ACIT, CHENNAI V. Shri Nagesh Chundur, CHENNAI

ITA 83/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5017 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-06-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 17-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Assessee Lawyers: MRS PUSHYA SITARAMAN
• Keywords: Question of law
• Section: 143(3); 10B; 2

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL CHENNAI B BENCH, CHENNAI. BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER & SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER I.T.A. NOS.83 AND 729/MDS/2011 ASSESSMENT YEARS: 2006-07 & 07-08 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE XV, CHENNAI 600 034. VS. SHRI NAGESH CHUNDUR, FLAT NO.4A, SRINIVAS, NEW NO. 30, MAHARAJA SURYA ROAD, ALWARPET, CHENNAI 18. [PAN : ACUPC6638E] C.O. NO. 26/MDS/2011 [IN I.T.A. NOS.83/MDS/2011] ASSESSMENT YEARS: 2006-07 SHRI NAGESH CHUNDUR, FLAT NO.4A, SRINIVAS, NEW NO. 30, MAHARAJA SURYA ROAD, ALWARPET, CHENNAI 18. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE XV, CHENNAI 600 034. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN ASSESSEE BY : MRS. PUSHYA SITARAMAN ORDER PER U.B.S. BEDI, J.M. THE APPEAL OF THE REVENUE AND CO OF THE ASSESSEE EM ANATES FROM THE ORDER PASSED BY THE LD. CIT(A) XII CHENNAI DATED 22.10.20 10 FOR THE ASSESSMENT YEAR 2006-07 AND THE SECOND APPEAL OF THE REVENUE EMANAT ES FROM THE ORDER PASSED BY THE LD. CIT(A) XII, CHENNAI DATED 18.01.2011 FOR TH E ASSESSMENT YEAR 2007-08. 2. THESE MATTERS INVOLVED COMMON ISSUE AND WERE HE ARD TOGETHER, THEREFORE, BEING DISPOSED OFF B Y THIS SINGLE ORDER FOR THE SA KE OF CONVENIENCE. 3. AS REGARDS, THE APPEAL OF THE DEPARTMENT FOR TH E ASSESSMENT YEAR 2006-07 IN ITA NO. 83/MDS/2011, CHALLENGE IS WITH REGARD TO AL LOWING CLAIM OF DEDUCTION UNDER ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 2 SECTION 10A TO THE EXTENT OF ` .86,86,131/- ON THE GROUND THAT THE LD. CIT(A) OUGH T TO HAVE APPRECIATED THE FACT THAT THE ASSESSEES UNDER TAKING STARTED ITS PRODUCTION DURING THE FINANCIAL YEAR 1999-2000 BUT NOT REGISTE RED WITH STPI AT THAT TIME. IN AS MUCH AS THE ASSESSEES UNDERTAKING GOT REGISTERED W ITH STPI ON 27.03.2002, BUT NOT IN A SEZ AND CONTINUED TO USE ITS OLD MACHINERIES A ND MOREOVER, SECTION 10A IS LOCATION BASIS AND SECTION 10B IS ACTIVITY BASIS AN D THE LD. CIT(A) OUGHT TO HAVE APPLIED THE RATIO OF DECISION OF THE HYDERABAD BENC H OF ITAT IN THE CASE OF INFOTECH ENTERPRISES LTD. 85 ITD 325, WHERE THE FACTS OF THE CASE ARE IDENTICAL AND SHOULD HAVE UPHELD THE ORDER OF THE ASSESSING OFFICER. THE REFORE, IT WAS PLEADED FOR SETTING ASIDE THE ORDER OF THE LD. CIT(A) AND THAT OF THE A SSESSING OFFICER SHOULD BE RESTORED. 