2010 (3) TMI 1182 - AT - Income Tax

Summary

Issues involved: The judgment involves the eligibility of an assessee company to claim deduction under section 10A of the Income Tax Act, 1961 for Assessment Years 2005-06 & 2006-07.

Issue 1: Eligibility for deduction under section 10A

The Revenue disallowed the deduction claimed under section 10A for both assessment years due to the company starting business activities before obtaining STPI approval, and transferring plant and machinery to the STP unit. The CIT(A) held that the assessee complied with all conditions for deduction under section 10A, citing precedents and Board Circular No.1 of 2005. The Revenue contended that the conditions under section 10A(2)(i)(b) and 10A(2)(iii) were not fulfilled. The Tribunal referred to the case of Mahavir Spinning Mills Ltd. and the order in the case of M/s. Foresee Information Systems (P) Ltd., rejecting the Revenue's grounds and upholding the eligibility of the assessee for deduction under section 10A.

Decision:

The Tribunal dismissed the appeals filed by the Revenue, upholding the eligibility of the assessee company to claim deduction under section 10A for the Assessment Years 2005-06 & 2006-07. The decision was based on the compliance with conditions and precedents supporting the eligibility for the deduction.