TaxTMI 
TaxTMI 
2012 (12) TMI 522
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....year 2007-08. Shri K.B. Muralidharan, C.A. represented on behalf of the assessee and Dr. S. Moharana, CIT - DR represented on behalf of the Revenue. 2. Facts of the case are that the assessee company is engaged in the business of manufacturing and dealing in Hi-purity Fused Silica Stone, Quartz Gritz and generation of wind energy. For the assessment year 2007- 08, the assessee filed the return of income declaring income at NIL in the normal provisions of Act after claiming deduction under section 10B and Rs..67,68,121/- under the provisions of section 115JB of the Act. 3. The assessment was completed under section 143(3) of the Act accepting the income declared by the assessee. While completing the assessment, the Assessing Off....
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....India Ltd. & Ors. [246 CTR (Kar) 226], which support the claim of adjustment of unabsorbed deprcaition undertaken in the assessment order by the Assessing Officer while computing the relief allowable under section 10B of the Act. The counsel for the assessee submitted that the issue of allowability of deduction under section 10B before set off of carry forward losses or depreciation has been dealt with by the Hon'ble Karnataka High Court in the case of Yokogawa India Ltd. (supra) in a detailed manner and holding that such deduction should be allowed before set off of carried forward losses or unabsorbed depreciation. He further submitted that similar issue was dealt with by the Chennai Special Bench of the Tribunal in the case of Scientific....
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....nataka High Court in the case of CIT v. Yokagawa India Ltd. & Ors. (supra). The Hon'ble High Court held that the income of 10A unit has to be excluded at source itself before arriving at the gross total income and the losses of non 10A unit cannot be set off against the income of 10A unit under section 72. The Hon'ble High Court has held as under: "31. As the income of 10A unit has to be excluded at source itself before arriving at the gross total Income, the loss of non 10A unit cannot be set off against the income of 10A unit under s. 72. The loss incurred by the assessee under the head profits and gains of business or profession has to be set off against the profits and gains if any, of any business or profession carried on by such as....
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.... Income Tax Appellate Tribunal dated 20 April 2011. The Assessment Year to which the appeal relates is AY 2006-07. The following question of law has been raised by the Revenue: "(A) Whether on the facts and circumstances of the case and law, the ITAT was correct in holding that the brought forward unabsorbed depreciation and losses of the unit the Income which is not eligible for deduction under Section 10A of the Act cannot be set off against the current profit of the eligible unit for computing the deduction under Section 10A of the IT Act." 2. The Assessing Officer, during the course of the order of assessment under Section 143(3) observed as follows: "Under the scheme of the Act, the profits of the unit eligible for deduction unde....
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....he Tribunal held that the deduction under Section 10A in respect of the allowable unit under Section 10A has to be allowed before setting off brought forwarded losses of a non 10A unit. 3. Section 10A is a provision which is in the nature of a deduction and not an exemption. This was emphasised in a judgment of a Division Bench of this Court while construing the provisions of Section 10B in Hindustan Unilever Ltd V s. Deputy Commissioner of Income Tax2* The submission of the Revenue placed its reliance on the literal reading of Section 10A under which a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive Assessment Years is to be a....
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....substantial question of law and shall accordingly stand dismissed. There shall be no order as to costs". _________ 1. 129 TTJ 273 2. (2010) 325 ITR 102 at para 24 8. Therefore, as could be seen from the above decisions, the issue in appeal is decided in favour of the assessee by the Hon'ble Karnataka High Court in the case of CIT & Anr. Vs. Yokogawa India Ltd. & Ors. (supra) and the Hon'ble Bombay High Court in the case of CIT vs. Black & Veatch Consulting Pvt. Ltd. (supra). However, there is a contrary view expressed by the Hon'ble Kerala High Court in the case of CIT v. PASTSPIN India Ltd. (supra), wherein their Lordships held that allowability of deduction under section 10B has to be determined with reference to export tur....