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Fema / RBI, Finance, Income Tax : Announcing the foreign trade policy 2009-14 here on Thursday, Mr Anand Sharma, Union Commerce Minister said, the Government wanted...
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Income Tax : The issue was whether notional income booked on a joint development agreement can be taxed before project commencement. The Tribun...
Income Tax : A clarificatory Circular No. 01/2013 dated 17.01.2013 was issued by CBDT to address various contentious issues leading to tax disp...
Income Tax : A clarificatory Circular No. 01/2013, dated 17-1-2013 (hereinafter referred to as 'Circular') was issued by CBDT to address variou...
Income Tax : 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 resp...
Income Tax : The Indian Software Industry has been the beneficiary of direct tax incentives under the provisions like sections 10A, 10AA & 10B ...
Income Tax : Circular No. 01/2013-Income Tax The CBDT has issued a Circular No. 01/2013 dated 17.01.2013 in which it has provided clarificatio...
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 undertaking while working the claim u/s 10B. Therefore, AO is directed to do the needful in light of the above principles laid down.
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) holding, inter alia, that step-wise activity of cutting marble blocks and converting into the polished slabs and tiles constituted manufacture or production in terms of s. 80-IA of the Act while distinguishing the decision in Aman Marble’s case (supra), and while observing, inter alia, held as under:
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 allow the appeal of the assessee. The revision order of the CIT u/s 263 of the Act is quashed.
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.
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 Explanation 2 to Section 10B of the Act which includes any customised electronic data or any product or services of similar nature as notified by the Central Board of Direct Taxes (CBDT) which is transmitted or exported from India to any place outside by any means. Therefore, the human resource service in the field of development of software programme as notified falls under the definition of computer programme as stipulated in the Explanation as well as the definition under Section 10BB of the Act.
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.
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.
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 deduction u/s 10A/ 10B.
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 matter of fact that the assessee was involved in manufacturing of an article or thing and that the mere fact that it was getting some works done on job basis from its sister concern would not deprive the assessee of its entity to be an EOU manufacturing unit.
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 successor to the predecessor company. Since the taxpayer was only a lessee it was not a successor to the lessor.
