2020 (9) TMI 671

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....filed its return of income on 29.11.2014 disclosing Nil income as per normal provision of the Act and t book profit u/s 115JB of the Act was disclosed of Rs. 47686863/-. The case of the assessee was selected for scrutiny. The assessee has entered into certain international transactions, but same were not in dispute as no adjustment is proposed. 4. However assessee has claimed deduction u/s 10AA of the Act of Rs. 47414726/-, The ld AO raised two issues for denying above deduction. Firstly, assessee was required to file Form No. 56F along with return of income, however, it has not filed it along with return of income. The ld AO questioned the assessee. The assessee submitted a copy of form No. 56F on 23.12.2016. The ld AO further noted that on 27.12.2016 assessee filed form No. 56F electronically the provisions of section 10A(5) read with Rule 12 and CBDT notification No. 24/2014 dated 01.04.2014. ON objection before ld DRP this objection of the assessee was accepted and ld AO was direct to drop this objection. 5. Secondly ld AO was of the view that the assessee is not entitled to the deduction u/s 10A of the Act, as it did not specify what services it is rendering to qualif....

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....aking of the assessee is engaged in the business of trading in nickel and steel and therefore, it is outside the definition of 'entrepreneur' under SEZ Act. Section 10AA of the Act was introduced by The Special Economic Zones Act, 2005 in the Income Tax Act, 1961 w.e.f 10.02.2006. According to provisions of section 10AA of the Act, deduction is granted to an 'entrepreneur' as defined in clause (j) of section 2 of the SEZ Act, 2005 who begins to manufacture or produce articles or provide services. The definition of 'entrepreneur' under clause (j) of section 2 of SEZ act means a persons who has been granted the letter of approval by the development Commissioner u/s 15(9) of the Act. The assessee has produced before us the letter of approval dated 23.07.2012 issued to the assessee. As per page No. 2 of the approval the assessee was granted authorized operation for trading activities of nickel, copper, zinc and other products. It is not in dispute that appellant company is engaged in import of nickel and steel and thereafter re-exporting such goods. The rules 76 of SEZ Rules provides that services for clause (z) of section 2 of the SEZ includes 'trading' also which shall mean 'import f....

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....vailable on record and gone through the orders of the authorities below. The only question arises for our consideration is whether on the facts and in the circumstances of the case, the benefit of exemption u/s. 10AA of the Act is available to the assessee, which is engaged in the business of trading activity in the nature of import and re-export of goods which falls within the meaning of the term 'services' as defined u/s. 10AA of the Act. Admittedly, the assessee has established a unit at Cochin SEZ, which was approved by the Development Commissioner vide his letter no. 9/05/2005/IL/CSEZ/1563 dated 14.3.2005. The assessee is engaged in the business of trading activity in the nature of importing Cigars, Cigarettes & Alcoholic beverages and re-exporting the same. The assessee claims that units located in SEZ, engaged in the business of import and export falls within the definition of the term 'services' as defined in clause 'Z' of section 2 of SEZ Act, 2005 and rule 76 of SEZ Rules, 2006, which defines the term 'services', which includes 'trading'. As per explanation given in SEZ Rules, 2006, the expression 'trading' for the ....

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.... by him is the only view possible in the matter and, in law assessee cannot, by any stretch of imagination, be entitled to claim deduction u/s. 10AA of the Act. Since the Ld. CIT (A) has given cogent reasons in arriving at a conclusion that the assessee is entitled to exemption u/s. 10AA of the Act on an interpretation of the provisions of the Income-tax Act as well as the SEZ Act and Rules, apart from the instructions issued by the Ministry of Commerce, we do not find any infirmity in the order passed by the Ld. CIT (A) and thus, the appeal filed by the revenue is hereby dismissed. 11. The assessee relied upon the decision of ITAT, Jaipur 'B' Bench in the case of Goenka Diamond & Jewellers Ltd. (supra), wherein the coordinate bench of this Tribunal, under similar circumstances has held as under: "We have also reproduced Section 51 of the SEZ Act. As per this Section, it is mentioned that notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act, the provision of SEZ Act will prevail. The Hon'ble Apex Court in the case of Tax Recovery Offi....