4. FACTS INDICATE THAT THE ASSESSING OFFICER DENIE D THE CLAIM OF EXEMPTION UNDER SECTION 10A OF THE ACT OF THE ASSESSEE ON THE GROUN D THAT THE ASSESSEE HAD NOT RECEIVED THE REGISTRATION FROM SOFTWARE TECHNOLOGY PARKS OF INDIA (STPI) AS ON THE DATE OF COMMENCEMENT (1999-2000) OF ITS PRODUCTION ACTIVITIES. AGGRIEVED BY THE ACTION OF THE ASSESSING OFFICER AND DEMAND RAISED, THE ASSESSEE PREFERRED APPEAL BY RAISING ONLY ONE PLEA THAT THE ASSESSEE IS ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTION 10A OF THE INCOME TAX ACT EVEN THOUGH IT CO MMENCED ITS PRODUCTION IN THE FINANCIAL YEAR 1999-2000 AND GOT THE REGISTRATION A S A STP ON 26.03.2002. 5. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSES SEE CONTENDED THAT THE DATES MENTIONED IN SECTION 10A(2)(I)(A), 10A(2)(I)(B) 10A (2)(I)(C) ONLY LISTS THE CONDITIONS REGARDING THE YEAR OF MANUFACTURE YEAR-WISE FOR THE PURPOSE OF RECKONING THE EXEMPTION FOR DEDUCTION FOR 10 CONSECUTIVE YEARS WI TH REFERENCE TO THE UNDERTAKINGS SETUP IN DIFFERENT PERIOD AND LOCATIONS I.E. FREE T RADE ZONE, STP AND SEZ BASED ON THE PER-AMENDED PROVISIONS AND THE PRESENT SUBSTITU TED SECTIONS. SINCE THE TAX ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 3 HOLIDAY IS FOR CONSECUTIVE 10 YEARS PERIOD FROM THE YEAR OF MANUFACTURE FOR PRODUCTION, IT DOES NOT MEAN THAT UNDERTAKING SETUP BEFORE 01.04.1994 AND AFTER 01.04.2001 AND GOT REGISTERED AS STP UNIT WOULD NOT GET DEDUCTION. IT WAS ALSO SUBMITTED BY THE ASSESSEE THAT HE HAD COMPLIED WITH ALL THE CONDITIONS AS ABOVE AND HENCE, ELIGIBLE FOR CLAIM OF EXEMPTION UNDER SECTIO N 10A OF THE INCOME TAX ACT, 1961. IT WAS FURTHER CONTENDED THAT SECTIONS 10A A ND 10B ARE PARA MATERIAL OR ANALOGOUS AS HAD BEEN CLARIFIED BY THE CBDT CIRCULA RS IN NO. 794 DT. 9.8.2000 AND NO. 1/2005 DT. 6.1.2005. THE ASSESSEE ALSO RELIED U PON VARIOUS JUDGMENTS DELIVERED IN THIS CONTEXT BY DIFFERENT APPELLATE AUTHORITIES, WHICH ARE AS UNDER: 1. FORESEE INFORMATION SYSTEMS (P) LTD. ITA NOS. 30 14/BANG/04, 1363 & 1364/BANG/2005 DT. 16.03.07. 2. VIDYA TECH SOLUTIONS PVT. LTD. ITA NOS. 813, 3 455 & 3456 (DEL.)/2008 DT. 11.09.09. 3. IQURA TECHNOLOGIES PVT. LTD. ITA NOS. 280 TO 284 (BNG)/09 DT. 21.08.09. 4. GIGNEXT SOLUTIONS INDIA PVT. LTD. ITA NO. 466 (BANG)/2009 DT. 24.07.09. 5. E4E APPLICATION SERVICES PVT. LTD. ITA NOS. 47 0 & 471/BANG/2009 DT. 31.07.09. THUS IT WAS CONTENDED BY THE ASSESSEE, AS UNDER, IN HIS LETTER DT. 16.01.2010:- 1. CBDT CIRCULAR NO.1/2005 DT. 6.1.05 WOULD SQUAREL Y BE APPLICABLE TO MY CASE, EVEN THOUGH IT SPEAKS OF DEDUCTION U/S 10B AS BOTH SECTION 10A AND SECTION 10B ARE ANALOGOUS. 2. THE UNIT ORIGINALLY STARTED AS A DTA UNIT AND SU BSEQUENTLY CONVERTED INTO A 100% EOU WITH STPI REGISTRATION DOES NOT AMOUNT TO RECONSTRUCTION OF A BUSINESS ALREADY IN EXISTENCE. 