Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com HRindiaonline.com
 
LOGIN
Forgot Password |  Register
Thursday , August 21, 2014 | Updated : Aug 21, 18:27 IST
Income Tax    Customs    Excise    Service Tax    FEMA    DGFT    SEZ    Misc    Pitara    Budget   
About Us Contact Us Advertise
Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com
NEWS FLASH
 
Services related to religious pilgrimage facilitated by 'specified organisations' exempted from service tax (See 'ST Not' in What's New) CBEC notifies new Customs Exchange rates effective from August 22, 2014 (See CNT 72 in 'What's New') CBDT goes for massive transfer of Addl/JDs in Directorates of TP & Intl Taxation (See 'Administrative Orders' in Taxindiainternational.com) Union Cabinet approves pension arrears of Rs 700 Cr FIEO projects USD 750 bn exports by 2018-19 FM says MoF taking steps to professionalise management of PSBs CX - Claiming of remission of duty on ground of dacoity when, in fact, police report stated that no dacoity actually took place - Demand of duty correctly confirmed: CESTAT (See 'Breaking News') Money ... Black is Beautiful! (See 'The Cob(Web)' Column) ST - Perception of appellate Commissioner that every departmental officer is sui generis advance ruling authority is misconception that has no legislative basis: CESTAT (See 'Breaking News') Central GST first - States to follow later? (See 'DDT' Column) ST - Appellant splitting contract into two, one with Chinese party for supply of equipment and another one in India for commissioning - services provided is Works Contract - Department cannot force appellant to go for Composition Scheme - Matter remanded: CESTAT (See 'Breaking News') Redemption fine is an allowable expenditure (See 'DDT') Income tax - Whether disallowance u/s 40(a)(ia) is warranted merely because assessee provides wrong PAN No of transport operator who was paid transport charges without deduction of tax at source - YES: ITAT (See 'Breaking News') Customs duty - ad-hoc exemption - instructions (See 'DDT') CX - Subsidy received by Fertilizer Company from Government cannot be considered as additional consideration; not includible in assessable value: CESTAT (See 'Breaking News') DDA decides to do 'incredible' job in Delhi (See 'Mixed Buzz') CBDT extends due date for furnishing of audit report for assessees not required to submit report u/s 92E (See 'Instruction' in Income Tax) Forward Contracts Regulation - Draft Rules - MoF seeks public comments (See 'Mixed Buzz') Govt sets up Panel to review working of FCI and suggest new structure CX - Delay of 406 days in filing appeal before CESTAT not condoned -Dues of more than Rs.8 crores - petitioner selling the company and machineries in auction and same bought by close relatives - conduct of petitioner lacks bonafide - Petition dismissed: High Court (See 'Breaking News')' Lucknow DRI seizes 107 kg Nepali hashish being carted by Maruti car; Two persons arrested Govt notifies hike in PPF threshold from Rs 1 lakh to Rs 1.5 lakh (See Saving Scheme in 'TIOL Library') CBEC lays down Guidelines for seeking Customs exemption u/s 25(2) (See Cir 9 in 'What's New') MoF releases Draft Rules on Forward Contracts Regulations (See 'What's New') CBDT all set to promote IRS officers of 1981-86 batches as Principal CIT and 1992-94 batches as CIT NY Banking Regulator imposes fine of USD 300 mn on Stan Chart bank for poor anti-money laundering norms Mr. Prime Servant – Here is a sample of your Ir-Reverent Servant (See 'DDT' Column) AV of imported goods - inclusion of packing & labelling costs (See 'Guest' Column) CX - Ceramic Tiles cleared to builders, hotels & schools under contract are to be valued in terms of s.4 & not s.4A - Demand upheld & appeal rejected: CESTAT (See 'Breaking News') About a Hundred crores spent/wasted on CBDT Officers foreign Jaunts (See 'DDT') Ebola scare: Delhi Airport yet to come across first suspect (See 'Mixed Buzz') Amma Wants Central GST also to be handed over to States + States meeting today on GST issue (See 'DDT')
 
