TaxTMI 
TaxTMI 
2007 (7) TMI 365
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.... assessee is engaged in the business of providing software services and had claimed deduction under section 10B to the extent of 90 per cent. of the profits from the undertaking which were eligible for deduction under section 10B. Against the balance profits the assessee had claimed set off of losses from earlier years amounting to Rs. 34,16,275. In response to the query, why losses pertaining to the assessment years 1997-98 and 1999-2000 should be allowed to be set off against the balance income, it was submitted before the Assessing Officer as under : "In the assessment year 2003-04, we were eligible to claim 10B deduction for 90 per cent. of the eligible income and the balance 10 per cent. became taxable as business income. In such a s....
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....ew that both the actions of the appellant are not in accordance with the specific provisions of section 10A/10B of the Act. The provisions of section 10A/10B in my view cannot be mixed up with the general provisions of the Act. Section 10A/10B(6) has been specifically amended from April 1, 2001, by which specific provisions have been made for carry forward and set off of losses of 10A/10B eligible units. It has been specifically pro vided under clause (ii) of section 10A/10B(6) that no loss referred under section 72 or 74 as far as it pertains to the business of the undertaking shall be carried forward and set off if such loss relates to any of the relevant assessment years ending before April 1, 2001. In other words, any loss pertaining ....
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....n the case of the assessee (order is in the name of M/s. Vetri Software India Ltd., which was the former name of the assessee) in I. T. A. No. 1921/Mds/03 dated June 16, 2004, has allowed the carry forward of business loss from domestic business at Rs. 39,13,763. He submitted that once such loss was held to be belonging to the domestic business of the assessee, the same should have been allowed now. According to him, section 10B(6)(ii) does not prohibit such set off because that clause refers to the loss belonging to the undertaking eligible for section 10B and not to the other business. He also submitted that section 10B has been amended by the Finance Act, 2002, with effect from April 1, 2003, and the assessee is now entitled only to 90 p....
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.... to only the loss incurred in the undertaking. The undertaking has to be understood separately from the business of the assessee. Undertaking in the context of section 10B would only mean the export-oriented undertaking which is eligible for the benefits under section 10B. There may be cases where the assessee had various businesses and one of the businesses could be export-oriented undertaking which is eligible for the benefits of section 10B. Now if there are profits in such other businesses, they will not be eligible for the benefits of section 10B. Similarly, if there are losses, they cannot also be allowed to be set off against the profits determined in respect of such eligible undertakings. However, the profits and losses of the busin....
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....by application of the provisions of this section as it stood immediately before its substitution by the Finance Act, 2000, the undertaking shall be entitled to the deduction referred to in this subsection only for the unexpired period of aforesaid ten consecutive assessment years : Provided further that for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent. of the profits and gains derived by an undertaking from the export of such articles or things or computer software." 9. The section has clearly employed the expression " deduction" though section 10B is contained in Chapter III which deals with the incomes which do not form part of total income, but still at leas....