Section 10B

Exemption Under Special Provisions – Sections 10A/10AA/10B

Income Tax - Article discusses Exemption Under Special Provisions of Sections 10A, Section 10AA and Section 10B of Income Tax Act, 1961. A. Section 10A- Special provision in respect of newly established undertakings in free trade zone, etc. The benefit in respect of newly established Industrial Undertaking in FTZ, EHTP SEZ or STP is Available to all A...

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S. 10A / 10B Restriction on transfer of technical manpower under Circular Nos.14 and 12 of 2014

Income Tax - The Central Board of Direct Taxes (CBDT) had issued a Circular No.12 of 2014, dt.18.7.2014, by way of clarification regarding allowability of deduction under section 10A / 10AA, on transfer of technical man-power in the case of software industry [366 ITR (St) 1 : 106 DTR (St) 28]. Vide paragraph (4) of the aforesaid Circular No.12 / 2014,...

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All about carry forward & set off business loss & unabsorbed depreciation by undertaking governed by section 10A or 10B

Income Tax - As per the provisions of Section 10A(6) or 10B (6) of the Income-tax Act, 1961, before their amendment, vide Finance Act, 2003, the undertakings were not permitted to carry forward their business losses and unabsorbed depreciation for set-off against the profits and gains of an assessment year (AY) immediately succeeding the last of the r...

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Income & Wealth Tax Issues in SEZ assessment

Income Tax - 1. No time limit for realisation of exports proceeds The intent of enactment of sections 10A/10B/10BA/10AA in the Income Tax Act, 1961 is to encourage exports which in turn would infuse the economy with foreign currency remittances. Timely ‘foreign currency remittances’ into India is the underlying intent spelt out in section 10A, sec...

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I-T Dept releases Book on Controversies in Income Tax Assessment

Income Tax - The genesis of this book is an exercise carried out to compile best quality assessment orders passed in each Chief C.I.T region of Gujarat during the Financial Year 2011-12. On analyzing these orders it emerged that majority of additions were relatable to issues pertaining to 19 topics. Therefore it was decided to constitute  an expert [...

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Foreign Trade Policy 2009-14 – IT exemption U/s.10(A) & 10(B) extended till March 2011

Income Tax - Announcing the foreign trade policy 2009-14 here on Thursday, Mr Anand Sharma, Union Commerce Minister said, the Government wanted to provide a stable policy environment conducive for foreign trade and accordingly, it has been decided to continue with the DEPB (Duty Entitlement Pass Book Scheme) up to December 2010 and income-tax benefits...

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Section 10A/10B deduction eligible on ‘deemed export’ to other STP unit

Preludesys India Ltd. Vs. ACIT (Madras High Court) - Preludesys India Ltd. Vs. ACIT (Madras High Court) The first aspect that has to be considered is as to whether the Income Tax Act, 1961 deals with the concept of a ‘deemed export’. This position has been clearly explained by the High Court of Karnataka both in the case of Tata Elxsi Ltd., and in...

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Interest on Bank deposits eligible for Section 10A or 10B deduction: HC

CIT Vs. Sankhya Technologies Pvt Ltd. (Madras High Court) - CIT Vs. Sankhya Technologies Pvt Ltd. (Madras High Court) It has been brought to the notice of this Court that there is a judgment of the Full Bench of the Karnataka High Court, to which one of us (Dr.Vineet Kothari, J.) was a party, in which the Full Bench has held that the interest on […]...

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Assessee can claim section 10A exemption on section 10B exemption denial

Krythium Solutions Private Limited, Vs ACIT (ITAT Cochin) - Krythium Solutions Private Limited Vs ACIT (ITAT Cochin) The issue under consideration is whether claiming deduction u/s 10A of the Income Tax Act through filing revised return is justified in law? ITAT states that the CBDT Circular No.14 (XL-35) dated 11.04.1955 has clarified that the revenue shall...

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Section 10A/10B deductions should be made from Gross Total Income instead of Total Income

Comstar Automative Technologies Vs DCIT (Madras High Court) - Deductions either under Section 10A or 10B would be made while computing the gross total income of the eligible undertaking and not at the stage of computation of the total income....

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Deduction u/s 10B allowable based on approval from STPI despite non-ratification by Board

DCIT Vs Ms Hitech Infosoft (ITAT Ahmedabad) - Deduction under section 10B could not be denied on the ground that the approval of STPI units of the assessee was not ratified by the Board of approvals as mandated u/s 10B....

