9911796707
TMI Blog2010 (3) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, 1961. Since common issue is involved in these appeals, they are heard together and disposed of by this consolidated order: 3. The facts in brief are as follows : 3.1 The assessee is a private limited company. It was incorporated on 17.12.2003. It is engaged in the business of rendering software development services. The assessee entered into an agreement with its parent company on 20.10.2003 for providing software development services. The first invoice was raised by the assessee on 29.12.2003. The assessee secured the STPI registration For the A.Y. 2005-06, the assessee claimed deduction under section 10A of the Income Tax Act, 1961. The assessee had enclosed Form 56F along with the return of income in support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been newly set up. Thus the total income for A.Y. 2005-06 was assessed at ₹ 37,57,030. Interest under section 234B was levied at ₹ 4,12,440 and total amount of tax payable has been determined at ₹ 17,84,963. 3.2 Similarly for A.Y. 2006-07, the assessee's claim for deduction under section 10A was rejected by the A.O. vide his order passed under section 143(3) dt.26.12.2008. The reason stated for rejecting the assessee's claim u/s.10A is identical for both the Assessment Years 2005-06 2006-07. 3.3 On appeal, the assessee contended before the CIT(A) that it had complied with all the conditions for being eligible for deduction under section 10A of the Act. It was further submitted when an existing unit gets c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s case. The learned CIT(A) has not taken into account the fact that plant and machinery previously used by the Non-STP unit aggregating to ₹ 2,80,154 have been transferred to the STP unit which is more than 20% of the total plant and machinery of STP unit, thereby not fulfilling the conditions laid down in section 10A(2)(iii) of the IT Act. The CIT(A) erred in relying upon Board's Circular No.1 of 2005 dealing with benefits granted to unit's under section 10B while directing the Assessing Officer to allow the deduction claimed under section 10A of the IT Act,1961. 4. The learned Departmental Representative stated that the order of Tribunal in the case of M/s. Foresee Information System (P) Ltd. (supra) has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nversion of the firm and it started production in STP unit after getting approval. Thereafter only the undertaking claimed exemption under section 10A of the IT Act. The claim of the assessee is supported by Board Circular No.1/2005, where it has been clearly held that undertaking set up in Domestic Tariff Area (DTA), which is subsequently approved as 100% export oriented, is entitled to relief under section 10B of the IT Act provided the undertaking shall get relief only for the remaining period of ten consecutive years beginning with assessment year in which the undertaking begins to manufacture computer software as a DTA Unit. Respectfully following the judgment of the Punjab Haryana High Court in the case of Mahavir Spinning Mills ..... X X X X Extracts X X X X X X X X Extracts X X X X
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