Scope of exemption u/s10A. - Income Tax - 1732/CBDT

INSTRUCTION NO. 1732/CBDT Dated: November 12, 1986 Section 10A of the Income-tax Act, 1961 provides for exemption of profits and gains derived by an assessee from an industrial undertaking set-up in any Free Trade Zone subject to the conditions laid down in clauses (i), (ii), and (iii) of sub-section (2) of this section. Clause (i) of sub-section (2) which lays down the condition with reference to the year of beginning of the activity of the undertaking, uses the words "manufacture or produce articles of things." 2. A question has been raised whether the industrial undertakings in Free Trade Zones which only assemble or process articles or things imported from abroad are entitled to this exemption. 3. The Board have taken the view that the benefit of this exemption u/s 10A of the Income-tax Act, 1961 will be available to industrial undertakings in Free Trade Zones engaged in processing and assembling of imported components for export. 4. Completed assessments should not be re-opened on this issue and pending appeals may be conceded accordingly. 5. The above instructions may please be brought to the notice of all the officers working in your charge. 6. Hindi version will follow.