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TMI Blog2016 (2) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the Tribunal. However, the Tribunal upheld the decision of the learned Commissioner (Appeals) by . dismissing the appeal by the Department in respect of all these assessment years. Thus we uphold the decision of the learned Commissioner (Appeals) in allowing assessee’s claim of deduction under section 10B.- Decided in favour of assessee MAT - Exclusion of income of SEZ Unit while computing book profit under section 115JB - Held that:- Taking into consideration the effect of CBDT Circular no.3/2008 and relying upon the decision of the Tribunal, Mumbai Bench, in Genesys International Corporation Ltd. v/s ACIT, [2012 (12) TMI 491 - ITAT MUMBAI] held that income / profit relating to SEEPZ unit has to be excluded while computing book profit under section 115JB. - Decided in favour of assessee Addition of deemed dividend under section 2(22)(e) - CIT(A) deleted the addition - Held that:- Only reason for which the Assessing Officer has treated the amount as deemed dividend is both the companies have some common shareholders cannot be a reason for treating the amount as deemed dividend under section 2(22)(e). As held by the learned Commissioner (Appeals) since the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and goods but got its work done on job . work basis. The Assessing Officer also noted that unit is made out of re structuring of old unit as held in the earlier assessment year. When this fact was pointed out by the Assessing Officer to the assessee, the assessee submitted that since it has fulfilled all conditions of section 10B, it is entitled to claim deduction. It was also submitted that the Tribunal has upheld assessee s claim of deduction under section 10B while dismissing Department s appeal in assessment year 2003 04 to 2006 07. Though, the Assessing Officer did not dispute the fact that assessee s claim of deduction under section 10B was allowed by the Tribunal in the preceding assessment years but observing that the Department has challenged the decision of the Tribunal in appeal preferred before the Hon'ble Jurisdictional High Court to maintain the consistency in the stand taken by the Department in the earlier year, the Assessing Officer rejected assessee s claim of deduction under section 10B. Being aggrieved of such disallowance of deduction claimed, assessee preferred appeal before the learned Commissioner (Appeals). 4. The learned Commissioner (Appeals), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsonance with the order of Tribunal for earlier 3 years i.e. from A.Y. 2003-04 to A.Y. 2005-06. Even the AO has mentioned in his order that in earlier year the deduction was denied by the AO and ld. CIT(A) has allowed the issue in favour of assessment order of ld. CIT has been confirmed by Tribunal. However, revenue has not accepted the order of Tribunal and they are going to file the appeal before Hon ble High Court. From this fact, it is clearly established that on the basis of denial of deduction in earlier year the AO has disallowed the claim on deduction u/s 10B for the year under consideration. Since facts are similar, therefore in view of the consistency the deduction has to be allowed. Accordingly, we confirmed the order of CIT(A) for the year under consideration and reject the ground of the department. 6. Facts being materially identical in the impugned assessment year, respectfully following the decision of the co ordinate bench, as referred to above, we uphold the decision of the learned Commissioner (Appeals) in allowing assessee s claim of deduction under section 10B. Grounds no.1 and 2, are, therefore, dismissed. . 7. Grounds no.3 to 5, are on the common i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are located not only in SEZ but also in the following areas: *Free Trade Zone (FTZ) Electronic Hardware Technology Park (EHTP) Software Technology Par (STP) Export Oriented Units (EOUs) By Special Economic Zone Act, 2005 w.e.f 10.2.2006, a new section 10AA has been inserted which provide exemption to the units located in SEZ. Section 2 of SEZ Act, defines SEZ as under: . (za)Special Economic Zone means each Special Economic Zone notified under the proviso to sub-section (4) of section 3 and sub-section(1) of section 4(including Free Trade and Warehousing Zone) and includes an existing Special Economic Zone 21. It is evident from above that an existing SEZ unit will also be governed by Special Economic Zones Act, 2005. Therefore, we are of the considered view that the benefits which are to be provided to the newly established unit in SEZ as per section 10AA of the Act will also be available to the existing units in SEZ. Moreover, section 4(1) of SEZ Act provides that an existing SEZ unit shall be deemed to have been notified and established in accordance with provisions of SEZ Act and the provisions of Special Economic Zones ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2008-09. Therefore, we reverse the orders of authorities below by holding that income relating to SEZ unit at Mumbai is to be excluded while computing book profit u/s.115JB of the Act for assessment year 2008-09. Hence, Ground No.4 of appeal taken by the assessee for assessment year 2008-09 is allowed. The aforesaid view expressed by the Bench was subsequently followed in the following decisions: I) Dinurje Jewellery Pvt. Ltd. v/s Income Tax Officer, ITA no.5875/Mum./2013, order dated 8th August 2014; II) G. Jewelcraft Ltd. v/s ITO, [2015] 68 SOT 1229 (Mum.) (URO). Respectfully following the consistent view of the Tribunal, as referred to above, we uphold the order of the learned Commissioner (Appeals) by dismissing the ground raised by the Department. 11. Grounds no.6 and 7 relate to deletion of addition of deemed dividend of ₹ 4,93,765, made by the Assessing Officer under section 2(22)(e). . 12. Briefly stated the facts are, in the course of assessment proceedings, the Assessing Officer verifying the balance sheet of the assessee as on 31st March 2009, noted that the amount of advance received has increased from ₹ 44,90,975 to ₹ 49,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has treated the amount of ₹ 4,93,765, as deemed dividend is both the companies have some common shareholders. That, in our view, cannot be a reason for treating the amount as deemed dividend under section 2(22)(e). As . held by the learned Commissioner (Appeals) since the Assessing Officer has failed to establish that assessee is the beneficial shareholder or even a shareholder, provisions of section 2(22)(e) cannot be applied. In fact, from grounds raised, as it appears, the reason for challenging the order of the learned Commissioner (Appeals) on the issue is, the Department has challenged the Special Bench decision of the Tribunal in Bhoumik Colours Pvt. Ltd. (supra), before the Hon'ble Jurisdictional High Court. However, it needs to be mentioned that Hon'ble Jurisdictional High Court has confirmed the view expressed by the Tribunal, Special Bench, while dismissing the Department s appeal in case of CIT v/s Universal Medicare Pvt. Ltd. [2010] 324 ITR 263 (Bom.). Thus, as the issue in dispute is squarely covered in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court cited supra, we do not find any reason to interfer ..... 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