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2017 (3) TMI 1306 - AT - Income TaxEligibility for deduction u/s l0A - Held that - STPI approval was received by the assessee company on 23.09.2008 in the middle of the previous year relevant to the AY 2009-10. We further note that in the AY 2009-10 it was held that profits derived from the export of computer software from and after the date of approval of the STP unit on 23/09/2008 will be eligible for deduction u/s l0A. In the A Y 2009-10 the disallowance of deduction u/s l0A was confirmed because the assessee failed to provide details before the AO to prove that the profits derived during the A Y 2009-10 are from software exports after the date of approval. Since, STPI approval was received in the previous year relevant to A Y 2009-10, therefore, the profits derived from export of computer software during the previous year relevant to AY 2010-11 will be eligible for deduction u/s l0A provided other conditions of sec. l0A are fulfilled by the assessee company. In the instant AY 2010-11 there is no dispute that the other conditions of see lOA are fulfilled by the assessee. We further note that that in the A Y 2011-12 the AO has allowed the assessee s claim of deduction u/s 10A. Thus AO is not justified in disallowing the claim of deduction u/s 1OA. - Decided in favour of assessee
Issues Involved:
- Allowance of deduction u/s. 10A - Disallowance of deduction u/s. 10A based on STPI certificate - Dispute over conditions of Section 10A(2) - Appeal by Revenue and Cross Objection by Assessee - Interpretation of STPI approval date for eligibility of deduction - Compliance with conditions of Section 10A - Previous rulings on similar grounds Comprehensive Analysis: The case involved an Appeal by the Revenue and a Cross Objection by the Assessee regarding the allowance of deduction u/s. 10A in relation to the assessment year 2010-11. The Revenue contended that the Ld. CIT(A) erred in allowing the deduction by ignoring the AO's observations that the STPI certificate was obtained for existing business, not new business, thus not fulfilling the conditions of Section 10A(2). The Assessee, on the other hand, argued that the disallowance of the deduction was erroneous and should be restored, citing previous rulings where the deduction was allowed by ITAT for AY 2009-10. The Ld. CIT(A) extensively discussed the issue, noting that the STPI approval was received by the Assessee in the middle of the previous year relevant to AY 2009-10. It was held that profits derived from the export of computer software after the approval date would be eligible for deduction u/s. 10A. Since the Assessee fulfilled other conditions of Section 10A in AY 2010-11, the disallowance of the deduction was deemed unjustified. Additionally, it was highlighted that in AY 2011-12, the AO had allowed the Assessee's claim of deduction u/s. 10A, further supporting the Assessee's position. Upon perusal of the findings, the Tribunal upheld the Ld. CIT(A)'s order, dismissing the Revenue's Appeal. The Tribunal concluded that the AO was not justified in disallowing the claim of deduction u/s. 10A, as the Assessee met the necessary conditions for eligibility. Consequently, the Cross Objection by the Assessee was deemed infructuous and dismissed. The final decision was pronounced in the Open Court on 22/03/2017. In summary, the judgment revolved around the interpretation of the STPI approval date for deduction eligibility under Section 10A, the fulfillment of statutory conditions, and the consistency of decisions across assessment years, ultimately resulting in the dismissal of the Revenue's Appeal and the Assessee's Cross Objection.
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