Tribunal Upholds Decision Allowing Set Off of Brought Forward Losses, Rejects Revenue's Appeals.

The tribunal dismissed the Revenue's appeals, upholding the Ld.CIT(A)'s decision in favor of the assessee. The Ld.CIT(A) had correctly applied the Supreme Court's decision in CIT Vs. M/s. Yokogawa India Ltd., allowing the set off of brought forward losses under Sec.10A(6)(ii) without considering the carry forward of loss. Despite the Revenue's argument and the eligibility claim under Circular 3/2018, the tribunal found no grounds to overturn the Ld.CIT(A)'s order.

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Issues:
- Set off of brought forward losses under Sec.10A(6)(ii)
- Application of Supreme Court decision in CIT Vs. M/s.Yokogawa India Ltd.
- Interpretation of deduction u/s.10A while considering carry forward of loss
- Eligibility of appeal under Circular 3/2018 issued by CBDT
- Dismissal of appeals by Revenue

Set off of Brought Forward Losses under Sec.10A(6)(ii): The case involved appeals by the Revenue against the order of the Commissioner of Income Tax (Appeals) regarding the set off of brought forward losses by M/s.CSS Corp. Pvt. Ltd. The AO allowed set off for all years except AY 2000-01 under Sec.10A(6)(ii). The AO, through an order u/s.154, also denied the set off for AY 2000-01. The Revenue contested these decisions, leading to the appeals.

Application of Supreme Court Decision in CIT Vs. M/s.Yokogawa India Ltd.: The Ld.CIT(A) allowed the assessee's appeal by applying the decision of the Hon'ble Supreme Court in the case of CIT Vs. M/s.Yokogawa India Ltd. The Revenue challenged this decision on the grounds that the decision in M/s.Himatsingike Seida case was not overruled or discussed in the Yokogawa India Ltd case, emphasizing the treatment of unabsorbed losses of 10A/10B Units against other incomes.

Interpretation of Deduction u/s.10A while Considering Carry Forward of Loss: The Revenue argued that the Ld.CIT(A) erred in holding that deduction u/s.10A should be allowed without considering the carry forward of loss. They referenced the decision in the Yokogawa India Ltd case, contending that the deduction under Sec.10A should be considered while computing the gross total income of the eligible undertaking under Chapter IV of the Act.

Eligibility of Appeal under Circular 3/2018 issued by CBDT: The Revenue highlighted that although the tax effect was below the prescribed limits as per Circular 3/2018 issued by CBDT, an RAP objection had been accepted by the Department, making the appeal eligible under exception 10(c).

Dismissal of Appeals by Revenue: After hearing the rival submissions, the tribunal found no reason to interfere with the orders of the Ld.CIT(A) as the Ld.CIT(A) had correctly applied the decision of the Hon'ble Supreme Court. Consequently, the appeals filed by the Revenue were dismissed, upholding the decision of the Ld.CIT(A) in favor of the assessee.

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