10A of the Act and hence it is eligible for the claim of deduction u/s 10A of the Act. The learned counsel also relied upon the judgement of the Hon'ble Delhi ....
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....essee was required to take approval from the Board appointed for this purpose by the Central Government, following the judgement of the Hon'ble Delhi High Court in the case of Regency Creations Ltd. (supra). In the aforesaid situation, at the time of filing of return of income for the instant assessment year, assessee could not have envisaged the denial of its claim of deduction u/s 10B of the Act, which was being allowed in the past. The aforesaid circumstance clearly establishes the bonafides of the reasons prevailing with the assessee for not having made a claim for deduction u/s 10A of the Act in the return of income. Having regard to the peculiar facts and circumstances of the instant case, in our view, the stand of the Revenue that assessee cannot be allowed the benefits of section 10A of the Act merely because the prescribed Audit Report in Form No.56F was not filed in the return of income, is quite erroneous. Pertinently, after denial of deduction u/s 10B of the Act in the assessment order, the earliest opportunity for the assessee to stake claim for deduction u/s 10A of the Act was before the CIT(A); and, the assessee made the claim before the CIT(A) along with the prescri....