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CBDT clarification on export of computer software in relation to Sec 10A, 10AA, 10B

CBDT Instruction No 3/2014 - (14/03/2014) - A clarificatory Circular No. 01/2013 dated 17.01.2013 was issued by CBDT to address various contentious issues leading to tax disputes in cases of entities engaged in export of computer software which are availing tax-benefits under sections 10A, 10AA and 10B of the Income-tax Act, 1961....

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AO to follow clarification on export of computer software Direct tax benefits -CBDT

INSTRUCTION NO. 17/2013 - (19/11/2013) - A clarificatory Circular No. 01/2013, dated 17-1-2013 (hereinafter referred to as 'Circular') was issued by CBDT to address various contentious issues leading to tax disputes in cases of entities engaged in export of computer software which are availing tax-benefits under sections 10A, 10AA and 10B ...

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Circular on Sections 10A, 10AA, 10B and 10BA – Related to set off and carry forward of losses

Circular No. 07/DV/2013 - (16/07/2013) - Circular No. 07/DV/2013-Income Tax The two sections 10A and 10B of the Act were initially placed on statute in 1981 and 1988 respectively, and continued with some modifications and amendments till 31.03.2001. Section 10A as inserted by Finance Act, 1981 read as under: "Section 10A. Special prov...

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Clarification Regarding issues Relating to Export of Computer Software- Direct TAX Incentives

Income tax press release - (17/01/2013) - The Indian Software Industry has been the beneficiary of direct tax incentives under the provisions like sections 10A, 10AA & 10B of the Income-tax Act, 1961 in respect of their profits derived from the export of computer software. ...

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Clarifications on Issues relating to export of computer software – Deduction U/s. 10A, 10AA & 10B

Circular No. 01/2013-Income Tax - (17/01/2013) - Circular No. 01/2013-Income Tax The CBDT has issued a Circular No. 01/2013 dated 17.01.2013 in which it has provided clarifications on various issues relating to the export of computer software and the allowance of deduction under sections 10A, 10AA and 10B of the Income-tax Act, 1961. Circular ...

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Recent Posts in "Section 10B"

Section 10A/10B deduction eligible on ‘deemed export’ to other STP unit

Preludesys India Ltd. Vs. ACIT (Madras High Court)

Preludesys India Ltd. Vs. ACIT (Madras High Court) The first aspect that has to be considered is as to whether the Income Tax Act, 1961 deals with the concept of a ‘deemed export’. This position has been clearly explained by the High Court of Karnataka both in the case of Tata Elxsi Ltd., and in […]...

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Interest on Bank deposits eligible for Section 10A or 10B deduction: HC

CIT Vs. Sankhya Technologies Pvt Ltd. (Madras High Court)

CIT Vs. Sankhya Technologies Pvt Ltd. (Madras High Court) It has been brought to the notice of this Court that there is a judgment of the Full Bench of the Karnataka High Court, to which one of us (Dr.Vineet Kothari, J.) was a party, in which the Full Bench has held that the interest on […]...

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Assessee can claim section 10A exemption on section 10B exemption denial

Krythium Solutions Private Limited, Vs ACIT (ITAT Cochin)

Krythium Solutions Private Limited Vs ACIT (ITAT Cochin) The issue under consideration is whether claiming deduction u/s 10A of the Income Tax Act through filing revised return is justified in law? ITAT states that the CBDT Circular No.14 (XL-35) dated 11.04.1955 has clarified that the revenue shall not take advantage of ignorance of the ...

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Section 10A/10B deductions should be made from Gross Total Income instead of Total Income

Comstar Automative Technologies Vs DCIT (Madras High Court)

Deductions either under Section 10A or 10B would be made while computing the gross total income of the eligible undertaking and not at the stage of computation of the total income....

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Deduction u/s 10B allowable based on approval from STPI despite non-ratification by Board

DCIT Vs Ms Hitech Infosoft (ITAT Ahmedabad)

Deduction under section 10B could not be denied on the ground that the approval of STPI units of the assessee was not ratified by the Board of approvals as mandated u/s 10B....

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Treatment of interest income for deduction u/s 10B of Income Tax Act, 1961

Universal Precision Screws Vs JCIT (ITAT Delhi)

Assessee is entitled to deduction u/s 10B of the Act in respect of the interest income earned on FDRs made for the purposes of keeping margin money or for availing any other credit facility from banks....

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S. 10B STPI Commissioner approval should be construed as Board approval

Limtex Infotech Ltd. Vs ITO (ITAT Kolkata)

As per section 10B for an undertaking to be eligible as 100% Export Oriented Undertaking, it should fulfill the following conditions: i) The undertaking must have approved by the Development Commissioner ii) The approval so granted by the Development Commissioner should be subsequently ratified by the Board of Approval for Export Oriented...

