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Income Tax Appellate Tribunal, DELHI BENCH NEW DELHI
O R D E R PER PRASHANT MAHARISHI, A. M.
This appeal is filed by revenue against the order of Commissioner of income tax (appeals) – II Dehradun wherein it is held that the activity of the assessee in providing plant and machinery, technology, designing and engineering, supervision in respect of the contract would make it eligible for exemption under section 10 A of the income tax act.
Brief facts of the case is that the assessee is a non resident company engaged by the ONGC under its contract along with auto clean plants and equipments for processing pipelines for anti corrosion and concrete weight quoting with the help of automatic plant and machinery procured from Saudi Arabia. During the year the assessee has shown receipt of US$ 1877682.97 from ONGC Ltd. and claimed deduction u/s 10A of the Act being receipt derived from activities exclusively carried out in Kandla Free Trade Zone. It is claimed that it is satisfying all the conditions of section 10A of the Act. Before the Assessing Officer the assessee submitted contract copies based on which the ld Assessing Officer was of the view that another consortium partner M/s. Oto Klian has executed the Job and the assessee has only supplied plant and machinery supervision design and engineering activities and in fact the quoting work was done by Oto Klian. As the assessee has not set up any industrial undertaking at free trade zone according to the ld Assessing Officer benefit u/s 10A of the Act was denied. Against this the assessee preferred an appeal before the ld CIT(A) who allowed the claim of the assessee and therefore revenue is in appeal before us.
Ld Departmental Representative submitted that according to provisions of section 10A of the Income Tax Act profits are derived from the export of articles or things are exempt from tax if conditions stated under sub- section 2 and 3 are satisfied. According to him assessee is not carrying on any manufacturing activity or production activity therefore, it does not satisfy the conditions of sub-section 2 and further the goods are not exported out of India, therefore, deduction u/s 10A is not available to the assessee. The ld CIT(A) has granted the deduction without looking at the provisions of section 10A and held that appellant was fully interested with the execution of the contract. It is irrelevant whether Oto Klian has been allowed exemption or not. In view of this he submitted that order of the ld CIT(A) may be set aside and order of ld Assessing Officer may be restored.
Despite notice none appeared on behalf of the assessee and therefore, the issue is decided on merits and material available on record.
The provisions of section 10A applies to an undertaking which satisfies the condition prescribed under section 10A(2) of the Act which provides that undertaking begins to manufacture or produce article or thing. The ld CIT(A) has simply gone on the basis of written submission filed by the