ACIT Vs Headstrong Services India Pvt Ltd (ITAT New Delhi) – The assessee on the premise that it is in the business of development and export of computer software and human resources services claimed benefit of Section 10A of the Income-Tax Act, 1961 (hereinafter referred to as “Act”), in the assessment year 2001-02. The Assessing Officer disallowed the said benefit invoking the provisions of sub Section (7) of Section 10A of the Act on the ground that in the previous assessment year i.e. 2000-01 the assessee had opted for not claiming the deduction under this provision.
The CIT(A), however, allowed the said benefit and ITAT has confirmed the same. The Tribunal has, in its consolidated order in respect of all these three years, has relied upon the decision in the case of Legato Systems India (P) Ltd. Vs. ITO 93 TTJ 828 holding that the declaration as required to be made under Section 10A of the Act is only for the year in which the assessee does not desire application of provision of Section 10A of the Act. The Tribunal also recorded a finding of fact that in the year under consideration the assessee had not made any such declaration and, therefore, the reason given by the Assessing Officer for denying exemption was permissible. Under Section 10A of the Act, tax holiday period of ten years is granted and once the option is exercised by an assessee who fulfils the conditions laid down therein, for successive ten years, the benefit of Section 10A is to be given to the assessee.
Honorable ITAT held that The assessee company is registered as a 100% Export Oriented Unit (EOU) for manufacture and export of computer software for export purposes. The assessee being eligible for 100% tax holiday u/s 10A of the Income Tax Act, 1961, has exercised this option not to claim this exemption for this year in accordance with provision of sub Section 7 to Section 10A of the Act. It is thus clear from the above that it cannot be said that the assessee had opted not to take the benefit of Section 10A of the Act. On the contrary, it was specifically mentioned that the assessee was eligible for 100% tax holidays period under Section 10A of the Act but in the year in question since there were losses, the assessee was not claiming the exemption in that particular year. Moreover, as pointed out above, when the assessee has been given this benefit in some of the years of the same tax holiday period, there is no reason to deny the assessee benefit in these three assessment years. We, thus, are of the opinion that no question of law in this behalf in the instant case.
Asstt. Commissioner of Income-tax, Vs. M/s. Headstrong Services India Pvt. Ltd. (Formerly known as Techspan India Pvt. Ltd.)
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `C’: NEW DELHI
I.T. A. No. 519/Del/2011
Assessment Year : 2005-06
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH `C’: NEW DELHI
I.T. A. No. 519/Del/2011
Assessment Year : 2005-06
Paid content
Become a Basic or Premium Member, or log in if you are already a Basic or Premium member.
Join TaxGuru's Network for the latest updates on Income Tax, GST, Company Law, Corporate Laws and other related subjects.
Related Articles in Income Tax
Corporate Guarantees in Transfer Pricing: Courts Draw Line Between Shareholder Support and Services
September 1, 2026
Rolex Rings’ ₹5.40 Crore Accommodation-Entry Addition Deleted: ITAT Rajkot
August 31, 2026
ITAT Strikes Down Section 263 Revision Against Mukul Rohatgi After PCIT Promotion
August 31, 2026
ITAT Jodhpur Allows 80G Approval Where Religious Spending Remains Below 5%
August 31, 2026ITR Filing Deadline: Six Checks Before 31 August 2026 for AY 2026-27
August 31, 2026
