2011 (7) TMI 1143 - HC - Income Tax

Court upholds ITAT's set off decision, dismisses loan issue, rejects interest liability computation, and affirms amendment clarification.

The Court upheld the ITAT's decision to allow set off of 10A unit losses against business profits, dismissed the issue of write off of loans given to ... - Issues involved: 1. Set off of 10A unit losses against business profits.2. Write off of loans given to employees.3. Computation of interest liabilities under Section 234B and 234C.4. Amendment to Explanation 1 to section 234B and 234C.Set off of 10A unit losses against business profits: The Revenue raised questions regarding the ITAT's direction to allow set off of 10A unit losses against business profits, contrary to the provisions of sub-section (6) of section 10A. The Court referred to a previous judgment where a similar issue was decided against the Revenue. Consequently, the first two questions raised by the Revenue were not entertained.Write off of loans given to employees: The Tribunal found that the assessee had advanced loans to employees in the ordinary course of business, and these loans had become unrecoverable as the employees were no longer with the company. The Court noted that this was a factual finding, and no substantial question of law arose from the Tribunal's order. Therefore, this issue was dismissed.Computation of interest liabilities under Section 234B and 234C: Similar questions raised by the Revenue in a previous case were rejected by the Court, and for the same reasons, the questions regarding the computation of interest liabilities under Section 234B and 234C could not be entertained in this case.Amendment to Explanation 1 to section 234B and 234C: The ITAT's decision regarding the amendment to Explanation 1 to section 234B and 234C was upheld, stating that the amendment made explicit what was already implicit and was clarificatory in nature. The Court found no error in the ITAT's decision on this matter.