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TMI Blog2017 (5) TMI 1264X X X X Extracts X X X X X X X X Extracts X X X X ..... ircle-4, Ahmedabad. 2. The Revenue has raised following grounds of appeal : 1. The Ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 90,22,677/- made on account of disallowance u/s.10A of the Act, without properly appreciating the facts of the case and the material brought on record. 2. On the facts in the circumstances of the case, the Ld.CIT(A) ought to have upheld the order of Assessing Officer. 3. It is therefore, prayed that the order of the Ld.CIT(A) may be set-a-aside and that of the order of the Assessing Officer may be restored to the above extent. 3. Brief facts of the case as culled out from records are that, assesse is a Private Limited Company engaged in the business of Computer Software Development. Income tax return, declaring income of ₹ 1,59,20,642/- was filed on 25/09/2010, after claiming deduction u/s.10A of the Act at ₹ 90,22,677/- towards profit from newly established undertakings in free trade zone. The case was selected for scrutiny assessment and necessary information were called for vide notice under section 143(2) of the Act, followed by 142(1) of the Act issued and duly served upon the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the benefit of section 10B of the Act by Ld.AO but allowed by Ld.CIT(A). Claim of assessee u/s.10B of the Act was held to be justified by the Coordinate Bench in their decision dated 04/09/2009 for A.Y. 2003-04 dated 30/10/2009 for A.Ys 2004-05 to 2006-2007 and dated 09/07/2010 for A.Y 2007-08. However from assessment year 2008-09 onwards assessee started claiming the deduction u/s.10A of the Act by Ld.AO but allowed by Ld.CIT(A) which is specifically meant for newly established undertakings in free trade zone. For A.Ys 2008-09 and 2009-10 in the proceedings before Ld.AO assessee s claim was denied, but Ld.CIT(A) deleted the disallowance and thereafter Revenue s appeal was dismissed by the Coordinate Bench vide ITA nos.711 712/Ahd/2014 dated 14/03/2017 confirming the order of Ld.CIT(A). 9. Further, in this appeal we observe that assessee has claimed deduction u/s.10A of the Act and has filed form no.56F in support of the claim. There is no dispute with regard to fulfillment of basic conditions embedded in the provisions of section 10A of the Act. It seems that Ld.AO has treated assessment year 2008-09 as the first year of the claim made u/s.10A of the Act. But from perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 -08 since then. During the first assessment year i.e.2003 - 04 the deduction was disallowed as it was held by the AO that the ratio of old plant and machinery utilised in the business was more than 20%. The appellant won in appeal before IT AT Ahmedabad and in subsequent years the claim was disallowed by AO but it was allowed by IT AT up to A. Y2007 -08. Subsequently, since the appellant was working in STP it made a claim under section 10 A for A. Y 2008 - 09 and 2009 - 10. The AO disallowed the claim by following the earlier years practice of disallowance. However, he made the disallowance of deduction under section 10 B. The appellant is in appeal before me against such disallowance. It has raised additional grounds of appeal which were duly forwarded to the AO and his comments have also been obtained. The appellant, in the additional grounds has submitted that in case the claim is not held to be admissible under section 10 A it may be allowed either under section 10 A or 10 B as allowed in earlier years up to A.Y 2007 - 08 by ITAT. It has also submitted prescribed for No. 56F for deduction under section 10 A and 56G for deduction under section 10 B, In the repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that assesses made claim u/s 10A. The claim was disallowed by the AO on the ground that in earlier years the claim under section 10 B was disallowed. The appellant, therefore, made an alternative claim under section 10 B by filing additional ground in the appeal. As has been discussed by me in the preceding paragraphs that the claim isu admissible as it was bona fide and no new facts are being brought on record. Further there are several judicial pronouncements which hold that the report of the Chartered Accountant can be filed even during the course of assessment proceedings. Therefore, the objection raised by the AO is not acceptable. The AO has also objected to the allowance of claim under section 10A on the ground that in form number 56F the appellant has mentioned that it was the eighth year of claim of deduction where as it was for the first year, the deduction was the claimed under section 10 A. The claim of the AO is not acceptable as it is not the first year of claim of deduction by the appellant. The appellant has been claiming deduction under section 10 B in the earlier years which was allowed by the orders of ITAT. The conditions which are to be seen before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whereas it was entitled.lor deduction under section 10 A. The Honourable Court held that if the assessee was entitled for deduction in a particular section it cannot be allowed the deduction under the other section. However, while deciding the MA arising out of the order in the case of Regency Creations (supra ) the honourable Delhi High Court in IT A No. 439 /2012 in the case of Valiant Communications Limited has held that that the alternative claim under section 10 A should be examined on merits if assessee was not held entitled to the benefits of sec. 10B of the Act but to a right claim under section 10 A therefore, there is no reason the claim should be allowed. The only objection can be that the appellant would not get the deduction for further 10 years from the year of first claim. The appellant has itself shown in the relevant form that it was the eighth year of claim and accordingly the intention of the appellant is not to claim the deduction for further 10 years. Even otherwise the appellant would not be entitled for deduction for 10 years as it has already made the claim under section 10B for initial eight years. The appellant on the other hand has placed reliance ..... 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