3. THE PERIOD OF CLAIMING DEDUCTION U/S 10A IS FOR THE LEFT OVER PERIOD AFTER THE DATE OF REGISTRATION WITH THE STPI. 4. IN SO FAR HAS HAVING ANALYSED THE FACTS OF MY CA SE WITH THE RATIO OF DECISIONS AND ALSO CONSIDERING THE CBDT CIRCULAR NOS. 308 AND 657 AS WELL AS CIRCULAR 1/2005 WHICH ESTABLISH BEYOND A SHOW OF DOUBT THAT THE DEDUCTION U/S 10A WAS AVAILABLE TO THE EXISTING UNITS AND SECONDLY TH E CONDITIONS LAID DOWN IN SEC. 10A(2)(I)(B) AS WELL AS SECTION 10A(2)(II) & ( III) ARE FULFILLED. FINALLY IT WAS SUBMITTED BY THE ASSESSEE THAT THE U NITS EXISTING IN FREE TRADE ZONES WHICH GET SUBSEQUENTLY REGISTERED WITH APPROVAL OF THE CONCERNED AUTHORITIES FOR BEING ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 4 TREATED AS AN UNIT UNDER STPI SCHEME WOULD ALSO GET BENEFIT OF DEDUCTION FROM THE YEAR OF REGISTRATION AND REQUESTED THAT THE APPEAL MAY B E ALLOWED BASED ON THE ABOVE CIRCULARS OF THE BOARD AND THE CASE-LAWS RELIED BY HIM. 6. THE LD. CIT(A), WHILE CONSIDERING AND DISCUSSING ALL THE POINTS RAISED BY THE LD. AR OF THE ASSESSEE IN THE LIGHT OF THE ORDER OF THE ASSESSING OFFICER AND RELEVANT PROVISIONS AND VARIOUS CASE LAW, HAS CONCLUDED TO D IRECT THE ASSESSING OFFICER TO ALLOW ELIGIBLE EXEMPTION UNDER SECTION 10A OF THE ACT AS CLAIMED BY THE ASSESSEE AS UNDER: IN VIEW OF THE FOREGOING ANALYSIS, KEEPING IN MIN D THE DECISION OF PUNJAB & HARYANA HIGH COURT IN MAHAVIR SPINNING MILLS CASE (SUPRA) AND ALSO CONSIDERING THE CONTENTS OF CBDT CIRCULAR 764 OF 20 00, AS WELL AS CBDT CIRCULAR 1 OF 2005 WHICH ESTABLISHES BEYOND A SHADOW OF DOUB T THAT EXEMPTION U/S 10A IS AVAILABLE TO THE EXISTING UNITS AND CONSEQUENTLY TH E CONDITIONS LAID DOWN IN SECTION 10A(2)(I)(B) AS WELL AS 10A(2)(II) AND 10A( 2)(III) ARE FULFILLED. FURTHER, THE AR OF THE APPELLANT HAD FURNISHED A CO PY OF THE DECISION OF THE JURISDICTIONAL ITAT D BENCH IN THE CASE OF IT O VS. HEARTLAND K.G INFORMATION LTD., REPORTED IN [2010] 131 TTJ 216 (CHENNAI) IN I TA NO. 1884(MDS) OF 2006, FOR THE ASST. YEAR 2004-05. THE RELEVANT PORTION OF THE HONBLE ITATS DECISION IS REPRODUCED AS UNDER: A PLAIN READING OF THE ABOVE SECTION WOULD MAKE IT CLEAR THAT NOT ONLY UNITS LOCATED IN SEZ WHICH ARE ELIGIBLE FOR DEDUCTI ON UNDER CL. (C) OF SUB-S (2) OF THIS SECTION, BUT EVEN THE UNITS LOCATED IN ANY FREE TRADE ZONE OR ANY ELECTRONIC HARDWARE TECHNOLOGY PARK ARE ALSO ELIGIB LE FOR THE DEDUCTION. THIS IS FURTHER CLEAR BECAUSE AFTER CLS. (A) AND (B ) THE WORD USED IS OR WHICH MEANS EVERY CLAUSE WOULD HAVE INDEPENDENT EFF ECT. THEREFORE, WE REJECT THE OBJECTION RAISED BY THE LEARNED DEPARTME NTAL REPRESENTATIVE THAT SINCE THE UNIT IS NOT LOCATED IN SEZ AREA, THE ASSESSEE IS NOT ELIGIBLE TO THE DEDUCTION. ADMITTEDLY, THE UNIT IS LOCATED I N SOFTWARE TECHNOLOGY PARK OF INDIA AND EVEN COPY OF THE APPROVAL VIDE LE TTER DT. 25.04.2001 HAS BEEN PLACED ON RECORD ... IN VIEW OF THE CITED CASE-LAW AND ANALYSIS GIVEN AB OVE AND IN CONSONANCE WITH THE DECISION OF THE JURISDICTIONAL ITAT, CITED SUPRA, IT IS NOT NECESSARY THAT THE UNDERTAKING OF THE APPELLANT SHOULD HAVE COMMEN CED ITS ACTIVITIES IN THE SOFTWARE TECHNOLOGY PARK. THUS, THE APPELLANT IS EL IGIBLE FOR CLAIM OF EXEMPTION U/S 10A OF THE INCOME-TAX ACT, 1961 AND THEREFORE, THE ASSESSING OFFICER IS DIRECTED TO ALLOW ELIGIBLE EXEMPTION UNDER SECTION 10A OF THE ACT CLAIMED BY THE APPELLANT. ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 5 7. AGGRIEVED BY SUCH ORDER OF THE LD. CIT(A), THE D EPARTMENT HAS CAME UP IN APPEAL AND TO SUPPORT THE ORDER OF THE LD. CIT(A), THE ASS ESSEE FILED CO. 8. THE LD. DR, WHILE REITERATING THE GROUNDS OF APP EAL, HAS PLEADED THAT THE ISSUE HEREIN IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HYDERABAD BENCH IN THE CASE OF INFOTECH ENTERPRISES LTD. (SUP RA). THERE IS A MATERIAL DIFFERENCE BETWEEN PROVISIONS OF SECTIONS 10A AND 10B, THEREFO RE, THE LD. CIT(A) WAS NOT JUSTIFIED IN ACCEPTING THE APPEAL OF THE ASSESSEE BY FOLLOWIN G ITAT CHENNAI D BENCH IN THE CASE OF ITO VS. HEARTLAND K.G INFORMATION LTD. (SUP RA). THEREFORE, IT WAS, PLEADED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE AND THAT OF THE ASSESSING OFFICER SHOULD BE RESTORED. WHEREAS, THE LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THIS ISSUE IS NOT ONLY COVERED BY THE ORDER OF THE ITAT, CHENNAI BUT ALSO BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT & OTHERS VS. M/S. EXPERT O UTSOURCE (P) LTD. IN ITA NO. 323 OF 2010 IN WHICH FACTS ARE ALSO SIMILAR AND OTHER CASE S AS RELIED UPON BEFORE THE LD. CIT(A) ARE ALSO SUPPORTIVE OF THE CASE OF HE ASSESSEE, SO WHILE FILING COPIES OF ALL THE DECISIONS OF THE TRIBUNAL AS WELL AS OF HIGH COURT, IT WAS PL EADED THAT SINCE LD. CIT(A) HAS TAKEN A CORRECT DECISION TO ALLOW THE CLAIM OF THE ASSESSEE , THEREFORE, THERE IS NO MERIT IN THE APPEAL OF THE REVENUE, WHICH MAY KINDLY BE DISMISSE D. 9. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDERIN G THE MATERIAL ON RECORD AS WELL AS PRECEDENTS RELIED UPON, WE FIND THAT THE ISSUE R AISED IN THE APPEAL OF THE REVENUE IS NOT ONLY COVERED IN FAVOUR OF THE ASSESSEE BY ITAT CHENNAI BENCH, BUT ALSO BY VARIOUS DECISION OF OTHER BENCHES AND HONBLE HIGH COURTS I NCLUDING HONBLE KARNATAKA HIGH COURTS DECISION IN ITA NO. 323 OF 2010 DATED 01.03 .2011 IN WHICH FACTS HAVE BEEN ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 6 INCORPORATED IN PARA 2 AT PAGE 3 & 4 AND CONCLUSION HAS BEEN DRAWN IN PARA 4 AND 5 OF THE ORDER, WHICH ARE REPRODUCED AS UNDER: 2. THE ASSESSEE IS CARRYING ON THE BUSINESS AS A SOFTWARE CONSULTANT AND DEVELOPING SOFTWARE. IT IS A PRIVATE LIMITED CO MPANY. IT WAS INCORPORATED ON 17.12.2003. IT ENTERED INTO AN AGRE EMENT WITH ITS PARENT COMPANY ON 20.10.2003 FOR PROVIDING SOFTWARE DEVELO PMENT SERVICES. THE FIRST INVOICE WAS RAISED BY THE ASSESSEE ON 29.12.2 003. THE ASSESSEE SECURED THE STPI