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Exemption Under Special Provisions – Sections 10A/10AA/10B

Article discusses Exemption Under Special Provisions of Sections 10A, Section 10AA and Section 10B of Income Tax Act, 1961. A. Section 10A- Special provision in respect of newly established undertakings in free trade zone, etc. The benefit in respect of newly established Industrial Undertaking in FTZ, EHTP SEZ or STP is Available to all A...

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Posted Under: Income Tax |

Swarovski India Pvt. Ltd Appeal: The three golden rulings

Swarovski India Pvt. Ltd. Vs DCIT (Delhi High Court)

1. While allowing deduction under section 10B, the deduction is to be allowed to eligible undertaking, even the income being in negative. 2. Cutting and polishing of precious and semi precious stones constitutes manufacturing as contemplated in section 10B, 3. No fresh fact or fresh material which formed the reasons to believe for reop...

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Conversion of Un-garbled Pepper to garbled Pepper is not manufacture

Nishant Export Vs. Assistant Commissioner Of Income Tax (Kerala High Court)

Nishant Export Vs. ACIT (Kerala High Court) The assessee was engaged in the procurement and export of pepper. The assessee procured un-garbled pepper, which by a process got garbled; making it fit for human consumption and was exported. The assessee had been claiming allowance under Section 80HHC for its export turnover as computed under ...

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Sec 10A / 10B: Bar in section 92CA(4) not applies to suo motu TP adjustments

Approva Systems Pvt. Ltd Vs. DCIT (ITAT Pune)

Approva Systems Pvt. Ltd Vs. DCIT (ITAT Pune) Now, coming to the second claim of deduction under section 10B/10A of the Act on TP adjustment of Rs 64,07,399/-. The assessee on its own motion had offered adjustment on account of transfer pricing provision to the extent of Rs 64,07,399/-. The computation of income is placed […]...

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Assessee registered under STPI as a 100% EOU can claim deduction u/s 10B despite non approval by Board as 100% EOU

Dy. Commissioner of Income Tax Vs. M/s. Value Labs (ITAT Hyderabad)

While dismissing revenue’s appeal, the Hyderabad bench of Income Tax Appellate Tribunal (ITAT) has declared that assessee is entitled for deduction under Section 10B of the Income Tax Act 1961 even though it registered as a hundred percent Export Oriented Undertaking (EOU) under the Software Technology Park of India (STPI). ...

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Deduction U/s. 10B can be claimed on export of customized electronic data or legal database

Asst. Commissioner of Income-Tax 11(3) Vs. M/s. Majmudar & Co. (ITAT Mumbai)

Expression Computer Software is wide enough to embrace diverse activities and to eliminate any doubt the reference can be made to Customized Electronic Data as mentioned in Second Explanation to Section 10B (2) of the Act. Further, CBDT issued notification and the notification relied on in the present case uses the expressions (iii) conte...

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Rental Income incidental to business of assessee is eligible for deduction U/s. 10A

M/s. Infosys Limited Vs. Addl. Commissioner of Income Tax (ITAT Bangalore)

It was urged that the letting out of space to Infosys BPO Ltd. and BSNL at Chennai were therefore incidental to the business carried on by the assessee and therefore eligible for deduction under Section 10A of the Act....

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HC on allowability of deduction U/s. 10A / 10B on Interest Income

CIT Vs. Hewlett Packard Global Soft Ltd (Karnataka High Court)

CIT Vs. Hewlett Packard Global Soft Ltd (Karnataka High Court) (Full Bench) HC held that assessee was entitled to 100% exemption or deduction under Section 10-A of the Act in respect of the interest income earned by it on the deposits made by it with the Banks in the ordinary course of its business and […]...

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Exemption U/s. 10A / 10B can be claimed on incidental income from export of goods

CIT Vs. Hewlett Packard Global Soft Ltd (Karnataka High Court)

Profits of the business of the Undertaking for the purposes of Section 10-A/ 10-B includes the Profits and Gains from export of the articles as well as all other incidental incomes...

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Tribunal bound to consider alternative claim to grant benefit U/s. 10A when Appellant was denied exemption u/s. 10B

CIT Vs. Ms Flytxt Technology P. Ltd. (Kerala High Court)

CIT Vs. Ms Flytxt Technology P. Ltd. (Kerala High Court) Admittedly, the assessee initially claimed the benefit of Section 10B which was allowed by the Assessing Officer. Only when the Commissioner was seized of the proceedings under Section 263, the assessee raised an alternative claim for the benefit of Section 10A. The Commissioner did...