Bookmark and Share
Income tax - Sections 10A, 10B benefits cannot be denied when same have been allowed in previous AYs - Approval of SPTI Director sufficient to claim benefits: ITAT

By TIOL News Service

NEW DELHI, AUG 20, 2010: THE issue before the Tribunal is - Whether Revenue can deny Sec 10B benefits particularly when benefits have been allowed in the previous AYs and Whether Section 10B requires that for the purpose of establishing a STP unit, approval is required to be sought from the Board appointed by the central government u/s 14 of the Industries (Development & Regulation) Act, 1951. And the verdict has gone against the Revenue.

Facts of the case

The AO noted in the assessment order that the assessee has claimed deduction u/s 10B in the present year to the extent of Rs.170.17 lakhs. It is noted by the AO that in assessment year 2001-02 and 2002-03 no such deduction was claimed u/s 10B because there was business loss. In AY 03-04 & 2004- 05, the assessee has claimed deduction u/s 10B to the extent of Rs.159.44 lakhs and Rs.403.54 lakhs respectively. The AO has referred to Explanation –2 (iv) to section 10B as per which 100% EOU has been defined which are required to be approved as a 100% EOU by the Board appointed in this behalf by the Central Govt. in exercise of the powers conferred by section 14 of the Industries (Development & Regulation) Act, 1951 and the rules made under that Act. The AO asked the assessee to furnish a copy of statutory approval as 100% EOU. In reply, the assessee has submitted a copy of acknowledgement dated 27.10.1994 of filing the memorandum for the manufacturing of certain items canvassing it to be a Board approval. It is further noted by the AO that the assessee has filed a copy of approval dated 16.11.1998 granted within the meaning 100% EOU under EHTP Scheme issued by the Dy. Director (Tech.) of STPI (an Autonomous Body), Department of Electronics, Govt. of India, Noida. The AO has referred to a Tribunal decision rendered in the case of Infotech Enterprises Ltd. v. JCIT wherein it was held that STP unit cannot automatically be regarded as a 100% EOU.

By following this Tribunal decision, it was held by the AO that in the absence of specific approval by the Board within section 10B, Explanation-2 (iv) of the Act, the claim of deduction u/s 10B is not allowable to the assessee company and on this basis, he rejected the claim of the assessee for deduction u/s 10B of the Act. An alternative claim was also made before the AO for allowing deduction u/s 10A but the same was also rejected by the AO on the basis that the assessee company’s approval under EHTP Scheme, is dated 16.11.1998 whereas as per the requirement of section 10A, the assessee was required to commence manufacturing or producing computer software on or after 1.4.1994. Being aggrieved, the assessee carried the matter in appeal before CIT(A) who has decided the issue regarding allowing of deduction u/s 10B in favour of the assessee and the revenue is in appeal against the order of  CIT(A).

The revenue contended that since there is no approval from Board as required as per Explanation 2(iv) to section 10B, deduction is not allowable to the assessee u/s 10B.

Having heard both the parties the Tribunal held that,

++ as per the order of CIT(A), this issue has been decided on the basis of Instruction No.1 dated 31.3.2006 issued by CBDT and Minutes of Industrial Ministerial Communication vide letter dated 23.3.2006 issued by the Ministry of Communication and Technology. Vide Notification No.4 (RE-95/92-97) dated 30.4.1995, issued by the Director General (Foreign Trade), Ministry of Commence, in exercise of powers conferred in sub section (1) of section 3 of Foreign Trade (Development and Regulation) Act, 1992 notified the amended STP Scheme provides that the scheme is administered by the Department of Electronics, Govt. of India, through Directors of respective STPs which form part of the STPI, a society registered under the Societies Registration Act, 1860. An application in the prescribed format for establishing a STP unit may be submitted to the Chief Executive of STP Complex along with the details of the software project. Such application will be considered by an Inter Ministerial Standing Committee constituted under the Chairmanship of Secretary, Department of Electronics.

