TaxTMI 
TaxTMI 
2019 (11) TMI 328
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....on therefrom the deduction claimed under section 35(2AB) of the Act. 2. Briefly the facts are, the assessee is a resident company engaged in manufacture and sale of Active Pharmaceutical Ingredients (API) and bulk drugs. For the assessment year under dispute assessee filed its return of income on 15.10.2010 declaring total income of Rs. .72,4,080/- after claiming deduction under section 10B of the Act. Subsequently, assessee filed a revised return of income on 30.3.2012 declaring total income of Rs. 8,99,11,494/- under the normal provisions of the Act and book profit of Rs. 34,91,51,096/- under section 115JB of the Act. During the assessment proceedings the Assessing Officer noticing that the assessee had claimed deduction of Rs. 5,33,72,....
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....bed time limit provided in section 10B of the Act. Without prejudice, the Assessing Officer observed, while computing deduction under section 10B of the Act, the additional deduction claimed under section 35(2AB) of the Act has to be reduced. On the basis of aforesaid reasoning the Assessing Officer ultimately disallowed assesse's claim of deduction under section 10B of the Act. 3. Being aggrieved, assessee preferred an appeal before learned Commissioner (Appeals). In course of appeal proceedings, the assessee apart from making elaborate submissions in support of deduction claimed under section 10B of the Act also furnished some more evidences. The submissions made and evidences produced by the assessee were forwarded to the Assessing Off....
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....cord clearly reveal that the Mangalore unit in respect of which the assessee has claimed deduction under section 10B of the Act was set up after amalgamation of an existing business with the assessee. Thus he submitted, since the Mangalore unit was set up/came into existence on splitting up of existing business, one of the condition of section 10B is not fulfilled. Hence, the assessee is ineligible to avail deduction under section 10B of the Act. The learned Authorised Representative submitted, the Assessing Officer is both factually and legally incorrect while disallowing assessee's claim of deduction under section 10B of the Act. He submitted, the Mangalore unit got approval from Development Commissioner on 27.2.2007 and commenced commerc....
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....n this regard he strongly relied upon the decision of Hon'ble Supreme Court in case of CIT vs. M/s Yokogawa India Limited,[2017] 391 ITR 274 (SC). 5. We have considered rival submissions and perused the material on record. We have also examined the case law cited before us. From the material on record the following factual position emerges. The Mangalore unit in respect of which the assessee has claimed deduction under section 10B was initially set up by erstwhile Sequent Scientific Limited in February, 2007. The aforesaid unit was approved as a 100% EOU by the Development Commissioner, Cochin Special Economic Zone (CSEZ) vide letter 27th February, 2007. Subsequently, the approval granted by the Development Commissioner, CSEZ, was ratified....
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....ular, it becomes clear that in case of transfer of an undertaking before the expiry of period of deduction specified under section 10B to another Indian company in a scheme of amalgamation of demerger, no deduction would be allowed to the amalgamating/demerged company for the previous year in which amalgamation/demerger takes place. However, the benefit of deduction would be available to the amalgamated company as would have applied to the amalgamating or the demerged company had amalgamation or demerger not taken place. In the facts of the present case, admittedly, the Mangalore unit of erstwhile company was transferred to the assessee under a scheme of amalgamation. Thus, the provision of sub section (7A) of section 10B of the Act would b....
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....ntrovert the aforesaid factual finding In view of the above said we do not find any reason to interfere with the decision of learned Commissioner (Appeals) on this issue. The ground raised being devoid of merit is dismissed. 6. In ground no. 2 Revenue has challenged the decision of learned Commissioner (Appeals) in directing the Assessing Officer to allow deduction of Rs. 12,55,44,413/- representing the addition made to closing inventory. 7. We have heard the parties and perused the material on record. As could be seen from facts on record, in course of assessment proceeding for A.Y. 2009-10 the Assessing Officer noticed that inventories to the extent of Rs. 14,40,81,661/- were written off in the revised return of income. After consideri....