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S. 10A / 10B Restriction on transfer of technical manpower under Circular Nos.14 and 12 of 2014

The Central Board of Direct Taxes (CBDT) had issued a Circular No.12 of 2014, dt.18.7.2014, by way of clarification regarding allowability of deduction under section 10A / 10AA, on transfer of technical man-power in the case of software industry [366 ITR (St) 1 : 106 DTR (St) 28]. Vide paragraph (4) of the aforesaid Circular No.12 / 2014,...

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Posted Under: Income Tax |

All about carry forward & set off business loss & unabsorbed depreciation by undertaking governed by section 10A or 10B

As per the provisions of Section 10A(6) or 10B (6) of the Income-tax Act, 1961, before their amendment, vide Finance Act, 2003, the undertakings were not permitted to carry forward their business losses and unabsorbed depreciation for set-off against the profits and gains of an assessment year (AY) immediately succeeding the last of the r...

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Posted Under: Income Tax |

It is not the ‘profit from export’ but ‘profit of business’ which is to be considered in formula u/s 10B(4)

Riviera Home Furnishing Vs Addl. Commissioner of Income Tax (Delhi High Court)

In Riviera Home Furnishing vs. Addl. CIT, Hon’ble Delhi High Court while dealing with the interpretation of Section 10B(4) held that the manner of determining such eligible profits has been statutorily defined in sub-section (4) of section 10B of the Act....

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DEPB benefits eligible for deduction under Section 10B

ACIT Vs M/s QH Talbros Ltd. (ITAT Delhi)

The present appeals filed by the Revenue are directed against the orders of CIT(A), Faridabad, dated 27.12.2011 and 20.12.2012 passed for the assessment years 2007-08 and 2008-09 respectively. The Revenue raised the following grounds of appeal in ITA No. 1321/Del/2012...

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S. 10B Approval received from STPL is proper approval for claiming deduction

Quality BPO Services Pvt Ltd, Vs ACIT (OSD) (ITAT Ahmedabad)

Quality BPO Services Pvt Ltd, Vs ACIT (OSD) (ITAT Ahmedabad)- The issue under appeal relates to examination of the claim of assessee under section 10B of the Act at Rs.67,08,733/- which hitherto has been disallowed by the Assessing Officer and further sustained ...

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Sec. 10B Interest on FDRs on margin kept in bank for utilization of letter of credit limits is business Income

Principal CIT Vs Universal Precision Screws (Delhi High Court)

Delhi High Court held In the case of Principal CIT vs. Universal Precision Screws that interest on fixed deposits has the requisite characteristic of business income and has a nexus to the business activities of the Assessee....

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Section 10B Foreign exchange fluctuation includible in export turnover: HC

The Commissioner of Income Tax Vs M/s. Pentasoft Technologies Ltd. (Madras High Court at Judicature)

CIT vs. M/s. Pentasoft Technologies Ltd. (Madras High Court)- In order to allow a claim under Section 10A of the Act, what all is to be seen is whether such benefit earned by the assessee was derived by virtue of export made by the assessee....

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S. 254 Tribunal can consider the plea not raised before CIT (A)

Fast Booking (I) Pvt. Ltd. Vs DCIT (Delhi High Court)

Delhi High Court has held In the case of Fast Booking (I) Pvt. Ltd. Vs. DCIT that Under Section 254 Tribunal has inherent power to entertain alternative plea of which was not urged before CIT(A). High Court Directed the Tribunal to consider the Plea of the Assessee that in case he is denied benefit ...

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Assessee & Revenue have right to File cross objection before ITAT

Fast Booking (I) Pvt. Ltd. Vs Dy. Commissioner Of Income Tax (Delhi High Court)

The Delhi High Court Has Held In the case of Fast Booking (I) Pvt. Ltd. Vs Dy. Commissioner Of Income Tax that both the assessee as well as the department have a right to file an appeal/cross-objections before the Tribunal. ...

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Exemption cannot be denied merely for claim under wrong section

M/s. Annam Software Pvt. Ltd. Vs Commissioner of Income-Tax (ITAT Chennai)

Annam Software Pvt. Ltd. vs. CIT (ITAT Chennai) Assesse, an EOU, filed its return claiming exemption u/s 10 B. A.O. rejected assesse’s claim. In appellate proceedings , assesse raised a plea that in relevant year it had claimed deduction u/s 10 A...

