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TMI Blog2015 (9) TMI 1684X X X X Extracts X X X X X X X X Extracts X X X X ..... stries (Development Regulation) Act, 1951 approval obtained by the assessee cannot be accepted as approval under section 10B of the Act for the purpose of claiming deduction - HELD THAT:- Refering to submission of the assessee that the assessee started its business in the year 1999 as a manufacturer and exporter hydraulic cylinder and its components and since then they have been filing their return claiming exemption under section 10B of the Act and the same was allowed the Department upto the assessment year 2008-09 we do not see any reason as to why the assessee should not be allowed deduction under section 10A if it is proved that assessee is entitled for deduction under section 10A instead of section 10B of the Act. Therefore, we are of the view that in case the assessee is not entitled for deduction under section 10B of the Act, the assessee s claim shall be considered under section 10A of the Act, subject to fulfilling of the conditions therein. Therefore, we set aside the issue to the file of the Assessing Officer for de novo consideration and decide the issue refering to cases TECHNOVATE E SOLUTIONS PVT LTD [ 2013 (3) TMI 372 - DELHI HIGH COURT] and REGENCY CREATIONS LTD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer. Thus the Assessing Officer rejected the loss declared by the assessee as the books of accounts were not produced. Counsel submits that in fact various other details called for by the Assessing Officer were furnished by letter dated 30.12.2011, whatever available information were submitted before the Assessing Officer as well as fixed assets ledger account with invoices etc. Counsel for the assessee submits that Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer ignoring the fact that before the Commissioner of Income Tax (Appeals) assessee has produced CD containing books of accounts when called for by the Commissioner of Income Tax (Appeals). Counsel submits that Commissioner of Income Tax (Appeals) seriously erred in passing the order on mistaken ground when books of accounts called for were not produced before him when in fact CD containing books of accounts were furnished before him. Therefore, she submits that matter may be remitted back to the Assessing Officer for fresh adjudication. 4. Departmental Representative places reliance on the orders of lower authorities. 5. On hearing both the parties and on going through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi High Court in the case of Regency Creations Ltd. (27 Taxmann. Com 322) while denying deduction under section 10B of the Act. On appeal, Commissioner of Income Tax (Appeals) confirmed the disallowance of deduction under section 10B observing that in the proceedings before him assessee produced copy of green card dated 23.03.2010 issued by Joint Development Commissioner, Chennai giving recognition to the assessee company as 100% EOU. Since the recognition was given only with effect from 23.03.2010, Commissioner of Income Tax (Appeals) was of the view that recognition to the assessee was not available for the assessment year 2009-10, therefore he concluded that Assessing Officer has rightly rejected the claim of the assessee. 7. Counsel for the assessee submits that the assessee is regularly assessed to Income tax by the Income Tax Officer, Company Circle-I, Chennai, under PAN: AABCB1804F. The assessee is a 100% Export Oriented Unit manufacturing and exporting Hydraulic Cylinders and its components to its associated enterprises and registered themselves as such with the MEPZ Special Economic Zone, Government of India, Ministry of Commerce and Industry, Dept. of Commerce. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 10B/10A of the Act has been considered by the co-ordinate Bench of this Tribunal in the case of ACIT Vs. Vishwak Solutions P.Ltd., in ITA Nos.1935 1936/Mds/2010 and ITA Nos.67 1634/Mds/2014 dated 30th January, 2015 in the light of the decision of the Delhi High Court in the case of CIT Vs. Regency Creations Ltd. (353 ITR 326) observing as under:- 10. Brief facts are that assessee claimed exemption under section 10B of the Act during this assessment year. While completing the assessment Assessing Officer denied exemption under section 10B of the Act on the ground that assessee principally had domestic business in its DTI unit. STPI unit does not have any new computer system and other necessary equipmentsfor the purpose of carrying on software development. The Assessing Officer was of the view that the assessee used computers relating to its DTI unit situated in the building at Sarangapani Street, T.Nagar, Chennai. The Assessing Officer was of the view that additions of new computer system and regular employees were recruited for the STPI unit after STPI unit was shifted to a new building located at Habibullah Road, T.Nagar, Chennai. The Assessing Officer was of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative submits that assessee is not eligible for deduction under section 10B in view of Explanation 2(iv) to section 10B of the Act as it is not a 100% export oriented undertaking since approval by the Board appointed in this behalf by the Central Government in exercise of powers conferred by section 14 of the Industries (Development Regulation) Act, 1951 is not yet obtained. Approval under STPI Act will not make the assessee eligible for deduction under section 10B of the Act. He places reliance on the decision of the Hon ble Delhi High Court in the case of CIT Vs. Regency Creations Ltd. (79 DTR 24). 13. Counsel for the assessee places reliance on the order of the Commissioner of Income Tax (Appeals) and further referring to pages 1 to 6 of the paper book which contain application for green card, copy of green card, sample invoices and submits that STPI unit was situated in 2nd floor of Sarangapani Street, T.Nagar, Chennai and this is an independent unit and it is nothing to do with the DTI unit situated at first floor. He submits that STPI permitted the assessee to conduct its business from the second floor. He further submits that all the computers were delivered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... govern units set up as hundred percent export oriented undertaking and so approved by the Board. The Hon ble High Court held that a unit which is not approved by the Board appointed by the Central Govt. in exercise of powers conferred under section 14 of the Industries (Development and Regulation) Act, 1951 is not entitled for exemption under section 10B of the Act. The Hon ble High Court held that assessee holding approval under Software Technology Park Scheme is not entitled to exemption under section 10B of the Act. This decision squarely applies to the assessee in the absence of any approval placed on record by the assessee from the Board appointed by the Central Govt. 16. The alternative plea in the cross objection filed by the assessee is that the assessee undertaking should be considered for deduction under section 10A of the Act as it satisfies the conditions laid down under section 10A of the Act. The assessee in its submissions before the Commissioner of Income Tax (Appeals) stated that it satisfies the requirement of relief under section 10A of the Act. Commissioner of Income Tax (Appeals) extracted the submissions in his order at page 5 6 as under:- The requiremen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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