9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2008 (7) TMI 979 - HC - Income TaxDeduction u/s 10B - Not a newly established undertaking - specified conditions were not fulfilled - Tribunal affirming the order of the CIT(A) in directing the AO to allow deduction u/s 10B - HELD THAT - In the present case the assessee had started the development of computer software in the assessment year 1998-99 and was registered with the Software Technology Park with effect from 24-3-2000 therefore the 10 years period has to be reckoned from the assessment year 1998-99. The assessee has claimed exemption for the first time in the assessment year 2001-02 which is well within 10 years. Therefore the unit of the assessee cannot be denied the said exemption on the ground that it is not the newly established undertaking in the assessment year in question. It is well-settled law that headings or titles prefixed to sections or group of sections can be referred to in construing an Act of the legislation only when the enacting words are ambiguous but when the language of the section is clear then the heading cannot be used to give a different effect to clear words in the section. In our view there is no ambiguity in section 10B of the Act which provides exemption to certain newly established hundred per cent export-oriented undertakings on fulfilling certain conditions for a period of ten consecutive assessment years. The initial year is the year in which the eligible undertaking begins to manufacture or produce articles or things or computer software section 10B of the Act does not provide any restriction that in each of the years of claim the export-oriented undertaking should be newly established. Indeed relevance of newly established undertaking is only to identify the initial year of that period of ten years for which the assessee is eligible for claim of exemption under section 10B of the Act. Since in the present case undisputedly the initial year is the assessment year 1998-99 therefore the assessee was rightly held to be fully eligible for exemption under section 10B of the Act for the assessment year under consideration i.e. 2001-02 as it was the fourth year out of ten years beginning with the initial assessment year in which it began to develop and export the computer software. Therefore there is no merit in this appeal as no substantial question of law arises from the impugned order. Dismissed.
Issues:
Interpretation of section 10B of the Income-tax Act, 1961 regarding eligibility for exemption for newly established export-oriented undertakings. Analysis: 1. The appeal was filed by the revenue against the order of the Income-tax Appellate Tribunal regarding the eligibility of the assessee for exemption under section 10B of the Income-tax Act, 1961 for the assessment year 2001-02. 2. The assessee, engaged in the export of computer software, claimed exemption under section 10B as a 100% export-oriented undertaking. The Assessing Officer questioned the claim as the unit was not newly established in the relevant year. 3. The CIT(A) allowed the claim, stating that the assessee fulfilled all conditions for exemption under section 10B, available for ten years from the year of commencement of manufacturing. 4. The revenue appealed to the Tribunal, which upheld the CIT(A)'s decision. 5. The revenue further appealed, contending that since the unit started production in 1998-99, it could not be considered newly established in 2001-02 for section 10B benefits. 6. The Court analyzed section 10B, emphasizing that the exemption is available for ten consecutive years from the year of commencement of manufacturing for export-oriented undertakings fulfilling specified conditions. 7. It was clarified that the term "newly established undertaking" in section 10B is to identify the initial year for the ten-year exemption period, not a requirement for each claiming year. 8. The Court held that as the assessee started software development in 1998-99 and claimed exemption in 2001-02 within the ten-year period, it was eligible for section 10B benefits. 9. Consequently, the appeal was dismissed as no substantial question of law arose from the Tribunal's order.
|