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Forex gains are eligible for deduction u/s 10B

Yodeva Plastics Pvt. Ltd. Vs DCIT (ITAT Hyderabad)

In the present case the Hon’ble Tribunal held that the Forex gains or losses after the sale receipts would be treated as an amount which will be eligible for deduction under section 10B. On the second issue...

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Losses incurred by eligible units u/s 10B not allowed to be set off against income of other units

CIT Vs KEI Industries Ltd. (Delhi High Court)

It was held that the eligible profits are not to be subjected to the adjustment under Section 72 of the Act, and the brought forward loss from the unit eligible for the relief under Section 10B cannot be adjusted against the profits from the other units...

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Section 10B- Compiling, editing, digital designing of software amounts to Manufacture

CIT Vs. Kiran Kapoor (Delhi High Court)

Whether assessee’s engagement in activities of collection, collation, formatting of data, editing, digital designing etc. can be termed at manufacturing to avail the benefits of section 10B of the Income-tax Act....

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Separate or disassemble parts of plant, even if assembled abroad, considering size of the plant, quality for exemption u/s 10B

CIT Vs AAR ESS Exim Pvt. Ltd. (Delhi High Court)

It would be incongruous and inappropriate in the context of Section 10B of the Act to hold that the respondent-assessee, an 100% export oriented unit, who had refurbished a mini cement plant in Zambia and established a mini steel mill in Kazakhstan...

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Customization of electronic data amounts to manufacture for claiming exemption u/s 10B

Commissioner Of Income Tax Vs Ms. Kiran Kapoor (Delhi High Court)

The assessee’s effort of collection, designing, layout, refining the photographs to make the book ready to print out is manufacturing and the same is also exported outside India so exemption u/s 10B cannot be denied....

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Deduction U/s. 10B is allowed only on “undertaking” not on “whole Business”

M/s. Unicorn Natural Products Limited Vs DCIT (ITAT Hyderabad)

The Hon’ble Tribunal observed that the company has maintained and submitted separate set of accounts. There was a confusion between the total turnover of the business and total turnover of the undertaking. The Hon’ble Tribunal held that in the proviso to section 10B, there is reference to computation of total income of Undertaking....

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All business profits of the undertaking are eligible for deduction U/s. 10B

Commissioner of Income Tax Vs Hritnik Exports Pvt Ltd. (Delhi High Court)

CIT vs. Hritnik Exports Pvt. Ltd (Delhi High Court) Sub-section (4) of section 10B stipulated that deduction under that section shall be computed by apportioning the profits of the business of the undertaking in the ratio of turnover to the total turnover....

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Income & Wealth Tax Issues in SEZ assessment

1. No time limit for realisation of exports proceeds The intent of enactment of sections 10A/10B/10BA/10AA in the Income Tax Act, 1961 is to encourage exports which in turn would infuse the economy with foreign currency remittances. Timely ‘foreign currency remittances’ into India is the underlying intent spelt out in section 10A, sec...

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CBDT clarification on export of computer software in relation to Sec 10A, 10AA, 10B

CBDT Instruction No 3/2014 (14/03/2014)

A clarificatory Circular No. 01/2013 dated 17.01.2013 was issued by CBDT to address various contentious issues leading to tax disputes in cases of entities engaged in export of computer software which are availing tax-benefits under sections 10A, 10AA and 10B of the Income-tax Act, 1961....

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AO to follow clarification on export of computer software Direct tax benefits -CBDT

INSTRUCTION NO. 17/2013 (19/11/2013)

A clarificatory Circular No. 01/2013, dated 17-1-2013 (hereinafter referred to as 'Circular') was issued by CBDT to address various contentious issues leading to tax disputes in cases of entities engaged in export of computer software which are availing tax-benefits under sections 10A, 10AA and 10B of the Income-tax Act, 1961....

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Setting, printing & binding of pages can be considered as production of book as a new article or thing for the purpose of deduction u/s 10B

Replika Press (P) Ltd Vs DCIT (Delhi High Court)

In the said case, the respondent was a publisher of books but did not have a printing press. He would procure manuscripts, hit upon a suitable format, get it printed from third parties under his supervision, get the book bound and put it out for sale....

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Circular on Sections 10A, 10AA, 10B and 10BA – Related to set off and carry forward of losses

Circular No. 07/DV/2013 (16/07/2013)

Circular No. 07/DV/2013-Income Tax The two sections 10A and 10B of the Act were initially placed on statute in 1981 and 1988 respectively, and continued with some modifications and amendments till 31.03.2001. Section 10A as inserted by Finance Act, 1981 read as under: "Section 10A. Special provision in respect of newly established in...

