By TIOL News Service

AHMEDABAD, OCT 30, 2018: THE ISSUE IS - Whether the approval from STPI without having the same ratified by the Board of approval is sufficient to claim the deduction u/s 10B of the Act - YES IS THE VERDICT.

Facts of the case

The assessee, a partnership firm and 100% Export Oriented Unit (EOU) registered under Software Technology Parks of India (STPI), had filed return for relevant AY, claiming deduction u/s 10B of the Act. During the assessment proceedings, AO observed that the STPI unit of the assessee was not approved by the Board of Approvals as required u/s 10B of the Act. Accordingly, the AO sought an explanation from the assessee. The assessee submitted reply with which AO was not satisfied and disallowed the exemption claimed by it u/s 10B of the Act. On appeal, CIT(A) allowed exemption u/s 10B of the Act.

Tribunal held that,

++ ITAT, Pune Bench in the case of Cat Lab Pvt. Ltd in the identical facts and circumstance held that there is no need to take separate approval from the BOA for claiming the deduction u/s 10B of the Act. The ITAT Ahmedabad Bench has also decided the similar issue in favour of the assessee in the case of Quality BPO Services Pvt. Ltd. vs. ACIT for AY 2008-09 after considering the judgment of Delhi High Court in the case of Regency Creation Ltd. It was noted that the CIT(A) in the own case of the assessee for the AY 2009-10 allowed the exemption u/s 10B of the Act after due verification. Against the order of CIT(A) for Asst. Year 2009-10, the Revenue has not preferred any appeal which implies that the order of the CIT(A) has reached to its finality. After having regard to the facts in totality, it was held that the assessee is eligible for exemption u/s 10B of the Act as the same was allowed by the AO in other years as well as by the CIT(A). In the result, appeal of the revenue is dismissed.

(See 2018-TIOL-1975-ITAT-AHM)