TaxTMI 
TaxTMI 
2023 (4) TMI 636
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....l is admitted. 2. Counsel for the parties agree that the following question of law would arise for consideration: (i) Whether the Income Tax Appellate Tribunal [in short, "Tribunal"] committed an error in law and on facts in importing the definition of "services" provided under the Special Economic Zones Act, 2005 [in short, "2005 Act"] and Rule 76 of the Special Economic Zones Rules, 2006 [in short, "2006 Rules) framed thereunder, while examining the issue concerning the claim of the respondent/assessee for deduction under Section 10AA of the Income Tax Act, 1961 [in short, "1961 Act"]? 3. Since this is a pure question of law and there is no cavil regarding the facts obtaining in the matter, counsel for the parties have subm....
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....that the deduction could be claimed only against articles manufactured in, or against the services which emanated from, the NSEZ. 5. Being aggrieved, the respondent/assessee carried the matter in an appeal to the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"]. 5.1 The CIT(A), via order dated 23.07.2014, ruled in favour of the respondent/assessee and thus, deleted the disallowance made by the AO. 6. Against the order of the CIT(A), the appellant/revenue preferred an appeal with the Tribunal. 6.1 The Tribunal, via the impugned order, sustained the decision of the CIT(A). SUBMISSIONS OF COUNSEL 7. Mr Sanjay Kumar, learned senior standing counsel, has advanced the submissions in support of the stand taken by the app....
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....NALYSIS AND REASONS 10. We have heard learned counsel for the parties and perused the record. 11. The facts which have been set forth hereinabove are not in dispute. The only issue, therefore, which arises for consideration is: whether or not the Tribunal could have taken recourse to the definition of expression "services" given in the 2005 Act and the 2006 Rules framed thereunder? 11.1 The undisputed position is that the definition of the expression "services" is not provided in the 1961 Act. 11.2 That being said, a plain reading of the language of Section 10AA of the 1961 Act would show that an assessee can claim deduction equivalent to 100% of profits and gains derived from export of services. The next logical question which,....
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....xt, it would be apposite to set forth Section 27 of the 2005 Act: "27. Provisions of Income-tax Act, 1961 to apply with certain modification in relation to Developers and entrepreneurs.-The provisions of the Income-tax Act, 1961 (43 of 1961), as in force for the time being, shall apply to, or in relation to, the Developer or entrepreneur for carrying on the 18 authorised operations in a Special Economic Zone or Unit subject to the modifications specified in the Second Schedule..." 13. A plain reading of Section 27 of the 2005 Act would show that, clearly, the provisions of 1961 Act are made applicable to a developer or entrepreneur who carries out authorized operations in the SEZ, subject to modifications specified in the Second....
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.... "76. The "services" for the purposes of [clause] (z) of section 2 shall be the following, namely:- Trading, warehousing, research and development services, computer software services, including information enabled services such as back-office operations, call centers, content development or animation, data processing, engineering and design, graphic information system services, human resources services, insurance claim processing, legal data bases, medical transcription, payroll, remote maintenance, revenue accounting, support centers and web-site services, off-shore banking services, professional services (excluding legal services and accounting) rental/leasing services without operators, other business services, courier service....
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....e tax benefits will be availed by the unit for trading, except in the nature of re-export of imported goods..." [Emphasis is ours] 16. The aforementioned Instruction has been adopted by the Export Promotion Council [in short, "EPC"] via its Circular No.17 dated 29.05.2006. 16.1 Likewise, after Rule 76 was inserted in the 2006 Rules, the EPC for EOUs and SEZ units issued another Circular dated 16.11.2006. The part which is relevant for our purpose is extracated hereafter: "4. Ministry of Commerce & Industry issued Notification dated 10/8/06 wherein Rule 76 of the SEZ Rules, 2006, was amended and an explanation was inserted as follows:- "Explanation.- The expression "Trading", for the purposes of the Second Sc....