Page 145 - DCOM301_INCOME_TAX_LAWS_I

Income Tax Laws – I

Notes As against this view adumbrated in the orders of the Tribunal, in accordance with which
the assessment order in the present case has been framed, the CIT has taken a different
view. We are not here concerned with the correctness of either of the views. It is only to be
noted that where the assessment order has been passed on the basis of one of the several
plausible views or interpretations to be placed on the statutory provisions, it does not
become erroneous and prejudicial to the interests of the revenue merely because the CIT
prefers to adopt another view which is favourable from the Revenue’s point of view.
This is a well settled position for which no authority needs to be cited. In this view of the
matter, we hold that the Assessing Officer did not err and the assessment order passed by
him cannot be said to be erroneous because the 10% profits of the units eligible for the
benefit under section 10A have been used to adjust the 9 ITA No: 4324/Mum/2008 losses
from the local non 10A units. The appeal of the assessee is accordingly accepted and the
order of the CIT passed under section 263 is set aside.
Questions
1. Study and analyse the case.
2. Write down the case facts.

3. What do you infer from it?
Source: http://www.indiankanoon.org/doc/41007109/
5.4 Summary

Free Trade Zone, also called Foreign-trade Zone, formerly Free Port, an area within which
goods may be landed, handled, manufactured or reconfigured, and re-exported without
the intervention of the customs authorities.
No deduction under this section shall be allowed to an assessee who does not furnish a
return of his income on or before the due date specified under sub-section (1) of section
139.

Where any undertaking of an Indian company which is entitled to the deduction under
this section is transferred, before the expiry of the period specified in this section, to
another Indian company in a scheme of amalgamation or demerger.

Section 10AA was inserted in the Income-tax Act, 1961 by the Special Economic Zones Act,
2005 (the SEZ Act) with effect from 10-2-2006.

Where an undertaking is transferred to another company under a scheme of amalgamation
or demerger, the deduction under section 10AA shall be allowable in the hands of the
amalgamated or the resulting company.

Section 54GA has been inserted to give exemption in case of shifting of an industrial
undertaking from urban area to a special economic zone.

The Export Oriented Unit (EOU) Scheme, which had been introduced in the early 1980s
remains in the forefront of country’s export production schemes.
The main objectives of the EOU scheme is to increase exports, earn foreign exchange to the
country, transfer of latest technologies stimulate direct foreign investment and to generate
additional employment.

A 100 per cent export-oriented unit is an industrial unit offering for export its entire
production, excluding the permitted levels of domestic tariff area sales.
EOUs may be set up with a foreign equity participation of up to 100 per cent.

140 LOVELY PROFESSIONAL UNIVERSITY