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TMI Blog2017 (11) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... The view taken by the Tribunal is required to be confirmed. The issue is answered in favour of assessee - D. B. Income Tax Appeal No. 314 / 2011 - - - Dated:- 11-9-2017 - K. S. Jhaveri And Vijay Kumar Vyas, JJ. For the Appellant : Mr. R.B. Mathur For the Respondent : Mr. Mahendra Gargieya JUDGMENT 1. By way of this appeal, the Department has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal preferred by the Department. 2. While admitting the matter on 10.04.2013, the court has framed the following question of law:- Whether in the facts and circumstances of the case that ITAT was justified in law in allowing the benefit of deduction u/s. 10B even to the acquired unit of M/S. Anjali Exports despite of the facts the same was not having certificate of Export Oriented Unit which was mandatory requirement 3. The facts of the case are that the assessee is a partnership concern and was established in the year 2000. The assessee was claiming deduction u/s 10B of 100% of EOU. The firm earlier was known as M/s. V.K. Exports. On 30.12.2006, reconstitution of business was made and new partner has introduced Old ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken by Sh. Shah quite carefully. Basic facts of the case regarding reconstitution of the firm, introduction of the new partners, retirement of the partner, change of name of the firm as M/s Veto Electro Powers (formally known as M/s V.K. Exports), acquisition of undertaking namely M/s Anjali Exports and 100% EOU unit w.e.f 1.4.2006 by the MOU dt.15.1.2007 and conversion of M/s Veto Electro Powers into a Pvt.Ltd.Co. w.e.f. 20.3.2007 as M/s Veto Electro Powers (india) Pvt.Ltd. are already reproduced in earlier part of this appellate order and therefore, it is not considered necessary to reproduce them again. On factual appreciation of development of the events it is undisputedly clear that M/s V.K. Exports after reconstitution of the firm had changed its name to Veto Electro Powers w.e.f 6.12.2006 and thereafter, by a MOU dt.15.1.2007 M/s Veto Electro Powers acquired the export oriented undertaking from a partnership firm namely M/s Anjali Exports. Such industrial undertaking was a 100% EOU unit set up by M/s Anjali Exports on 2.1.2002 at F-6, Malviya nagar Ind. Area, Jaipur which has commenced manufacturing operation on 18.7.2004 which was claiming exemption /deduction in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginal certificate issued to M/s V.K. Exports whose name has been changed as M/s Veto Electro Powers which is the case of present appellant firm. It is clear that this is not a case of new concern coming into existence but the manufacturing and export activity being run in 100% EOU by M/s V.K. Exports and M/s Anjali Exports was continuing as such. Further from the perusal of copy of P L A/c and Balance Sheet of M/s Veto Electro Powers (formally V.K. Exports) as on 19.3.2007 and for the period from 1.4.2006 to 19.3.2007 it is clear that separate figures of various accounts namely Income Expenditure for Anjali Exports and veto Electro Powers were given alongwith consolidated figure of the audited accounts and therefore, the officer is assessing factually incorrect in his finding that there were no separate books of accounts and separate audit of M/s Anjali Exports and M/s Veto Electro Powers. In fact, with such separate audited figures only the assessing officer could come to know about the exemption claimed u/s 10B pertaining to 100% EOU of M/s Anjali Export which was disallowed at ₹ 8,25,38,959/-. The assessing officer is also not correct in his observation that M/s Anjali E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e merged as per provisions of clause 6.34(10) of the said policy. Further, the observation of assessing officer regarding provisions of S.10B (7A) for denying the deduction exemption on the ground that as per this provision the benefit is available to only Indian Companies and not to other entity is far from correct. The said sub section only prohibits the companies other than Indian companies but the AO has conveniently ignored the provisions of sub Section 9 and 9A of 10B which were omitted w.e.f. 1.4.2004 by Finance Act,2003 and with such omission it makes prominently clear that there is no such ban now on the availability of such deductions in case of the firms. Rather in the explanatory memorandum it is clear that sub section 9 and 9A become redundant so that the tax benefit is not lost on the change of ownership of the eligible undertaking. With this discussion and analysis of facts and evidence in my considered view the assessing officer was not justified in disallowing the deduction / exemption claimed u/s 10B of I.T. Act in respect of 100% EOU of M/s Anjali Exports at ₹ 8,25,38,959/- and AO is thereby directed to allow the same. 5. He also pointed out the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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