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I-T Dept releases Book on Controversies in Income Tax Assessment

The genesis of this book is an exercise carried out to compile best quality assessment orders passed in each Chief C.I.T region of Gujarat during the Financial Year 2011-12. On analyzing these orders it emerged that majority of additions were relatable to issues pertaining to 19 topics. Therefore it was decided to constitute  an expert [...

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Reopening of assessment on ground of eligibility for S. 10B deduction which was already allowed not justified

Metal Alloys Corporation Vs Assistant Commissioner of Income Tax (Gujarat High Court)

During the course of assessment proceedings the Income Tax Officer has raised certain queries with regard to deductions, which were replied by the assessee and the in the assessment order in paragraph no.4.1 the Assessing Officer has dealt with the question of grant of deduction and has allowed deductions. In our opinion, the reasons give...

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Interest on surplus funds, sales tax & excise refunds not eligible for exemption U/s. 10B

Tessitura Monti India (P.) Ltd. Vs. ITO- 8(3)(3) (ITAT Mumbai)

Interest on FD and from bank on surplus funds - Even as admitted by the assessee during hearing, the same is only on surplus funds for the time being and, therefore, cannot be said to be derived from the assessee's business. The same stands rightly excluded. Sales tax refund and excise duty draw back -As such, section 10B(1) read with...

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S. 10B Conversion of marble blocks into the polished slabs & tiles constitutes manufacture

M/s Grace Exports Vs. ITO Ward-2 (1) (Rajasthan High Court)

So far the question of benefit under s. 10B of the Act is concerned, the learned counsel for the appellant-assessee has submitted that the view as taken by the Tribunal cannot be sustained for the authoritative pronouncement of the Hon'ble Supreme Court in the case of ITO v. Arihant Tiles & Marbles (P.) Ltd. [2010] 186 Taxman 439 (SC) hol...

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Deduction U/s. 10B available before setting off of brought forward losses & unabsorbed depreciation

Assistant Commissioner of Income-tax Vs Charon Tec (P.) Ltd. (ITAT Chennai)

It is a well settled law that when two different views of the different jurisdictional High Courts are available, the decision favourable to the assessee is to b03e followed. The hon'ble Supreme Court of India in the case of CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) has held that (page 195) "if two reasonable constructions of ...

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Production of Paratha, Samosa, Dhokla etc is manufacture U/s. 10B

Deepkiran Foods (P.) Ltd. Vs Assistant Commissioner of Income-tax (ITAT Ahmedabad)

In the present case, we find that the assessee uses various materials like flour, ghee, oil etc. for the production of various items. The production is done by following a particular set process. The various raw materials when consumed lose their individual and independent identity and a different and new product comes into existence. ...

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Stitching charges from Local sales, not eligible for exemption u/s. 10B

Commissioner of Income-tax Vs First Garments Mfg. Co. India (P.) Ltd. (Madras High Court)

A reading of second proviso to section 10B of the Act thus clearly shows what is contemplated as deemed profits and gains derived from the export of articles or things for the purpose of Section 10B(1) of the Act. Thus, whenever local sales of articles or things does not exceed 25% of the total sale, then the profits and gains derived fro...

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Clarification Regarding issues Relating to Export of Computer Software- Direct TAX Incentives

Income tax press release (17/01/2013)

The Indian Software Industry has been the beneficiary of direct tax incentives under the provisions like sections 10A, 10AA & 10B of the Income-tax Act, 1961 in respect of their profits derived from the export of computer software. ...

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Clarifications on Issues relating to export of computer software – Deduction U/s. 10A, 10AA & 10B

Circular No. 01/2013-Income Tax (17/01/2013)

Circular No. 01/2013-Income Tax The CBDT has issued a Circular No. 01/2013 dated 17.01.2013 in which it has provided clarifications on various issues relating to the export of computer software and the allowance of deduction under sections 10A, 10AA and 10B of the Income-tax Act, 1961. Circular Covers the following issues :- 1. Whe...

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S. 10B Set-off of eligible unit’s loss against income of non-eligible unit during tax holiday period cannot be allowed

Karle International Pvt. Ltd. Vs The Assistant Commissioner of Income Tax (ITAT Bangalore), ITA No. 381/Bang/2012

During the period when the eligible unit enjoys exemption u/s.10B of the Act , if it suffers a loss then the same will be quarantined and carried forward to the assessment years immediately following the last of the assessment years for which the Assessee is entitled to claim exemption u/s.10B of the Act, for being set off in accordance w...

