Held that the execution of work in a unit in respect of contract entered with any of its clients should not be a reason to reject the deduction claimed under section 10A of the Act. As regards Unit 2 the Tribunal deemed it fit to restore this issue to the file of the AO, given that the AO had not examined this issue by considering factual aspects presented before the Tribunal which consisted of-details of seating capacity and other infrastructure facilities pertaining to the units in question. Held that when all the undertaking are eligible for deduction under section 10A then the gain or loss from forward contract is eligible for deduction under section 10A. Thus, the direction to the AO, to grant the benefit of deduction under section 10A of the Act in respect of disallowance of marked-to-market losses. (AY. 2009-10)
Dell International Services India (P.) Ltd. v. JCIT (2022) 94 ITR 247 (Bang.)(Trib.)
S. 10A : Free trade zone-New unit-The execution of work in a new unit when the agreement of any of its client pre-dates the operational date of the new unit, forms no basis for rejection of the deduction u/s 10A of the Act-Matter remanded-If the forward contracts entered into by the assessee are fully backed by the export then the gain or loss on such forward contracts, would be regarded as business income and the same is deductible under the section, for an eligible unit. [S. 43(5)]