Page 147 - DCOM508_CORPORATE_TAX_PLANNING

Corporate Tax Planning

Notes in the case of amalgamation of an Indian company which has developed a special economic zone
with another Indian company.
!

Caution One should also keep in view the following points:

1. The profits and gains from the eligible business shall be computed as if such
eligible business were the only source of income of the assessee during the relevant
assessment year.
2. The Assessing Officer has power to recompute profit in some cases. These cases are

given by section 80-IA (8)/ (10).

3. Where any amount of profits and gains is claimed and allowed as deduction under
section 80-IAB for any assessment year, deduction to the extent of such profi ts and
gains shall not be allowed under sections 80HH to 80RRB and shall in no case exceeds
profits and gains of such eligible business.

Self Assessment

Fill in the blanks:
6. ………………… was inserted in the Income tax Act, 1961 by the Special Economic Zones
Act, 2005 (the SEZ Act) with effect from 10-2-2006.
7. ....................... in relation to the Special Economic Zones means taking goods or providing
services out of India from a Special Economic Zone by land, sea, air, or by any other mode,
whether physical or otherwise

8. In case of an SEZ deduction for fi rst five assessment years is ..............................of the profi t
and gains derived from export of articles or things or from services is deductible for a
period of 5 consecutive assessment years.
9. In respect of an undertaking setup in Special Economic Zone on or after April 1, 2003 a
deduction is available under ………………..
10. 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 …………………...

6.3 Special Provision in respect of Newly Established Undertakings
in 100% Export oriented Units (EOUs)

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 Government amended in November
1983 a concession scheme to facilitate the setting up of export oriented units (EOUs) in order to
enable them to meet requirements of foreign demand in terms of pricing, quality, precision etc.
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. The scheme has witnessed many changes over the last twenty-four years in the
context of ever changing economic realities. However, the basic premise remains the same. This
premise is that the exporters are treated as a special class and given the required tariff, non-tariff
and policy support to facilitate their export efforts. Thus, today the EOU Scheme has emerged as
a dynamic policy initiative facilitating the exporting community in the task of increased exports.
The EXIM Policy, 2002-07 reinforces the importance of Scheme in chapter 6 of the policy.

142 LOVELY PROFESSIONAL UNIVERSITY