2018 (4) TMI 1366 - HC - Income Tax

Benefit claimed by the assessee u/s 10B - Held that - In view of the omission of sub-Section (9) in Section 10B with effect from 01. 04.2004 should it be understood that the said section never existed in the statute book and therefore, the benefit claimed by the assessee under Section 10B should be allowed. See CIT-A vs. M/S. GE THERMOMETRICS INDIA (P) LIMITED 2015 (1) TMI 10 - KARNATAKA HIGH COURT - Decided in favour of assessee.

Summary

Issues:
1. Entitlement to deduction under Section 10B of the Income Tax Act, 1961.

Analysis:
The High Court of Karnataka heard an appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961, against an order passed by the Income Tax Appellate Tribunal. The main issue raised before the Tribunal was whether the assessee was entitled to the benefit of deduction under Section 10B of the Act. The Tribunal found that the assessee's claim for deduction was valid as the provisions of Section 10B(9) were no longer in existence in the statute book, entitling the assessee to the deduction for the assessment year 2005-06.

The Revenue contended that the Tribunal erred in holding that the omission of sub-section 9 of Section 10B meant that the section never existed in the statute book, and thus, the benefit claimed by the assessee under Section 10B should be allowed. Both parties referred to a previous judgment of the Court in a similar case and argued their positions.

Upon reviewing the previous judgment and the arguments presented, the Court concluded that the omission of sub-section (9) of Section 10B without a saving clause or provision meant that the section should be considered as if it never existed in the statute book. Therefore, the Assessing Officer was not justified in denying the benefit to the assessee based on a provision that was no longer in effect. The Court emphasized that the benefit under Section 10B is for the undertaking and not the person running the business, and dismissed the appeals in favor of the assessee.

Based on the precedent set by the previous judgment and its applicability to the current case, the High Court dismissed the appeal, upholding the decision that the assessee was entitled to the benefit of deduction under Section 10B of the Income Tax Act, 1961.