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TMI Blog2014 (5) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... see for the Assessment Year was in order and this claim is directed to be allowed - the appellant would be eligible for deduction on the export profits of the year, earned by it after it was granted registration by the STPII and moreover this deduction would be available only up to AY 2012-13, as per third proviso to s.10A(1) – Decided against Revenue. - ITA no. 5115/Del/2012 - - - Dated:- 11-4-2014 - SHRI J.SUDHAKAR REDDY AND SHRI A.T.VARKEY, JJ. For the Appellant : Shri Mohit Parkh, C.A. For the Respondent :- Shri Keyur Patel, Sr.D.R. ORDER Per: J Sudhakar Reddy: This is an appeal filed by the Revenue directed against the order of the CIT(A)-XVI, New Delhi dt. 24.4.2012 for the AY 2009-10. 2. Facts in brief :- The assessee is a company engaged in the business/profession of computer application services. It exports to foreign based clients, since the date of its incorporation. It filed its return of income on 26.9.2009 through e-filing, declaring net taxable income of Rs.8,88,047/-, after claiming deduction u/s 10A. AO passed an order u/s 143(3) on 8.11.2011 assessing the total income at Rs.57,08,207/-, after denying deduction u/s 10A. On appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing cases. i. CIT vs. EDS Electronic Data Systems (India)P.Ltd. (2012) 211 Taxman 133 (Del); ii. CIT vs. Sonata Software Ltd. (2012) 343 ITR 397 (Bom.) iii. M.L.Outsourcing Services P.Ltd. vs IYO, ITAT Delhi E Bench (2011) 140 TTJ (Del) (UO) 59 iv. CIT vs. Fusion Software Engg.P.Ltd. (2012) 205 Taxman 396 (Karnataka High Court) v. ITO vs. Anita Synthetics P.Ltd., ITAT Ahmadabad C Bench in ITA 1263/Ahd/2005 100 TTJ (Ahd) 227 vi. CIT vs. Sasken Communications Tech Ltd. (2012) 204 Taxman 84 (Kar.H.C.) vii. CIT vs. Western Outdoor Interactive P.Ltd. (2012) 349 ITR 309 (Bom.) viii. ITO vs. Heartland Delhi Transcription Services P.Ltd., ITAT Delhi C Bench reported (2011) 45 SOT 89 (Del) ; ix. CIT vs. Heartland KG Information Ltd. (2012) 359 ITR 1 (Mad.) x. CIT vs. Technovate Solutions P.Ltd. (2013) 354 ITR 110 (Delhi) xi. CIT vs. Bullet International (2012) 349 ITR 267 (All.); xii. DCIT vs. Arts Beauty Exports (2011) 12 Taxman..com 223 (Del-ITAT); xiii. CIT vs. Lovelesh Jain (2012) 204 Taxman 134 (Del); xiv. Opus Software Solutions P.Ltd. vs ACIT (2012) 139 ITD 427 (ITAT Pune Bench B); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gan to manufacture or produce such articles or things or computer software] in such free trade zone or export processing zone : [Provided also that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software :] Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, [2012] and subsequent year. A plain reading of S.10(A) demonstrates that there is no bar that a business unit which is already operating in a domestic tariff area, can be shifted to STPI area as an export unit. 6.1. The CBDT in its Circular no.01/2005 dt. 06.01.2005 reads as follows. Income-tax Act Certain clarification regarding Tax holiday under section 10B of the Income-tax Act to 100% Export Oriented Undertaking Circular No. 1/2005, Dated 6-1-2005 1. Section 10B of the Income-tax Act provides for 100% deduction of profits derived by a hundred per cent Export Oriented Undertaking, from export of articles or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- (i) Undertaking 'A' is set up in Domestic Tariff Area and starts manufacture or production of computer software in Financial Year 1999- 2000 relevant to assessment year 2000-01. It gets approval as 100% EOU on 10th September, 2004 in the financial year 2004-05 relevant to assessment year 2005-06. Accordingly, it shall be eligible for deduction under section 10B from assessment year 2005-06 i.e., the year in which it fulfils the basic condition of being a 100% EOU. Further, the deduction shall be available only for the remaining period of ten years i.e. from assessment year 2005-06 to assessment year 2009-10. This deduction under section 10B for assessment year 2005-06 shall be restricted to the profits derived from exports, from and after the date of approval of the DTA unit as 100% EOU. (ii) Undertaking 'B' set up in Domestic Tariff Area, begins to manufacture or produce computer software in financial year 1996-97 relevant to assessment year 1997~98. It gets approval as 100% EOU in financial year 2007-08 relevant to assessment year 2008-09. No deduction under section 10B shall be admissible to undertaking B as the period of 10 years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , in our opinion, has rightly applied this decision to the facts of the case and allowed the claim of the assessee. 6.4. On the issue as to whether there was reconstruction of the business, considered the submissions made by the assessee and held as follows. Coming to the facts of the appellants case, the AR has furnished before the AO and before me copy of the report u/s 10A in Form 56F giving the computation of the deduction claimed u/s 10A, copy of the green card dated 11.8.2008 issued by the STPII, copy of letter dated 11.8.2008 of the STPII specifying the list of capital goods to be imported/procured locally for the purpose of business of the appellant as well as copy of the letter dated 11.8.2008 of the STPII with respect to the acceptance of legal agreement. These details support the case of the appellant that it is eligible for deduction u/s 10A. As regards the contention of the Assessing Officer that the appellant company was formed by the reconstruction of business, the appellant s AR has furnished list of share holders and directors as on 31.3.2008 and 31.3.2009 to prove that there was no reconstruction of the business. No assets are stated to have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
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