ITAT allows set off of losses between units for 2003-04

The ITAT upheld the CIT(A)'s decision allowing the set off of losses of the 10B unit against profits of the non-10B unit for the assessment year 2003-04. The ITAT remitted the issue back to the Assessing Officer for fresh consideration based on relevant judgments, ultimately confirming the CIT(A)'s finding and dismissing the Revenue's appeal.

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Issues involved: Appeal by Revenue against CIT(Appeals) order for assessment year 2003-04 regarding setting off losses of 10B unit against profits of non-10B unit.

Summary:
The Revenue filed an appeal against the CIT(A) order directing the assessing officer to set off losses of the 10B unit against profits of the non-10B unit for the assessment year 2003-04. The Revenue contended that the CIT(A) erred in his decision and that the losses from the exempted units should only be carried forward vertically to be set off against the profits of the same unit. The Hon'ble ITAT remitted the issue back to the Assessing Officer for fresh consideration based on relevant judgments. The Revenue argued that the Assessing Officer should disallow the claims if the decisions of the Tribunals were not accepted. However, the learned CIT(A) and the authorized representative supported the decision in favor of the assessee based on the Third Member decision and the High Court judgment. The ITAT confirmed the CIT(A)'s finding, citing that the issue was covered by previous decisions, and dismissed the Revenue's appeal. The order was pronounced on 18/11/2011.

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