REGISTRATION ON 04.08.2004. FOR TH E ASSESSMENT YEAR 2005-06, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTI ON 10A OF THE ACT. HE HAD ENCLOSED FORM 56F ALONG WITH THE RETURN OF INCO ME IN SUPPORT OF THE CLAIM OF DEDUCTION UNDER SECTION 10A. THEREAFTER, S CRUTINY ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON 28.09.2007. T HE ASSESSING AUTHORITY DISALLOWED THE DEDUCTION CLAIMED UNDER SE CTION 10A ON THE GROUND THAT THE COMPANY WAS INCORPORATED AND STARTE D BUSINESS ACTIVITY PRIOR TO OBTAINING APPROVAL OF STPI. HENCE, THE CON DITIONS LAID DOWN UNDER SECTION 10A(2)(I)(B) AND (C) OF THE ACT ARE NOT SAT ISFIED. THE ASSESSEE DID NOT CHOOSE THE AVAILABLE OPTION OF CONVERSION OF TH E DTA UNIT INTO STP UNIT. THEREFORE, WHEN THE ASSESSEE HAS USED THE MACHINERY PREVIOUSLY USED, WHICH IS MORE THAN 20% OF THE TOTAL PLANT AND MACHI NERY, THE CONDITION LAID DOWN UNDER SECTION 10A(2)(III) OF THE ACT ARE NOT S ATISFIED. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE PREFERRED AN APPEAL. THE C OMMISSIONER OF INCOME TAX (APPEALS) BY A WELL CONSIDERED ORDER BY PLACING RELIANCE ON THE CIRCULAR ISSUED UNDER SECTION 10B OF THE ACT AND AL SO THE SEVERAL JUDGMENTS DEALING WITH THE ABOVE ASPECTS, HELD THAT THE ASSES SEE IS ENTITLED TO THE DEDUCTION UNDER SECTION 10A TO THE EXISTING UNIT AN D CONSEQUENTLY, THE CONDITIONS LAID DOWN UNDER SECTION 10A(2)(I)(B) AND 10A(2)(II) & (III) ARE FULFILLED AND DIRECTED THE ASSESSING AUTHORITY TO A LLOW ELIGIBLE DEDUCTIONS UNDER SECTION 10A. AGGRIEVED BY THE SAID ORDER, THE REVENUE PREFERRED AN APPEAL TO THE TRIBUNAL WHICH HAS UPHELD THE SAID OR DER. AGGRIEVED BY THE SAME, THE REVENUE IS IN APPEAL BEFORE US. 3. FROM THE AFORESAID FACTS, IT IS CLEAR THAT SECT ION 10A PROVIDES FOR A DEDUCTION FROM THE TOTAL INCOME OF PROFITS DERIVED BY AN UNDERTAKING FROM THE EXPORT OF ARTICLES OR THINGS OR COMPUTER SOFTWA RE FOR A PERIOD OF TEN CONSECUTIVE ASSESSMENT YEARS. THE TAX HOLIDAY PERIO D COMMENCES WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE SUCH ARTICLES OR T HINGS OR COMPUTER SOFTWARE. SECTION 10(2) PRESCRIBES CERTAIN CONDITIO NS ON THE FULFILLMENT OF WHICH THE BENEFIT OF 10A COULD BE AVAILED. ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 7 4. IN THE INSTANT CASE, THE ASSESSEE BEGAN OPERATI ONS ON 17.12.2003 WHEREAS THE STPI WAS REGISTERED ON 04.08.2004. THE STP AUTHORITIES COULD ALSO PERMIT THE CONVERSION OF AN EXISTING UNIT INTO A STPI UNIT. THE PURPOSE OF THE STP SCHEME IS TO ENCOURAGE EXPORTS AND GAIN VALUABLE FOREIGN EXCHANGE FOR THE COUNTRY. THE STP SCHEME PROVIDES T HE BENEFIT OF CONVERTING A DTA UNIT INTO A STPI UNIT AND THE SAME SHOULD ALSO HOLD GOOD FOR TAX PURPOSES. CBDT CIRCULAR NO.1/2005 DATED 06. 