++ copy of registration papers of the appellant filed before the AO clearly shows that STPI is duly authorized authority on behalf of Inter Ministerial Standing Committee to grant registration of the units under the scheme of STPI. Copy of clarification obtained from STPI in this connection has also been perused. It shows that the registration has been granted by Director, STPI on behalf of Inter Ministerial Standing Committee. The CBDT has issued instruction No.1/2006 dated 31.3.2006 on this issue that benefit u/s 10A should not be denied to the assessee only on the ground that registration has been granted by Directors of Software Technology Parks;

++ reliance was placed on the Tribunal decision rendered in the case of ITO v. Regancy Cresations Ltd. Where it was held that registration granted by STPI for setting up of 100% EOU under Software Technology Park Scheme is valid for allowing deduction u/s 10B;

++ Since the facts are identical in the present case, this Tribunal decision rendered in the case of regency Creations Ltd. is directly applicable in the present case and the STIP registration granted to the assessee on 16.11.1998 is valid for allowing deduction to the assessee u/s 10B and hence the order of the CIT(A) on this issue is upheld;

++ in an earlier year i.e. assessment year 2004-05, the AO himself has allowed deduction u/s 10B to the assessee in a scrutiny assessment. It is also not brought on record by the revenue that this order is revised u/s 263 or reopened u/s 147. Under these facts, having decided in AY 2004-05 that the assessee is eligible for deduction u/s 10B, it cannot be denied in this subsequent year on the basis that the assessee is not a 100% EOU for the reason that necessary approval is not with the assessee. This is against the rule of consistency. For this reason also, there is no need to interfere in the order of CIT (A).

Revenue’s appeal dismissed.

(See 2010-TIOL-452-ITAT-DEL in 'Income Tax')


POST YOUR COMMENTS
   
 
 
TIOL SEARCH
 
TIOL Mobile App
TIOL Subscriptions
 All-In-One Package
 Indirect Tax Package
 Income Tax Package
<< More Packages>>
 
   
             
Income Tax Customs Excise Service Tax FEMA DGFT SEZ Misc Pitara Budget
  • Notifications
  • Circulars
  • SC Cases
  • HC Cases
  • ITAT Cases
  • Instructions
  • Advance Ruling
  • Settlement
  • Other Case
  • Directorate of Income Tax (Systems)
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Settlement
  • Advance Ruling
  • Safeguard Duty Notfn
  • Anti-dumping Notfn
  • Drawback Cases
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Settlement
  • Advance Ruling
  • Excise Amendment
  • Clean Energy Cess Notfn
  • MISC Circulars
  • 37B Order
  • Commr.(A) Order
  • CESTAT
  • Notifications
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Miscellaneous
  • Advance Ruling
  • FAQ
  • Finance Act, 1994
  • Commr. (A) Orders
  • 37B Order
  • Removal of Difficulty
  • VCES
  • Accounting Head
  • Exchange Manual
  • Fema Notifications
  • SC Cases
  • HC Cases
  • RBI Notifications
  • Act
  • Rules
  • Regulations
  • Master Circulars
  • RBI Circulars
  • Notifications
  • Circulars
  • Public Notices
  • Trade Notice
  • FTDR Amendment 2010
  • MISC
  • State Acts
  • Notifications
  • Instructions
  • Act 2005
  • Rules 2006
  • DGEP
  • State Policy
  • SC Cases
  • HC Cases
  • VAT Cases
  • Deputation Posts
  • Service News
  • The Insider
  • Transfer
  • Promotion
  • Recruitment Rules
  • Transfer Policy
  • Training Circulars
  • Service Cases
  • MISC
  • Pay Commission
  • Cadre Review
  • Budget Circular 2013-14
  • Union Budgets
  • Economic Surveys
  • Budget Speeches
  • Finance Acts
  • Finance Bill
  • TRU - D. O. Letter
  • A Taxindiaonline Website. Copyright © 2014 Taxindiaonline.com Pvt.Ltd. All rights reserved. | Powered by 4th Dimension