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TMI Blog2014 (7) TMI 430X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessee did not obtain the specific approval by the Board which is required for the purpose of claiming of deduction under Section 10B. The Assessing Officer also rejected the assessee's alternative claim under Section 10A on the ground that - (i) no such claim was made in the return of income, (ii) deduction under Section 10A is available only to a newly set up unit in EHTP/STP while the assessee had the undertaking in DTA, and (iii) the sale proceeds are not received in or brought into India by the assessee in convertible foreign exchange. 3. On appeal, learned CIT(A) allowed the assessee's claim for deduction under Section 10B and, therefore, he did not examine the assessee's alternative claim for allowability of deduction under Section 10A. The Revenue had filed the appeal to the ITAT against the order of learned CIT(A) while the assessee was in cross objection against the non-adjudication of the assessee's claim under Section 10A. The ITAT, in ITA No.2706/Del/2008, dismissed the Revenue's appeal with the following finding:- "7. Since the facts are identical in the present case, this Tribunal decision rendered in the case of Regency Creations Ltd. (supra) is directly a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 10-B. The orders of the Tribunal are consequently erroneous, and its reasoning, unsupportable. 18. In the light of the above discussion, the question of law framed is answered in favour of the revenue, and against the assessee; the appeals are therefore allowed." 6. Thereafter, the assessee filed the review petition before the Hon'ble Jurisdictional High Court which, by order dated 4th January, 2013, disposed of the assessee's petition as under:- "Issue notice. Sh. Kiran Babu, Sr. Standing Counsel accepts notice on behalf of the Revenue. The applicant assessee had succeeded before the Tribunal in the contention that it was entitled to the benefit of Section 10B of the Income Tax Act. It had urged that the supporting materials disclose that there was STP clearance/approval under Section 10A and that such approval was sufficient to entitle it to the benefit of Section 10B. By judgment, this Court negatived the plea with regard to the approval vis-a-vis Section 10B and has ruled that separate regime exists. The applicant contends that the CIT(A) and the Tribunal had, in the present case, not gone into the merits of the alternative claim for entitlement under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e benefits available to EHTP unit on conversion of DTA unit to be EHTP unit. He also referred to nine conditions imposed upon by EHTP Secretariat for permitting the conversion of DTA unit to EHTP unit. He submitted that once the Government of India has permitted the assessee to convert its DTA unit into EHTP unit and also certified that all the facilities and privileges admissible under the EHTP scheme would be available to the assessee, the objection of the Assessing Officer that the assessee is working in DTA and not in EHTP is untenable. With regard to receipt of sale proceed in foreign exchange, it is submitted by the learned counsel that during the assessment proceedings, the assessee had furnished all the evidences which duly established that the sale proceed was received by the assessee in convertible foreign exchange. He had also submitted that auditor's certificate in which it is certified that the sale proceeds had been received in convertible foreign exchange. It is further submitted by the learned counsel that the requirement of receipt of sale proceeds in the foreign exchange is equally applicable for allowability of deduction under Section 10B. That when the CIT(A) he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dismissing the appeal, that the Tribunal had arrived at the correct conclusion that the requirement of filing the audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of section 80-IA(7) would be met." 12. The ratio of the above decision of Hon'ble Jurisdictional High Court would be squarely applicable to the assessee's case because, in the present case also, admittedly, the assessee made a claim of deduction under Section 10A during assessment proceedings and also filed the audit report. In fact, the assessee's case is in a better footing because in the return of income, the assessee had claimed deduction under Section 10B. The deduction under Section 10A was only an alternative claim which assessee made only when the Assessing Officer disputed the assessee's eligibility to deduction under Section 10B. Admittedly, the assessee could not have claimed deduction under Section 10B and 10A both in the return of income. Moreover, Hon'ble Jurisdictional High Court, in the review petition, has directed to consider the assessee's claim under Section 10A on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve) years. For this purpose, you will furnish the requisite legal agreement. After the export obligation period is over the unit shall be allowed to produce for domestic market in the light of Industrial Policy in force at the time in relation to manufacture of items reserved for small scale sector and sectoral policy prevailing at that point of time. iii) The DTA (Domestic Tariff Area) sale entitlement shall be in accordance with the notification no.42(N-B)92-97 dated 14/09/92 issued by Ministry of Commerce. iv) In case external commercial borrowing is resorted to you shall obtain necessary permission from Ministry of Finance (D/O Eco. Affairs), Government of India. v) It is noted that you require imported capital goods worth Rs. 120.00 lacs (US$2.86 lacs) at present for the project. You are advised to send the list of capital goods proposed to be imported duly signed, to the Designated Officer of STPI-Noida. vi) Export turnover of Rs. 4560.00 lacs (US$108.57 lacs) in 5 years is anticipated according to your projections. vii) Import of second hand capital goods shall be permitted in accordance with Import Export policy. viii) Separate accounts shall be maintained for EHTP uni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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