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).
Assessee in the present case is engaged in the business of rendering software development services to its Associate Enterprises (AE) located in various places outside India has Duly filed its return of income for the relevant assessment year declared a total income of Rs. 1,66,03,779. Accordingly, assessee claimed deduction under section 10B of the Income Tax Act, 1961.
During the course of assessment proceedings the Assessing Officer (AO) denied the exemption claimed by the assessee. He was of the view that as per section 10B of the act the assessee should be undertaking which has been approved as a 100 percent “export oriented undertaking” by the Board appointed by the Central Government And also noted that the assessee is only registered as a 100 percent EOU by STPI. Accordingly he disallowed the claim of deduction under section 10B of the Act.
While considering the submissions of both the parties the tribunal bench comprising of Judicial Member P. Madhavi Devi and Accountant Member S.Rifaur Rahman has observed that the assessee company is eligible for deduction under section 10B of the act. The bench further stated that it is enough if the assessee is registered with Software Technology Park of India as a 100 percent EOU or it is also necessary for the assessee to have the approval of the Board constituted by the Central Government under section 14 of the Industries Development and Regulation Act 1951.
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