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2015 (11) TMI 1755 - AT - Income TaxDeduction u/s 10A denied - alternate Claim - no such claim was made by the assessee in the return of income filed and this was not raised as an additional ground/claim but as an alternative claim before the appellate authority where a claim for deduction u/s 108 was already made in the return of income - Held that - When the claim of deduction u/s 10B was denied the AO ought to have examined whether the assessee is eligible for deduction u/s 10A of the Act. The CBDT circular no.14 (XL-35) dated 11.4.1955 has clarified that the revenue shall not take advantage of ignorance of the assessee as to his rights and the officers are duty bound to grant deduction legally available to the assessee. See Judgment of the Hon ble Delhi High Court in the case of CIT vs Technovate E Solution P Ltd reported 2013 (3) TMI 372 - DELHI HIGH COURT wherein it was held that registration with Software Technology Parks of India is sufficient to allow deduction u/s 10A - copies of the certificate of registration issued by STPI and the certificate of the Chartered Accountant in form 56F are also enclosed in the paper book filed by the assessee for the respective assessment years. On examination of the certificates of registration under STPI and the certificate of the Chartered Accountant in form 56F we are of the view that the CIT(A) is justified in allowing the alternative claim of deduction u/s 10A of the Act. It is ordered accordingly. - decided against revenue
Issues:
- Eligibility for deduction under section 10A of the Income Tax Act. - Reopening of assessment for assessment years 2008-09 and 2010-11. - Denial of deduction under section 10B of the Income Tax Act. - Compliance with conditions for claiming deductions. - Applicability of alternative claim for deduction under section 10A. Eligibility for Deduction under Section 10A: The case involved appeals by the department against orders of the CIT(A) for assessment years 2008-09 and 2010-11. The CIT(A) allowed the alternative claim of the assessee for deduction under section 10A of the Income Tax Act. The CIT(A) examined the compliance of all conditions under section 10A and directed the AO to allow the deduction. The Tribunal upheld the CIT(A)'s decision based on precedents that when deduction under section 10B is denied, the eligibility for deduction under section 10A should be examined. Reopening of Assessment: The assessment for both years was reopened due to the assessee not being eligible for deduction under section 10B, as per the AO's reasoning. The AO rejected the deduction under section 10B, citing the requirement for approval by the Central Government for claiming the deduction. The reassessment was completed by denying the deduction under section 10B. Denial of Deduction under Section 10B: The AO denied the deduction claimed under section 10B for both assessment years, relying on a judgment of the Delhi High Court. The AO stated that the approval obtained by the export-oriented unit was not valid for claiming the deduction under section 10B. The CIT(A) upheld the AO's decision regarding the denial of deduction under section 10B. Compliance with Conditions for Claiming Deductions: The AO, in the remand report, did not mention non-compliance with conditions for claiming deduction under section 10A. The AO raised a technical objection that the claim was not made in the return of income. However, the Tribunal noted that the claim for deduction under section 10B was previously granted by the revenue. The Tribunal emphasized that the revenue should not take advantage of the assessee's ignorance of rights and must grant deductions legally available. Applicability of Alternative Claim for Deduction under Section 10A: The CIT(A) allowed the alternative claim for deduction under section 10A based on the registration with Software Technology Parks of India and compliance with conditions. The Tribunal found the CIT(A)'s decision justified, as the certificates of registration and the Chartered Accountant's report supported the eligibility for deduction under section 10A. Consequently, the appeals filed by the revenue were dismissed. This detailed analysis of the judgment covers the issues of eligibility for deduction under section 10A, reopening of assessment, denial of deduction under section 10B, compliance with conditions for claiming deductions, and the applicability of the alternative claim for deduction under section 10A.
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