THE COMMISSIONER OF INCOME-TAX vs. M/S APTUIT INFORMATICS INDIA PVT LTD

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ITA/22/2014HC KarnatakaKAHC01004618201425 June 2020Bench: ALOK ARADHE,M.NAGAPRASANNA5 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the assessee was entitled to the benefit of deduction under Section 10A. This was based on previous judgments of the same court which ruled in favor of the assessee on similar substantial questions of law.

What were the facts?

The Revenue appealed against an ITAT order allowing the assessee to claim deduction under Section 10A. The assessee acquired an STPI license from a sister concern, and the Revenue argued this was not a valid continuation of business for Section 10A benefits.

What were the issues?

Whether acquiring an STPI license from a sister concern constitutes a continuation of business for Section 10A deduction, and whether the assessee violated the conditions of Section 10A(2)(ii) and 10A(7A).

Which sections of the Income-tax Act were involved?

Section 10A,Section 10A(2)(ii),Section 10A(7A)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 25TH DAY OF JUNE, 2020

PRESENT

THE HON'BLE MR. JUSTICE ALOK ARADHE

AND

THE HON'BLE MR. JUSTICE M. NAGAPRASANNA

INCOME TAX APPEAL NO.22 OF 2014

BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX C.R.BUILDING, QUEENS ROAD, BENGALURU.

2.

THE INCOME TAX OFFICER, WARD - 11(1), RASHTROTHANA BHAVAN, NRUPATHUNGA ROAD, BENGALURU. ... APPELLANTS (BY SRI K.V. ARAVIND, ADV.)

AND:

M/S APTUIT INFORMATICS INDIA PVT. LTD., (NOW MERGED WITH LAURUS LABS PVT. LTD.,) PLOT NO. 100/101,

2 EXPORT PROMOTION INDUSTRIAL PARK WHITEFILED, BENGALURU – 560 066.

... RESPONDENT

(BY SRI NAGESWAR RAO AND SRI ARUN SRI KUMAR, ADVS.)

THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED: 08.08.2013 PASSED IN ITA NO.219/BANG/2013, FOR THE ASSESSMENT YEAR 2008-2009 PRAYING TO:

i. FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE.

ii. ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BENGALURU IN ITA NO.219/BANG/2013 DATED 08.08.2013 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD – 11(1), BENGALURU.

THIS INCOME TAX APPEAL COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., MADE THE FOLLOWING: JUDGMENT

Sri K.V.Aravind, learned counsel for appellants – Revenue.

Sri Nageshwar Rao, learned counsel for respondent – assessee through video conference.

This appeal is filed under Section 260A of the Income Tax Act, 1961, by the Revenue, being aggrieved by the order dated 08.08.2013 passed by the Income Tax Appellate Tribunal, Bengaluru, in ITA.No.219/Bang/2013.

2.

The appeal was admitted vide order dated 04.07.2014, for considering the following substantial questions of law:

“1. Whether the Tribunal on the facts and in the circumstances of the case and in Law was correct in holding that the assessee is entitled to the benefit of deduction u/s 10A even though there is no continuation of business by the assessee as the STPI unit was taken over by way of acquiring the STPI license from its sister concern and not

4 by way of amalgamation or merger as per section 10A (7A)?

2.

Whether the Tribunal on the facts and in the circumstances of the case and in Law was correct in holding that the assessee company has not violated the conditions stated in Section 10A(2)(ii) and 10A(7A) and it was only an organizational change without a change in the place, form or business of the unit?”

3.

Similar substantial questions of law were framed in I.T.A.No.293/2012, wherein, this Court by order passed today, has answered the aforementioned substantial questions of law in favour of the assessee and against the Revenue, in view of the judgments dated 14.11.2018 passed by a Division Bench of this Court in I.T.A.No.4/2011 and I.T.A.No.368/2010.

4.

For the reasons assigned in the aforesaid judgments, the substantial questions of law are

5 answered in favour of the assessee and against the Revenue. However, it is clarified that the benefit of deduction under Section 10A of the Income Tax Act, 1961, shall enure to the assessee for the unexpired period.

5.

Accordingly, the appeal is disposed of.

Sd/- JUDGE

Sd/- JUDGE

nvj

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