9911796707
TMI Blog2012 (5) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... 0B. The said return was originally processed by the Assessing Officer u/s 143(1) allowing the claim of the assessee for deduction u/s 10B. Thereafter assessment under section 143(3) was also made by the Assessing Officer on 31.03.2003 allowing the deduction under section 10B. Subsequently the assessment was reopened by the Assessing Officer for the reason that the assessee was not eligible for deduction u/s 10B and notice under section 148 was issued by him to the assessee on 30.3.2006. In reply filed vide letter dated 4.4.2006, the assessee requested that the return filed originally by it on 30.10.2001 may be treated as the return filed in response to notice u/s 148. During the course of reassessment proceedings, the validity of notice issued by the Assessing Officer u/s 148 was challenged by the assessee by raising certain objections. The Assessing Officer however overruled the said objections and proceeded to complete the reassessment u/s 147 r.w.s. 143(3) vide an order dated 28.9.2006. In the said assessment, he disallowed the claim of the assessee for deduction u/s 10B on the ground that the assessee company was eligible for such deduction only for a period of 5 years i.e. Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. He held that for reopening the assessment validily, only prima facie satisfaction of the Assessing Officer was required and such satisfaction was very much there in the case of the assessee since excessive relief was apparently granted to the assessee in the original assessment by allowing its claim for deduction u/s 10B wrongly. He, therefore, upheld the validity of reassessment made by the Assessing Officer. As regards the other issues raised by the assessee relating to computation of deduction u/s 80HHC, the learned CIT (A) held that foreign exchange gain and stitching charges received by the assessee were forming part of the profits of the business of the assessee and as already held by him in assessee's own case for Assessment Year 2003-04, the same was not to be excluded from the profits of the business for the purpose of computing deduction u/s 80HHC. As regards other income representing premium received on license/quota, the learned CIT (A) directed the Assessing Officer to treat the same as the items mentioned in Sec. 28 (iiia), (iiib) and (iiic) for the purpose of computation of deduction u/s 80HHC as clarified in the CBDT instructions issued on 23-02-1998. As rega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same shows that similar issue has been considered and decided by the Tribunal vide paragraph Nos.18 to 23 which read as under: "18. The undisputed facts relating to ground no.1 are that, the assessee was incorporated in Assessment Year 1993-94, and during that year, it just did some job works of garments. No machinery was purchased. During the Assessment Year 1994-95, the assessee started production of garments and claimed exemption under section 80HHC. Similar is the case for Assessment Year 1995-96. For the first time in Assessment Year 1996-97, the assessee opted to claim deduction under section 10B. The assessee claimed deduction under section 10B for five consequent Assessment Years i.e. from Assessment Year 1996-97 to 2000-01 and the same was allowed. 19. Now, we consider the amendment brought in statute w.e.f. 1st April 1999. Sub section (3) of section 10B reads as follows:- "Profits and gains referred to in sub-section (1), shall not be included in the total income of the assessee in respect of any ten consecutive Assessment Years beginning with the Assessment Year relevant to the previous year in which the undertaking beginning to manufacture or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f development and export of software data processing on 14.12.1992, the Software Technology Park of India (STPI) granted permission for the firm for setting up 100% EOU under the Software Technology Park Scheme. Later on STPI has also granted approval under section 14 of the Industries Act, to enable it to avail approval under section 14 of the Industries Act, to enable it to avail the benefits under section 10A and 10B from financial year 1993-94 upto 18.9.1997, the firm was exclusively exporting its software to an American Company. On 19.9.1997, the firm was converted into a private limited company and all the assets and liability of the firm became the property of the assessee company. Consequently, all the partners became share holders in the assessee company and the capital of the firm became paid up capital of the assessee company. In Assessment Year 2000-01, the assessee company for the first time claimed exemption under section 10B. The A.O denied the exemption u/s 10B. The CIT (A) also confirmed the action of the A.O. On second appeal before the Tribunal, the Tribunal after discussing the issue in detail held that the assessee is entitled for deduction under section 10B. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous year, (iii) it is not formed by the splitting up, or the reconstruction, of a business already in existence: Provided that this condition shall not apply in respect of any undertaking which is formed as a result of the re-establishment, reconstruction or revival by the assessee of the business of any such industrial undertaking as is referred to in s.33B, in the circumstances and within the period specified in that section; (iv) it is not formed by the transfer to a new business of machinery or plant previously used for any purpose". The learned CIT (A) has also held that the assessee is not entitled to the claim of exemption in view of the amended provisions of s.10B. This finding of learned CIT (A) is not based on construction of relevant statutory provisions. The CBDT vide circular No.1 of 2005 (2005) 193 CTR (St) 85) has clarified the position and, therefore, in view of the provision of s.10B as amended w.e.f. 1st April, 1999, the assessee shall be entitled to claim exemption in respect of ten consecutive Assessment Years beginning with the Assessment Year relevant to the previous year in which the undertaking beings to manufacture or produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee in assessee's own case for Assessment Year 2002-03 following its earlier two decisions in the cases of M/s Consindia Pvt. Ltd. (ITA 8270/Mum/2004 dated 29.1.2008 (Supra) and in the case of M/s Tech Books Electronics Services (P) Ltd., (100 ITD 125) (Del.), wherein it was held that as per the amendment made in Section 10B(3) by the IT (Second Amendment) 1998 w.e.f. 1.4.1999, the assessee was entitled for deduction u/s 10B for a total period of 10 years including the period of 5 extended years. Respectfully following the said decision of the Tribunal, we uphold the impugned order of the learned CIT (A) allowing the claim of he assessee for deduction u/s 10B for the year under consideration i.e. Assessment Year 2001-02. Ground No.1 of the Revenue's appeal is accordingly dismissed. 8. As a result of our decision rendered on the issue raised in Ground No.1 allowing the claim of the assessee for deduction u/s 10B, the issue raised in Ground No.2 relating to assessee's alternative claim for deduction u/s 80HHC has become infructuous. We therefore, do not deem it necessary or expedient to adjudicate upon the same. 9. As regards the application filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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