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Showing contexts for: section 10aa in Tata Consultancy Services Ltd, Mumbai vs Asst Cit Ltu-1, Mumbai on 6 April, 2022Matching Fragments
47. The issue arising in ground nos.9 and 10, raised in assessee‟s appeal is regarding deduction under section 10AA of the Act in respect of SEZ units of the assessee which commenced its operations during earlier years.
48. The brief facts of the case pertaining to this issue as emanating from the record are: The assessee had claimed deduction under section 10AA of Tata Consultancy Services Ltd.
ITA No. 17/Mum./2011 ITA no.1650/Mum./2016 ITA no.1054/Mum./2016 the Act for the first time during the assessment year 2007-08. The relevant assessment year is the fifth year of deduction claimed on SEZ units under section 10AA of the Act. During the relevant assessment year, the assessee had claimed deduction under section 10AA of the Act in respect of SEZ units which had commenced its operation during the earlier assessment year i.e., A.Y. 2008-09, 2009-10 and 2010-11. In addition, the assessee had commenced operation in respect of below mentioned new SEZ units in respect of which deduction under section 10AA of the Act was claimed by the assessee.
49. During the course of assessment proceedings, the assessee was asked to show cause as to why deduction under section 10AA of the Act be not denied as the SEZ units are formed by splitting up or re-construction of an already existing business. In reply thereto, the assessee by referring to the conditions laid down in the provisions of section 10AA(4) of the Act submitted that the SEZ units in respect of which deduction under section 10AA of the Act has been claimed are neither formed by splitting up or reconstruction of existing business nor there is a transfer of building or plant previously used to the new business. The assessee provided the details of fresh investment in new plant and machinery during the relevant Tata Consultancy Services Ltd.
53. We have considered the rival submissions and perused the material available on record. In the present appeal, ground no.9, is in respect of various SEZ units which had commenced its operations during the assessment years 2008-09, 2009-10 and 2010-11. While ground no.10 in assessee‟s appeal, is in respect of Chennai-one SEZ units which also Tata Consultancy Services Ltd.
ITA No. 17/Mum./2011 ITA no.1650/Mum./2016 ITA no.1054/Mum./2016 commenced its operations in earlier assessment year i.e., A.Y. 2007-08. Thus, it has not been denied that in respect of all the units the relevant assessment year is not the first year of operation. Section 10AA of the Act allows deduction to the SEZ unit which begins to manufacture or produce articles or things or provide any service during the previous year relevant to any assessment year commencing on/or after 1st Day of April 2006, but before the 1st Day of April 2021. Sub-section (4) of section 10AA of the Act lays down certain conditions upon fulfillment of which the SEZ units shall be entitled to claim deduction under section 10AA of the Act. Section 10AA(4) of the Act reads as under:-
55. Thus, it appears that the Hon'ble Supreme Court considered two types of conditions in order to decide the eligibility of deduction. The first are the conditions which need to be examined only in the initial year while the second are the conditions which need to be examined every year before allowing the deduction. Therefore, once the first set of conditions is established in the initial year, these should not be examined in subsequent assessment years. We are of the view that provisions of section 10AA(4) of the Act lay down the first set of conditions which is to be satisfied in the initial year of operation and should not be examined in the subsequent years. As the CIT(A) has already allowed the deduction under section 10AA of the Act in respect of SEZ units for assessment years 2008-09, 2009-10 and 2010-11 and no further appeal has been filed by the Revenue against the same, which has also not been controverted by the learned Departmental Representative nor any facts contrary to the same has been adduced. Thus, as the deduction under section 10AA of the Act has already been allowed to the assessee in respect of SEZ units for the assessment years 2008-09, 2009-10 and 2010-11, we find no reason to deny the same in the relevant assessment year which is the fifth year of deduction Tata Consultancy Services Ltd.