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Mere reconstitution of partnership firm not amount to splitting up of business already in existence

Commissioner of Income-tax Vs Arts Beauty Exports (Delhi High court)

There is no dispute that after the partnership was reconstitued, the reconstituted firm had started a new business with an amendment to the partnership deed enabling the firm to carry on the manufacture and export of handicrafts items. Prior to the reconstitution the firm was authorized to merely carry on trading and exports of handicraft...

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Approval by Central Government must to claim deduction u/s.10B for 100% EOU

Commissioner of Income tax Vs Regency Creations Ltd. (Delhi High Court)

In the instant case, there is no notification or official document suggesting that either the Interministerial Committee, or any other officer or agency was nominated to perform the duties of the Board (constituted under section 14 of the IDR Act), for purposes of approvals under section 10-B. ...

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Carry forward business losses & depreciation cannot be set off against profits of an undertaking while working out claim u/s. 10B

ASB International (P.) Ltd. Vs Deputy Commissioner of Income tax, Circle-1 (ITAT Mumbai)

Since the provisions of section 10A and 10B are similar in nature and as the jurisdictional High Court decided the issue while considering the provisions of section 10B also respectfully following the above, we uphold the contention of assessee that carry forward business losses and depreciation cannot be set off to the profits of the und...

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Assessee can exclude freight and instance from turn over while computing deduction u/s 10B

M/s. World Wide Safety Pvt. Ltd. Vs. Commissioner of Income Tax- III, Kolkata (ITAT Kolkata)

Tribunal in assessee’s own case for A.Y.2003-04 and 2004-05 exactly on the issue of incidental expenses such as freight, octroi and sales tax whether to be included in the total turnover for the purpose of computation of deduction u/s 10B of the Act, respectfully following the same and in view of the above discussion carried out, we all...

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Section 10A / 10B deduction allowable without set off of losses of non-eligible units

The Commissioner of Income Vs Black & Veatch Consulting Pvt.Ltd. (Bombay High Court)

Section 10A is a provision which is in the nature of a deduction and not an exemption. This was emphasised in a judgment of a Division Bench of this Court while construing the provisions of Section 10B in Hindustan Unilever Ltd Vs. Deputy Commissioner of Income Tax 2. (2010) 325 ITR 102 at para 24. ...

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Extension of exemption U/s. 10B available to units existed prior to 01.4.1999

Maral Overseas Ltd. Appellant Vs Additional Commissioner of Income-tax (ITAT Indore)

In AY 1999-2000, before expiry of the original time limit of five consecutive assessment years for which deduction was available as per then applicable law, the amended law became applicable and the assessee was accordingly eligible for deduction for the extended period of 10 years, as against 5 years allowed under the preamended law. ...

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Software Customisation is ‘production’ of computer program and entitled for S. 10B benefits

Cybertech Systems & Software Ltd Vs CIT (ITAT Mumbai)

The term ‘computer programme’ had not been defined under Section 10B of the Act, however, it had been defined under Section 10BB of the Act as ‘computer programme’ or ‘process’ or ‘management of electronic data’. After the amendment with effect from 1 April 2001, the definition of computer software had been given in the Ex...

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I-T department filing appeals ‘mechanically’

The Commissioner of Income Tax Vs M/s. DSL Software Ltd. (Karnataka High Court)

CIT vs. DSL DSoftware Ltd (Karnataka High Court) (i) Income Tax department made liable to pay Cost of Rs.1 lac for making the assessee to contest the appeals in three forums and wasting court’s time and tax payers’ money. (ii) Deduction u/s 10B available for the extended period upto 10 years....

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B/F business loss , unabsorbed depreciation and loss incurred by a non-eligible unit shall not be adjusted while computing the profit eligible for relief u/s. 10A of the Income Tax Act

CIT Vs. Yokogawa India Ltd (Karnataka High Court)

CIT vs. Yokogawa India Ltd (Karnataka High Court)- The High Court had to consider two issues for AY 2001-02 & onwards: whether (i) the loss incurred by a non-eligible unit & (ii) the brought forward unabsorbed loss & unabsorbed depreciation of the eligible unit has to be set-off against the profits of the eligible unit before allowing ded...

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Mere fact that Assessee getting some works done on job basis from sister concern would not deprive the assessee of its entity to be an EOU manufacturing unit

CIT Vs Continental Engines Ltd. (Delhi High Court)

CIT Versus Continental Engines Ltd. (Delhi HC) - There is no dispute that the assessee is an approved EOU unit approved by the NEPZ authorities and there is also no dispute that the assessee was having two units described as CEL-I and CEL-II and that the assessee was making exports. Both the CIT(A) and the Tribunal have recorded as a mat...

