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2024 (1) TMI 381 - AT - Income TaxEligibility for benefits of section 10AA with regard to units at Chennai and at Coimbatore SEZ - whether assessee has not satisfied the conditions mentioned u/s 10AA(4)? - HELD THAT - In view of the finding of Ld.CIT(A), even if it is assumed that existing plant machinery was used at Chennai SEZ or Commercial SEZ even then the value would be lower than 50%. This finding is not controverted by the Revenue. Therefore, we do not find any merit in the appeal of the Revenue, the same is hereby dismissed. Grounds raised by the Revenue are accordingly, dismissed.
Issues Involved:
1. Eligibility for benefits u/s 10AA of the I.T. Act, 1961 for units at Chennai and Coimbatore SEZs for Assessment Years 2014-15 and 2016-17. Summary of the Judgment: Issue 1: Eligibility for benefits u/s 10AA of the I.T. Act, 1961 for Assessment Year 2014-15 (ITA No.7568/Del/2018): 3. The only effective ground raised by the Revenue in this appeal is against the eligibility of benefit u/s 10AA of the Income Tax Act, 1961 ("the Act"). 4. Facts in brief are that the assessee company e-filed return of income, declaring total income of INR 1,26,75,220/- on 29.03.2015. The case was selected for scrutiny assessment and the assessment u/s 143(3) of the Act was framed on 15.12.2016, disallowing the claim u/s 10AA amounting to INR 10,58,45,315/-. 5. Ld.CIT DR for the Revenue argued that Ld.CIT(A) was not justified in deleting the disallowance, relying on the assessment order. 6. Ld. Sr. Counsel for the assessee, Shri Ajay Vohra, opposed the submissions and submitted that the issue is covered in favor of the assessee, relying on the order of Ld.CIT(A). 7. We have heard contentions of both parties and perused the material. Ld.CIT(A) has reproduced the order for Assessment Year 2013-14, giving a clear finding in respect of eligibility of benefit u/s 10AA. The AO had denied exemption u/s 10AA citing the transfer of assets from an existing business, but Ld.CIT(A) found that the assets were acquired as part of a running business unit and continued operations as a non-SEZ unit. 8. Ld.CIT(A) concluded that even if existing plant and machinery were used, the value would be lower than 50%, thus not violating the conditions for claiming deduction u/s 10AA. Therefore, we do not find any merit in the appeal of the Revenue, and the same is dismissed. 9. In the result, the appeal of the Revenue is dismissed. Issue 2: Eligibility for benefits u/s 10AA of the I.T. Act, 1961 for Assessment Year 2016-17 (ITA No.1068/Del/2020):10. Revenue raised similar grounds of appeal for Assessment Year 2016-17. 11. Facts are identical to those in ITA No.7568/Del/2018 for Assessment Year 2014-15. We have decided the issue against the Revenue by observing as under: 7. Ld.CIT(A) has reproduced the order for Assessment Year 2013-14, giving a clear finding in respect of eligibility of benefit u/s 10AA. The AO had denied exemption u/s 10AA citing the transfer of assets from an existing business, but Ld.CIT(A) found that the assets were acquired as part of a running business unit and continued operations as a non-SEZ unit. 8. Ld.CIT(A) concluded that even if existing plant and machinery were used, the value would be lower than 50%, thus not violating the conditions for claiming deduction u/s 10AA. Therefore, we do not find any merit in the appeal of the Revenue, and the same is dismissed. 12.1. Therefore, taking the consistent view, grounds raised in this appeal filed by the Revenue are also dismissed. 13. In the result, the appeal of the Revenue is dismissed. 14. In the final result, both appeals of the Revenue in ITA No.7568/Del/2018 [Assessment Year 2014-15] and ITA No.1068/Del/2020 [Assessment Year 2016-17] are dismissed. Order pronounced in the open Court on 31st October, 2023.
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