Case Law Details
ACIT Vs Bytescale Technologies Private Limited (ITAT Mumbai)
ITAT Mumbai held that activities of import of goods for re-export (i.e. trading activities) falls within the meaning of service defined u/s 2(z) of SEZ Act and accordingly the profits and gains derived from such services rendered from SEZ would be eligible for deduction u/s. 10AA of the Income Tax Act.
Facts- The assessee company is engaged in import and re-export of goods. The assessee is carrying out its trading activities from SEZ for Free Trade and Warehousing Zone (FTWZ). The assessee claimed deduction u/s. 10AA of the Income Tax Act in respect of profit and gains derived from export/services carried out from specified SEZ Unit.
AO disallowed assessee’s claim of deduction u/s. 10AA of the Income Tax Act on the ground that the assessee is not involved in the business of manufacturing or producing any article or thing nor the assessee is providing any services. Thus, the AO held that the activities carried out are not commensurate to the provisions of section 10AA and disallowed assessee’s claim of deduction amounting to Rs.1,92,72,332/.
The CIT(A) allowed the benefit of deduction u/s. 10AA of the Act to the assessee holding that the activity of trading i.e. import and re-export of the imported goods falls within the meaning of the term “services” as defined u/s. 2(z) of the Special Economic Zone Act, 2005. Being aggrieved, revenue has preferred the present appeal.
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