Taxindiaonline.com
Taxindiaonline.com Taxindiaonline.com TIOL Tube Taxindiainternational.com
 
LOGIN
Forgot Password |  Register  
Thursday , December 8, 2016 | Updated : Dec 8, 19:02 IST
GST   Income Tax    Customs    Excise    Service Tax    FEMA    DGFT    SEZ    Misc    Pitara    Budget   
About Us Contact Us
Taxindiaonline.com Taxindiaonline.com Taxindiainternational.com
 
 
NEWS FLASH
 
Modi Govt rolls out tax incentive, discounts and concessions if payments are made by credit or debit cards; 10% discount by toll plaza; No service tax upto Rs 2000 (See 'Breaking News') I-T - Whether when loss-making Indian subsidiary of a non-resident company receives some voluntary contribution from parent, aimed at protecting its investments, such payment is to be construed as capital receipt - YES: SC (See 'Breaking News') Import duty on Wheat reduced from 10% to NIL (See 'Notifn 60' in What's New) India-UK Conference on Ease of Doing Business (See 'Mixed Buzz') Govt mulling tax sops for digital payments upto a limit GST - Let's not water down the Territorial Waters issue (See 'THE COB (WEB)' Column) Cabinet okays proposal to rechristen Delhi-Mumbai Corridor as National Corridor (See 'Mixed Buzz') Deposits in Jan Dhan Accounts Not Alarming - Income Tax Department (See 'DDT') I-T - Whether literal interpretation of terms while construing document can be ground for reversal of an order based on undisputed facts found during search & seizure operations - NO: HC (See 'Breaking News') Income Tax Staff to be diverted to Investigation Directorate (See 'DDT') ST - Whatever may be activity of work contractor, it is nature of services of Appellant that has to be looked into for imposition of service tax: CESTAT (See 'Breaking News') Unemployment is more among Graduates: Labour Minister (See 'Mixed Buzz') Rs.3.81 Trillion worth bank notes supplied by RBI and there is more - RBI (See 'DDT') EPFO takes steps to cover Contract Workers in Govt Departments (See 'Mixed Buzz') Merger of Plan and Non Plan expenditures (See 'DDT') Cus - Whatever may be circumstances under which goods could not be cleared from bonded warehouse, duty liability would be at rate prevalent at time of filing ex-bond BoE and not when they were bonded: CESTAT (See 'Breaking News') Government, biggest Litigant (See 'DDT') Union Cabinet approves Metro Project for Pune + Nutrient-based subsidy rates for phosphatic & potassic fertilisers for current fiscal RBI lowers GDP growth rate to 7.1%; No change in interest rate Income Tax Department identifies Jan Dhan accounts subjected to heavy deposits CBDT Chairman asks field formations to provide hands to Investigation Wing (See 'Instruction' in Income Tax) Manufacture of 'Other Tobacco Products' - Compulsory Licensing under consideration: Minister Govt issues 96 India Business Cards to businessmen from SAARC Recommendations to Govt: Include Exempted Depts within purview of EPF (See 'Mixed Buzz') Govt notifies rule to amend PML(Appeal) Rules, 2005 (See 'PMLA Notifn' in FEMA) Govt to plan for compulsory licensing of Tobacco (See 'Mixed Buzz') Govt to introduce Centralized Public Grievance Redressal system (See 'Mixed Buzz')
 
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
   
 
 
 
Download on the App Store
Get it on Google play
TIOL SEARCH
 
TIOL Subscriptions
 All-In-One Package
 Indirect Tax Package
 Income Tax Package
<< More Packages>>
Visit TIOLCorplaws.com
 
   
             
Income Tax Customs Excise Service Tax FEMA DGFT SEZ Misc Pitara Budget
  • Income-Tax Rules
  • Income-Tax Act
  • Notifications
  • Circulars
  • Instructions
  • SC Cases
  • HC Cases
  • ITAT Cases
  • Advance Ruling
  • Settlement
  • Other Cases
  • Directorate of Income Tax (Systems)
  • Reports
  • Customs Rules
  • N T/CAA/DRI
  • Tariff Notfn
  • CVD
  • Non Tariff Notfn
  • Circulars
  • Anti-dumping Notfn
  • Safeguard Duty Notfn
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • Settlement
  • Drawback Cases
  • MISC Circulars
  • CCRs - 2004
  • Central Excise Rules
  • Tariff Notfn
  • Non Tariff Notfn
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • Cesses Notfications
  • Excise Amendment
  • MISC Circulars
  • 37B Order
  • Settlement
  • Commr.(A) Order
  • Tribunal
  • GST Kitty
  • Notifications
  • Service Tax Rules
  • 37B Order
  • Circulars
  • SC Cases
  • HC Cases
  • Cestat Cases
  • Advance Ruling
  • FAQ
  • Finance Act, 1994
  • Commr. (A) Orders
  • Removal of Difficulty
  • VCES
  • Accounting Head
  • Miscellaneous
  • DIPP Notification
  • FDI Approved
  • Exchange Manual
  • Fema Notifications
  • SC Cases
  • HC Cases
  • RBI Notifications
  • RBI Circulars
  • Act
  • Rules
  • Regulations
  • Master Circulars
  • PMLA Notifications
  • Depository Scheme
  • Press Note
  • Notifications
  • Circulars
  • Public Notices
  • Trade Notice
  • FTDR Amendment 2010
  • Notifications
  • Instructions
  • Act 2005
  • Rules 2006
  • DGEP
  • State Acts
  • State Policy
  • MISC
  • SC Cases
  • HC Cases
  • VAT Cases
  • Miscellaneous
  • Service News
  • Promotion
  • Transfer
  • Deputation Posts
  • Cadre Review
  • Transfer Policy
  • Training Circulars
  • Recruitment Rules
  • Pay Commission
  • Service Cases
  • The Insider
  • MISC
  • Budget Speeches
  • Union Budgets
  • Economic Surveys
  • TRU - D. O. Letter
  • Finance Acts
  • Finance Bill
  • Budget Circular
  • A Taxindiaonline Website. Copyright © 2016 Taxindiaonline.com Pvt.Ltd. All rights reserved. | Powered by 4th Dimension