Page 151 - DCOM508_CORPORATE_TAX_PLANNING

Corporate Tax Planning

Notes 100% EOU in Financial year 2007-08 relevant to assessment year 2008-09. No deduction
under section 10B shall be admissible to undertaking B as the period of 10 years expires in
F.Y. 2005-06 relevant to A.Y. 2006-07 prior to its approval as 100% EOU.

(iii) Undertaking ‘C’ is set up in Domestic Tariff Area in the financial year 2000-01 relevant
to assessment year 2001-02 and engaged in the business of providing computer related
services, other than those notified by the Board for the purpose of section 10B. In

financial year 2002-2003, it acquires more than 20% of old plant & machinery and starts
manufacturing computer software. It also gets approval as 100% EOU in fi nancial year
2002-03. Undertaking ‘C’ shall not be eligible for deduction under section 10B, as there has
been transfer of old plant and machinery.
(iv) Undertaking ‘D’ is set up and starts producing computer software in Financial year 2003-04
relevant to AY 2004-05. It gets approval as 100% EOU in FY 2006-07 relevant to AY 2007-08.
It shall be eligible for deduction u/s. 10B from AY 2007-08. However, the deduction shall
not be available after AY 2009-10.
(v) Undertaking ‘E’ is set up and starts producing computer software prior to 31.3.1994. It gets
approval as 100% EOU in FY 2004-05 relevant to AY 2005-06. Undertaking ‘E’ shall not be
eligible for deduction u/s. 10B as the period of deduction of 10 years expires prior to A.Y.
2005-06.

6.3.3 Consequence of Amalgamation and Demerger

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:
(i) Amalgamating or the Demerged Company: No deduction shall be admissible under this
section to the amalgamating or the demerged company for the previous year in which the
amalgamation or the demerger takes place.

(ii) Amalgamated or the Resulting Company: Deduction shall be admissible under this section
to the amalgamated or the resulting company for the unexpired period of deduction.

Self Assessment

Fill in the blanks:
11. The Government amended in November 1983 a concession scheme to facilitate the setting
up of ……………… in order to enable them to meet requirements of foreign demand in
terms of pricing, quality, precision etc.
12. The EXIM Policy, 2002-07 reinforces the importance of Scheme in …………… of the policy
13. EOUs established anywhere in India and exporting 100% products except certain fi xed
percentage of sales in the ………………. as may be permissible under the Policy.

14. ....................................... of the Income-tax Act provides for 100% deduction of profi ts derived
by a hundred by a hundred per cent Export Oriented undertaking, form export of articles
or things or computer software manufactured or produced by it.

15. .......................................... deduction shall be admissible under this section to the
amalgamating or the demerged company for the previous year in which the amalgamation
or the demerger takes place.

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