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TMI Blog2018 (12) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.2007, the assessee M/s.Trident Minerals 100% EOU formed a partnership firm and on 15.11.2007, approval was granted by SEZ as 100% Export Oriented Unit. In the assessment year 2008-2009, they commenced production and manufacture. In the assessment year, 2009-2010, export takes place for the first time after merger. On 01.09.2006, M/s.KMNI Exports 100% EOU carrying on same business of manufacture, production and export of iron ore formed under a partnership firm. On 03.11.2006, 100% EOU approval was granted by SEZ. In the assessment year 2007-2008, it commenced production, manufacture and export of iron ore and in the assessment year 2008-2009, export of iron ore and claim of deduction under Section 10B of the Income Tax Act was allowed for the first year. On 02.05.2008, M/s.KMMI Exports merged with M/s.Trident Minerals 100% EOU. On 22.09.2009, return of income was filed under Section 139 (1) of the Act and deduction under Section 10B of the Act was claimed in respect of export income. The Assessing Officer after considering the entire material on record, by an order dated 26.12.2011 held that deduction under Section 10B of the Act was not allowable on the ground that two partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l, allowing the deduction under Section 10B of the Act and remanding the matter for re-consideration and the assessee's cross appeal was remanded which is not challenged here. Therefore, no substantial question of law arises for consideration in this case. Hence, he sought to dismiss the appeal. 7. In support of his contentions, learned Senior Counsel relied upon the following: (i) CBDT Circular No.1/2013 dated 17.01.2013, (ii) The dictum of the division bench of the Hon'ble Allahabad High Court in the case of MKU (Armours) (P.) Ltd. v. CIT[2015] 376 ITR 504 (All.) pertaining to the assessment years 2007-2008, 2008-2009 and 2009-2010 under Section 10B of the Act, (iii) In the case of CIT v. Renuga Textiles Mills Ltd.[2014] 254 CTR 0423 pertaining to the assessment year 1994-1995 with regard to exemption under Section 10B of the Act. 8. Having heard the learned counsel for the parties, it is not in dispute that the assessee firm was formed by a Partnership Deed dated 05.10.2007 to carry on the production and trading/export of iron ore. For the assessment year 2009-2010, the assessee e-filed its return of income on 22.09.2009 declaring income of Rs. 1,31,23,150/-. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee firm, whether the assessee firm is entitled for deduction under Section 10B of the Act. Earlier, there was sub section 9 to Section 10B of the Act, which specifically provided that the deduction cannot be allowed, if there was a transfer of ownership or beneficial interest in the undertaking. The sub Section 9A of Section 10B of the Act was introduced can be allowed, if a firm is succeeded by a company. This sub Section was also omitted with effect from 01.04.2004. In this view of the matter, the inevitable and appropriate conclusion is that the limitations specified in sub-sections 9 and 9A of Section 10B of the Act do not exist from 1.4.2004 and therefore, the conclusion of the assessing officer that deduction under section 10B of the Act cannot be granted on the merger of firms is not correct. 10. The Tribunal after recording a finding that in view of the CBDT Circular No. 1 of 2013, dated 17.01.2013, it is clear that deduction is granted to the undertaking. Therefore, it follows as long as the undertakings remain eligible for deduction under Section 10B of the Act, the deduction cannot be denied merely on the ground that there has been a merger of the firms which own the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) at para 21 held as under: "Suffice it to say that the view of the Tribunal is wholly misconceived. It may be mentioned that in terms of the agreement dated 19.03.2007, effective from 1.4.2007, the entire industrial undertaking, lock stock and barrel had been taken over by MKU Private Ltd. with due approval of the competent authority as designated under Industries (Development) Regulation Act 1953 and Excise Authorities. The premises of MKU (Private) Ltd., the successor had duly been approved, licenses were surrendered by the formed in favour of the later. The name of implementing agency i.e. MKU Private Ltd. was substituted in place of MKU (Armours) Private Ltd., by the authorities. Therefore, it was not a case where part of the machines had been transferred from MKU (Armours) Private Ltd. to MKU Private Ltd. The provisions contained in sub-section(7A) as have been inserted w.e.f. 1.4.2004, with simultaneous abolition of sub-section (9) and (9A) of section 10B, provides for continuance of benefit in favour of the successor unit, for the unexpired period." 14. The similar question was also arise before the Division Bench of Madras High Court in the case of Renuga Textiles Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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