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TMI Blog2017 (8) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... r dated 10th December 2008, the letter of the Director, STPI, intimating formation of Unit II so also another letter to Director, STPI, seeking permission for bonding facility for Unit II and approval from Director, STPI for Unit II, the letter to the Director, STPI, intimating formation of Unit III, letter to Director, STPI, seeking permission for bonding facility for Unit III and approval from Director, STPI for Unit III. After considering all the documentary evidence and the remand report of the Assessing Officer, the Tribunal agreed with the remand report of the Assessing Officer and held that the assessee would be entitled for benefit of Section 10A of the Act. Tribunal has not committed any error while passing the impugned order. - De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... PI Authorities has stated that these units are expansion and not distinct undertakings ? 7.2 Whether on the facts and in the circumstances and in law, the perversity has crept into the order of the Hon'ble ITAT by ignoring and not appreciating the evidence in the form of assessee's own declaration and admission in application to STPI to the effect that works under reference constituted expansion of existing units and not a new and distinct undertaking or unit ? 4 Mr.Pinto, the learned counsel for the appellant, strenuously contends that the assessee itself had represented vide its letter to the STPI that Unit II and Unit III are in the nature of expansion of business. As such, the assessee cannot now turn around and conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed counsel, the provisions of Section 10A(2) would apply only if the undertaking is not formed by splitting up or reconstruction of the business already in existence. In the present matter, as it was not a new undertaking, the assessee would not be entitled for the benefit of subsection (2) of Section 10A of the Act. 6 The learned counsel for the respondent supports the order and submits that the Commissioner (Appeals) had called for the remand report from the Assessing Officer. The said remand report clearly shows that Unit II and Unit III of the assessee were independent and a new business. According to the learned counsel, various factors on record could clearly demonstrate the independent nature of business of Unit II and Unit III. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bate that vide letter dated 19th July 2000 the assessee sought permission to start Unit II at Bangalore for carrying out business of processing insurance claims and vide letter dated 26th July 2000 the STPI authorities at Bangalore granted the said permission to start a BPO for claim processing. On or about 12th September 2001, permission was granted to Unit III to do the business of international call center. It was observed by the Tribunal that on 28th October 2003, the assessee has taken a separate registration with STPI, Mumbai, for BPO call processing activity at Bangalore for the purpose of back end data backup. 10 The Assessing Officer in his remand report has held that both Unit II and Unit III duly fulfill all the conditions lai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate books of accounts were maintained. The employees of each of the units were fresh set of employees and were not transferred from existing business. The nature of activity of both units is totally different, not only vis-a-vis each other, but also vis-a-vis the activity carried on by the first unit. It was also observed by the Assessing Officer in its remand report that customers of each unit are completely different and unrelated and both the units have new and independent sources of income. While Unit I is engaged in the business of software development, Unit II is engaged in non-voice BPO business (Insurance claim processing) and Unit III is engaged in voice BPO (Call center). While Unit I earns revenue predominantly from within I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by Patni Computers Systems Ltd. for expansion and benefit under Section 10A was accorded. The said order is upheld by this court in appeal. 15 In case of Textile Machinery Corporation Ltd. referred to supra, the Apex Court was considering the provisions of Section 15(C) of the Act as it stood then, dealing with similar provisions. The Apex Court in the said case observed that the true test is not whether the new industrial undertaking connotes expansion of the existing business of the assessee but whether it is all the same a new and identifiable undertaking, separate and distinct from the existing business. No particular decision in one case can lay down an inexorable test to determine whether a given case comes under Section 15C or not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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