January 2019

Section 10B Export oriented undertaking 10B(9)/(9A)) - Assessee firm was engaged in production and export of iron ore - It claimed deduction u/s. 10B - Assessing officer rejected assessee's claim on ground that assessee's sister concern got merged with assessee - assessee's sister concern was also an EOU - Impugned order rejecting assessee's claim was to be set aside

K. B. Bhujle
Advocate

35.  CIT vs. Trident Minerals; [2018] 100 taxmann.com 161 (Karn): Date of order: 10th October, 2018 A Y. 2009-10

 

Section 10B Export oriented undertaking 10B(9)/(9A)) - Assessee firm was engaged in production and export of iron ore - It claimed deduction u/s. 10B - Assessing officer rejected assessee's claim on ground that assessee's sister concern got merged with assessee - assessee's sister concern was also an EOU - Impugned order rejecting assessee's claim was to be set aside

 

The assessee-firm was engaged in business of production, manufacture and export of iron ore. On 02/05/2008 the assessee's sister concern namely KMMI Exports merged with assessee. On 22/09/2009, return of income was filed u/s. 139(1) of the Act and deduction u/s. 10B was claimed in respect of export income. The Assessing Officer held that deduction u/s. 10B was not allowable on the ground that two partnership firms had been merged and that assets of KMMI Exports had been taken over by assessee.

 

The Commissioner (Appeals) allowed the claim of the assessee.

 

The Tribunal upheld the decision of the Commissioner (Appeals).

 

On appeal by the Revenue, the Karnataka High Court upheld the decision of the Tribunal and held as under:

 

i)    The Commissioner (Appeals) recorded a finding that the Circular of the Board issued u/s. 84 was not withdrawn and was still in force. It is the Rule and also the practice of the Board to withdraw the Circular once it is not relevant. Therefore, the Circular No. 15/5/63-IT(A1), dated 13/12/1962 is in force and relevant in the present context, when the clauses u/s. 80J and 10B are similar. It was also recorded by the appellate authority that the observation made by the Assessing Officer, as per section 10B(7), only Indian company is eligible for amalgamation is not appropriate.


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