ITA. No. 648/Hyd./2014, (Assessment Year: 2010-2011). Case: ACIT Vs Vision 2K +Inc. ITAT (Income Tax Appellate Tribunal)

Case NumberITA. No. 648/Hyd./2014, (Assessment Year: 2010-2011)
CounselFor Appellant: Solgy Jose T. Kottaram and For Respondents: Ravi Seshagiri Rao
JudgesB. Ramakotaiah, Member (A) and Saktijit Dey, Member (J)
IssueIncome Tax Act, 1961 - Sections 10B, 263; Industries (development And Regulation) Act, 1951 - Section 14
Judgement DateAugust 20, 2014
CourtITAT (Income Tax Appellate Tribunal)


B. Ramakotaiah, Member (A), (ITAT Hyderabad 'B' Bench)

  1. This is a revenue appeal against order of the CIT(A)-V, Hyderabad dated 23.12.2013. The issue involved in this case is about allowability of deductions u/s. 10B of the Income-Tax Act.

  2. The assessing officer while completing the assessment was of the view that approval of the Board appointed by Central Government as required u/s. 14 of the Industries (Development & Regulation) Act, 1951 is not available. It was the submission of the assessee that assessee has obtained the permission from the Director, STPI which approved the assessee's firm as 100% EOU vide letter dated 29.5.2000 which is also further extended for another 5 years and this was ratified by the Board appointed by the Central Government. The A.O. however did not agree on the reason that the ratification was not submitted and he denied the claim.

  3. Before the Ld. CIT(A), it was submitted that the assessee was granted deduction u/s. 10B of the Act in earlier years by the orders of the CIT(A) in ITA No. 320/ACIT-4(1)/CIT(A)-V/2010-11 dated 23.2.2012 and also by the ITAT in ITA No. 696/Hyd./2010 dated 21.01.2011 for the same assessment year against orders u/s. 263 of the Act. In view of the above, Ld. CIT(A) held that the assessee is eligible u/s. 10B of the Act. He also noted that claim in assessment year 2008-09 was also allowed by the predecessor CIT(A).

  4. Even though revenue has raised the grounds that CIT(A) was not correct in holding that assessee was eligible for exemption, nothing was brought on record why the deduction u/s. 10B of the Act should be disallowed, as the assessee had valid approvals from the authorities. Not only that when proceeding u/s. 263 of the Act was undertaken for assessment year 2005-06, the issue was examined by the ITAT in the above referred order and held as under:

    We have considered the rival submissions and perused the material available on record. We find that it is admitted fact that the assessee has obtained the approval from STPI, Hyderabad as 100% EOU. The CIT's finding is that the assessee is not eligible for relief under section 10B of the Act only on the ground that 100% EOU under STPI Scheme cannot be equated with...

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