Section 10A deduction follows the amended regime; prior losses and depreciation set-off could not deny relief.

Deduction under section 10A had to be examined under the amended legal regime applicable to the assessment year, and the jurisdictional HC's binding view governed the issue. The Tribunal held that an earlier Karnataka decision, rendered under a different legal framework, did not control the result. On that basis, section 10A relief could not be denied merely because brought forward business losses and unabsorbed depreciation had not been set off first, and the Revenue's appeal failed while the relief granted to the assessee was sustained.

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Issues: Whether deduction under section 10A was to be allowed before setting off brought forward business losses and unabsorbed depreciation.

Analysis: The dispute was covered by the jurisdictional High Court's ruling that the relevant issue stood concluded against the Revenue. The earlier Karnataka decision relied upon by the Revenue was held to concern an earlier legal regime and was not applicable to the amended provision governing the year in question. In the absence of any contrary legal basis, the Tribunal followed the binding jurisdictional precedent and declined to interfere with the relief granted by the first appellate authority.

Conclusion: The issue was decided against the Revenue and in favour of the assessee, and deduction under section 10A could not be denied on the ground of prior set-off of brought forward losses and unabsorbed depreciation.

Final Conclusion: The Revenue's appeal failed and the order granting relief to the assessee was sustained.

Ratio Decidendi: Where the jurisdictional High Court has held that the amended section 10A regime governs the assessment year in question, deduction under section 10A is to be considered in accordance with that regime and an earlier contrary view under a different legal framework does not control the result.

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