01.2005 GRANTS CERTAIN BENEFITS UNDER SECTION 10B. THOUGH THE CIRC ULAR IS IN THE CONTEXT OF SECTION 10B, THE RATIO OF THE CIRCULAR EQUALLY APPL IES TO SECTION 10A ALSO. IN FACT, THE COMMISSIONER OF APPEALS HAS REFERRED TO V ARIOUS JUDGMENTS ON THE POINT AND HAS COME TO THE CONCLUSION THAT THE BENEF IT OF SECTION 10A WOULD ALSO BE AVAILABLE EVEN WHEN AN EXISTING UNIT GETS C ONVERTED INTO A STPI UNIT. IN FACT, THE MATERIAL ON RECORD DISCLOSES THA T NO EXPORT OF COMPUTER SOFTWARE WAS MADE BEFORE 04.08.2004. THE EXPORT COM MENCED ONLY AFTER 04.08.2004. THE INVOICES PRODUCED IN THE CASE CLEAR LY ESTABLISH THE SAID FACT. IN THESE CIRCUMSTANCES, THE APPELLATE AUTHORI TY AS WELL AS THE TRIBUNAL WERE JUSTIFIED IN EXTENDING THE BENEFIT OF SECTION 10A TO THE UNIT IN QUESTION. 5. WE DO NOT SEE ANY ILLEGALITY COMMITTED BY THEM. THE SAID FINDING RECORDED BY THE APPELLATE AUTHORITY AS WELL AS THE TRIBUNAL IS ALSO BASED ON EVIDENCE AND IS IN ACCORDANCE WITH LAW. WE DO NOT S EE ANY SUBSTANTIAL QUESTION OF LAW THAT ARISES FOR CONSIDERATION IN TH IS APPEAL. ACCORDINGLY, THE APPEAL IS DISMISSED. 10. OTHER DECISIONS RELIED UPON BY THE LD. AR OF T HE ASSESSEE ARE ALSO FOUND TO BE SUPPORTIVE OF THE DECISION TAKEN BY THE LD. CIT(A) WHEN NO DISTINGUISHING FEATURE IS POINTED OUT OR NOTICED AND OTHERWISE, THE ISSUE IS FOUND TO BE COVERED AGAINST THE REVENUE. IN THE ABSENCE OF ANY INFIRMITY OR FLAW IN THE ORDER OF THE LD. CIT(A) AND FOLLOWING THE RATIO OF DECISION AS PER PRECEDENTS R ELIED UPON, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 11. SINCE THE CROSS OBJECTION OF THE ASSESSEE IS I N SUPPORT OF THE ORDER OF THE LD. CIT(A), WHICH HAS BECOME INFRUCTUOUS AND THE SAME I S DISMISSED. 12. AS REGARDS APPEAL OF THE REVENUE FOR THE ASSES SMENT YEAR 2007-08 IN ITA NO. 729/MDS/2011 IS CONCERNED, IT WAS CONTENDED BY BOTH THE SIDES THAT THE FACTS AND ISSUE ITA ITA ITA ITA NO NONO NOS SS S. .. . 8 88 83 33 3 & & & & 729 729729 729/MDS/ /MDS/ /MDS/ /MDS/11 & 11 & 11 & 11 & CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 CO NO. 26/MDS/11 8 INVOLVE FOR THE YEAR UNDER CONSIDERATION IS SAME AS FOR THE ASSESSMENT 2006-07 AND THE DECISION TO BE TAKEN IN 2006-07 SHOULD BE APPLIED H ERE. 13. AFTER HAVING HEARD BOTH THE SIDES AND CONSIDER ING THE MATERIAL ON RECORD, WE FIND THAT THE ISSUE INVOLVED IS IDENTICAL AND FACTS ARE SIMILAR AS IN THE APPEAL FOR THE ASSESSMENT YEAR 2006-07 IN WHICH, WE HAVE DISMISSED THE APPEAL OF THE REVENUE ON THIS POINT IN EARLIER PART THIS ORDER, THEREFORE, A PPLYING THE SAME BASIS AND ADOPTING SIMILAR REASONING, WE UPHOLD THE ORDER OF THE LD. C IT(A) AND DISMISS THIS APPEAL OF THE REVENUE ALSO. 14. AS A RESULT, BOTH THE APPEALS OF THE REVENUE A ND THE CO OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED SOON AFTER THE CONCLUSION OF HEARI NG ON 01.06.2011. SD/- SD/- (ABRAHAM P. GEORGE) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER VM/- DATED : 01.06.2011. COPY TO: THE ASSESSEE//A.O./CIT(A)/CIT/D.R.