TaxTMI 
TaxTMI 
2014 (7) TMI 4
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....10B of the Income Tax Act, 1961 was claimed to the extent of Rs. 18,13,09,250/-. The assessee had brought forward business loss aggregating to Rs. 15,48,41,315/- pertaining to earlier years and after setting off the said loss against the balance business profits amounting to Rs. 5,09,58,098/-, the balance loss of Rs. 10,38,67,217/- was carried forward by the assessee. The assessee had also declared brought forward unabsorbed depreciation aggregating to Rs. 41,07,46,592/- and after adjusting the same against income from other sources declared for the year under consideration to the extent of Rs. 8,46,590/-, the balance unabsorbed depreciation amounting to Rs. 40,99,00,002/- was carried forward by the assessee. According to the A.O., as per the provisions of section 72(2) read with section 32(2) of the Act, the brought forward loss and unabsorbed depreciation was liable to be set off first against the income from profits and gains of business or profession before allowing the deduction u/s 10B of the Act. He therefore set off the entire brought forward business loss of Rs. 15,48,41,315/- and unabsorbed depreciation to the extent of Rs. 7,74,24,033/- against the income of Rs. 23,22,65....
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....ess or profession" before allowing its claim for deduction u/s 10B of the Act. The ld. CIT(A) did not find merit in the preliminary issue raised by the assessee challenging the validity of assessment made by the A.O. u/s 143(3) r.w.s. 147 of the Act and decided the same against the assessee for the reasons given in para 4 and 4.1 of his appellate order for A.Y. 2004-05. As regards the other issue relating to assessee's claim for deduction u/s 10B of the Act, reliance was placed by the assessee on the decision of the Tribunal passed in assessee's own case for A.Y. 2005-06 vide order dated 29-6-2012 wherein a similar issue was decided by the Tribunal in favour of the assessee relying on the decision of Hon'ble Bombay High Court in the case of CIT vs. Black & Veatch Consulting (P) Ltd. (ITA No. 1237 of 2011) and the decision of Hon'ble Karnataka High Court in the case of ACIT vs. M/s Yokogawa India Ltd. Although the ld. CIT(A) took note of this decision of the Tribunal in assessee's own case for A.Y. 2005-06 on a similar issue, he found that in the case of Black & Veatch Consulting (P) Ltd. (supra) relied upon by the Tribunal, the Hon'ble Bombay High Court had only held that deduction....
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....ppeal for A.Y. 2006-07, the solitary issue raised by the assessee is the same as raised in ground No. 2 to 6 in the assessee's appeal for A.Y. 2004-05 relating to its claim for deduction u/s 10B of the Act from the profits of the eligible unit as computed before allowing the set off of the brought forward unabsorbed depreciation. 8. As regards the common issue involved in both the appeals of the assessee relating to deduction u/s 10B of the Act, the ld. Counsel for the assessee submitted that the same is squarely covered by the decision of the Tribunal for A.Y. 2005-06 rendered vide its order dated 29-06-2012 passed in ITA No. 7040 to 7042/Mum/2011 wherein it was held, relying inter alia on the decision of Hon'ble Bombay High Court in the case of CIT vs. Black & Veatch Consulting (P) Ltd. (supra), that deduction u/s 10B of the Act is to be computed from the profit of eligible unit before setting off the brought forward business loss and unabsorbed depreciation. He contended that this decision of the Tribunal was cited on behalf of the assessee before the ld. CIT(A) and even after taking note of the same, the ld. CIT(A) preferred to follow the decision of Hon'ble Kerala High Court ....
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.... computing the total income of the assessee. He contended that although the Hon'ble Bombay High Court in the cases relied upon by the ld. Counsel for the assessee has taken a different view, the benefit of this circular was not available to the Hon'ble Bombay High Court. Relying on the decision of Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO (1981) 131 ITR 597(SC), he contended that the contemporaneous exposition of law in the Board circular should be given due weightage especially when the intention of such circular is to avoid any mischief. 10. In the rejoinder, the ld. Counsel for the assessee submitted that the interpretation by the CBDT in the circular issued in 2013 is adverse to the assessee and such adverse circular can be applied only prospectively and not retrospectively. He also contended that the said circular explains the understanding of relevant provisions of law of CBDT and the same cannot substitute the interpretation given by the Hon'ble Bombay High Court. 11. We have considered the rival submissions and also perused the relevant material on record. It is pertinent to note here that the ld. CIT(A) vide his impugned orders has already held, relying ....