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Exemption under Section 10B of Income Tax Act not available to an Industrial undertaking taken over on lease

Synergies Casting Ltd. Vs. DCIT (ITAT Hyderabad)

In the case of Synergies Casting Ltd. v. DCIT it was held that exemption under Section 10B of the Income-tax Act, 1961 (the Act) is not available to an undertaking taken over on lease. Further, the Tribunal held that in order to get the benefit of Section 10B of the Act, for the unexpired period, the taxpayer must prove that it is a succe...

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Merely by carrying out processing which result into same commodity, there will not be any manufacturing or production for purpose of section 10B

Tonira Pharma Ltd. Vs. ACIT (ITAT Ahemdabad)

The undisputed fact now is that assessee has imported ascorbic acid FCC grade-iv and after undergoing some processing has made ascorbic acid IP. In the processing the assessee is using certain other chemicals, such as methanol and sulphuric acid for the purpose of cleaning and removing iron and lead contents, if any. The fine grade of asc...

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Delay in filing of return should not be a reason to deny exemption u/s 10B(1)

Asst. CIT Vs. Dhir Global Industries (P.) Ltd. (ITAT Bangalore)

Exemption under section 10B-Availability-Return not filed by due date-Proviso to section 10B(1) which provides that no exemption under section 10B shall be allowed if return is not furnished by due date prescribed under section 139(1) is directory and not mandatory in nature. Therefore, in genuine cases exemption under section 10B may be ...

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Profits earned from forward contract not to be included in the profits of the business of the undertaking for computing deduction under Section 10B

ACIT Vs. K. Mohan & Co.(Exports) (P.) Ltd (ITAT Bangalore)

Bangalore bench of the Income-tax Appellate Tribunal (the Tribunal) in the case of ACIT v. K. Mohan & Co.(Exports) (P.) Ltd [2010] 130 TTJ 719 (Bang) held that that profits earned from forward contracts cannot be included in the profits of the business of the undertaking for the purpose of computing deduction under Section 10B of the Inc...

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Direct Taxes ‘Manufacture’ – Reassessment – Stamp Valuation – Service of Notice – Document Identification Number

Definitions – Manufacture – Clause 3 - S 2 (29BA):- Clause 3 of the Finance Bill 2009 has sought to introduce sub section 29BA in section 2 of the Income Tax Act wherein the manufacture is defined for the first time The amendment is to take effect retrospectively from 1st April, 2009 and would apply in relation to Assessment Year 200...

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Allowability of deduction U/s. 10B to company engaged in business of contract research and in providing of laboratory facility to its parent company in USA

Enem Nostrum Remedies (P.) Ltd. Vs Assistant Commissioner of Income-tax (ITAT Mumbai)

Section 10B of the Income-tax Act, 1961 - Export oriented undertaking - Assessment year 2003-04 - Assessee-company was engaged in business of contract research and in providing of laboratory facility to its parent company in USA - It had claimed exemption under section 10B - Assessing Officer observed that assessee was not manufacturing o...

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Foreign Trade Policy 2009-14 – IT exemption U/s.10(A) & 10(B) extended till March 2011

Announcing the foreign trade policy 2009-14 here on Thursday, Mr Anand Sharma, Union Commerce Minister said, the Government wanted to provide a stable policy environment conducive for foreign trade and accordingly, it has been decided to continue with the DEPB (Duty Entitlement Pass Book Scheme) up to December 2010 and income-tax benefits...

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Posted Under: Income Tax |

Clarification Regarding Deduction Under Section 10B vide Instruction No. 2/2009 dated 09.03.2009

Instruction No. 2/2009 (09/03/2009)

Instruction No. 2/2009 dated 09.03.2009 Section 10B of the Income tax Act provides for exemption of income in case of hundred per cent export oriented undertakings subject to prescribed conditions. Explanation 2 (iv) below to the said section defines a “hundred percent export oriented undertaking” as an undertaking so approved...

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Clarification regarding deduction u/s. 10B of the Income Tax Act, 1961

Instruction No. 2/2009 (09/03/2009)

Instruction No. 2/2009, dated 9-3-2009 Section 10B of the Income tax Act provides for exemption of income in case of hundred per cent export oriented undertakings subject to prescribed conditions. Explanation 2 (iv) below to the said section defines a “hundred percent export oriented undertaking” as an undertaking so approved ...

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