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TMI Blog2020 (8) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... nder or any other corresponding law for the time being in force. There is nothing on record to show that the convertible foreign exchange remittance did not fall within the definition as defined in Section 10B(9A)(ii). This Court, the decision in the case of Electronic Control and Discharge System Private Ltd. [ 2011 (7) TMI 541 - KERALA HIGH COURT] does not render any assistance to the case of the revenue. Furthermore, on facts we are satisfied that the only activity of the assessee is export as admitted by the revenue and the income generated by the Export Unit would be eligible for the benefit of Section 10B of the Act. For all the above reasons, we find no ground to disturb the finding of the Tribunal. - Decided against revenue. - Tax Case Appeal Nos.278 and 279 of 2018 - - - Dated:- 23-7-2020 - HONOURABLE MR. JUSTICE T.S. SIVAGNANAM AND HONOURABLE MRS. JUSTICE V. BHAVANI SUBBAROYAN For Appellant : M/s. R. Hemalatha Senior Standing Counsel For Respondent : Mr. G. Baskar Common Judgment was delivered by T.S. Sivagnanam,J We have elaborately heard M/s.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant/revenue and Mr.G.Baskar, learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case was reopened by issuing notice under Section 148 of the Act dated 06.01.2014. Notice under Section 143(2) of the Act was issued and the reasons for reopening were also furnished to the assessee. The Assessing Officer proposed to deny the claim of deduction under Section 10B of the Act. Objection was filed by the assessee which was disposed of by order dated 09.02.2015. Subsequently, a show cause notice was issued calling upon the assessee to explain as to why the other income should not be excluded from the business income, then it would result in loss and therefore, the assessee was not eligible to claim deduction under Section 10B of the Act. The assessee's explanation was that they are 100% EOU and eligible undertaking engaged in the export of valves and earned management fee in the nature of export services which is incidental to business of export of valves; the management fee partake the character of profit and gain from business. The Assessing Officer did not accept the reply on the ground that initially the assessee stated that the management fee was in the nature of rendering technical services and subsequently while filing the revised return, they have state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent stand the Assessing Officer examines Form 3CEB, more particularly, the information provided in column No.10 under the heading particulars in respect of providing services . The information furnished is that they provide management service to the AE at UK, the amount paid is INR 56,52,503/- and the method used for determining the Arms Length price is TNMM. On perusal of this Form, the Assessing Officer holds that the assessee has earned the service income only from its AE and that is for providing management service and not for technical service or service incidental to the business of export of valves. Further, the Assessing Officer holds that the AE has its own expertise and therefore the service rendered by the assessee cannot be termed as technical service. With the above finding, the case of the assessee stood rejected. 7. The CIT(A) confirmed the order and agreed to whatever recorded by the Assessing Officer and also pointed out that the management fee has been received in Indian rupees as could be seen from Form No.3CEB. The CIT(A) further holds that the Assessing Officer was right in holding that the receipts are income from other sources but not business income as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Camiceria Apparels India (P) Ltd., vs. Assistant Commissioner of Income Tax [(2019) 103 taxmann.com 238 (Madras)]. The assessee therein was 100% Export Oriented Unit and during the relevant year, the assessee claimed exemption under Section 10A of the Act in respect of the income arising out of manufacturing and export of garments. After noting the decisions cited, it was held that the basis of computation of the deductions enumerated under Chapter VI A is different from that set out for special deductions like Sections 10A and 10B. Section 80IA provides for a deduction of profits and gains derived by an undertaking or an enterprise from an eligible business. The provisions of Section 80IA(1) states that where the gross total income of an assessee includes profits and gains derived from an undertaking or an enterprise from any eligible business, there shall, in accordance with and subject to the provisions be allowed, in computing the total income of the assessee, a deduction an equivalent amount to 100% of the profits and gains derived from such business for a demarcated period. It was further held that the relief under Section 10A on the other hand is granted in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Menon Impex (supra), the legal distinction argued before use and noted above has eviently not been placed for consideration before that Bench which decides the matter against the assessee following the judgment of the Supreme Court in the case of CIT vs. Sterlings Foods [1999] 104 Taxman 204/237 ITR 579 , that has been rendered in the context of Section 80I of the Act. 23. As far as the decision of this Court in India Comnet (supra) is concerned, the matter travelled in appeal to the Supreme Court which has, in its judgment Indian Comnet (supra) remanded the matter to the Income Tax Appellate Tribunal for a decision afresh after detailed examination of the transaction in question. 11. The above reasoning would be a clear answer to the contention of the revenue that the decision will not be applicable. It was further argued by the revenue that the assessee has received the funds in Indian currency and therefore not eligible. This finding stems from the details furnished by the assessee in Form No.3CEB. Admittedly, the amount will be received by the assessee through banking channels by way of convertible foreign exchange which has been defined in Section 10B(9 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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