TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 410
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.... at Rs. 26,79,480/. Thus, in the revised return, the Assessee withdrew its claim of deduction under section 10A of the IT Act and instead, claimed set off of unabsorbed business loss brought forward from assessment year 200203 against the profits of the erstwhile 10A unit. This claim for set off was disallowed by the Assessing Officer by his order dated 30th November, 2007. The ground of disallowance was that such claim of set off or brought forward business loss in the sum of Rs. 3,26,08,931/against the profits of the erstwhile 10A unit in the year under consideration, being the first assessment year, after the expiry of the tax holiday period, cannot be allowed. Since the unabsorbed loss of assessment year 200203 had been set off against the business profit of the 10A unit in the assessment year 200304 and 200405, there remains no loss for set off in the subject assessment year 200506. The Assessee, therefore, was aggrieved by such a finding and challenged the assessment order before the Commissioner of Income Tax (Appeals). The Assessee's Appeal was dismissed by the Commissioner on 16th August, 2010. The Bench of the Tribunal at Mumbai allowed the Appeal of the Assessee by t....
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....of the IT Act, to the extent relevant, reads as under:" 10A. (1) Subject to the provisions of this section, 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 beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee: Provided that where in computing the total income of the undertaking for any assessment year, its profits and gains had not been included 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 deduction referred to in this subsection only for the unexpired period of the aforesaid ten consecutive assessment years : Provided further that where an undertaking initially located in any free trade zone or export processing zone is subsequently located in a special economic zone by reason of conversion of such free trade zone or export processing zone into a sp....
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....nt credited to the Special Economic Zone Reinvestment Allowance Reserve Account is to be utilised- (i) for the purposes of acquiring new machinery or plant which is first put to use before the expiry of a period of three years next following the previous year in which the reserve was created; and (ii) until the acquisition of new machinery or plant as aforesaid, for the purposes of the business of the undertaking other than for distribution by way of dividends or profits or for remittance outside India as profits or for the creation of any asset outside India; (b)the particulars, as may be prescribed in this behalf, have been furnished by the assessee in respect of new machinery or plant along with the return of income for the assessment year relevant to the previous year in which such plant or machinery was first put to use. (1C) Where any amount credited to the Special Economic Zone Reinvestment Allowance Reserve Account under clause (ii) of subsection (1A),- (a) has been utilised for any purpose other than those referred to in subsection (1B), the amount so utilised; or (b) has not been utilised before the expiry of the period specified in subclause (i) of clause (a) of su....
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....subsection shall be deemed to have been received in India where such sale proceeds are credited to a separate account maintained for the purpose by the assessee with any bank outside India with the approval of the Reserve Bank of India. (4) For the purposes of subsections (1) and (1A), the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. (5) The deduction under this section shall not be admissible for any assessment year beginning on or after the 1st day of April, 2001, unless the assessee furnishes in the prescribed form, alongwith the return of income, the report of an accountant, as defined in the Explanation below subsection (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. (6) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant ....
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....l be admissible under this section to the amalgamating or the demerged company for the previous year in which the amalgamation or the demerger takes place; and (b) the provisions of this section shall, as far as may be, apply to the amalgamated or the resulting company as they would have applied to the amalgamating or the demerged company if the amalgamation or demerger had not taken place. (7B) The provisions of this section shall not apply to any undertaking, being a Unit referred to in clause (zc) of section 2 of the Special Economic Zones Act, 2005, which has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year commencing on or after the 1st day of April, 2006 in any Special Economic Zone. (8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under subsection (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant as....
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....or the purposes of this section. Explanation 3.- For the removal of doubts, it is hereby declared that the profits and gains derived from on site development of computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India. Explanation 4.-For the purposes of this section, "manufacture or produce" shall include the cutting and polishing of precious and semiprecious stones." 8) A perusal thereof reveals that it is a special provision in respect of newly established undertakings in free trade zone etc. Therefore, subject to the provisions of section 10A, 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 beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the Assessee. We are not as much concerned with the proviso and other subsections, save and except subsecti....