2009 (3) TMI 1008

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....two issues, namely,- (1) whether the learned CIT(A) erred in directing the Assessing Officer to set off the loss of EOU of Rs. 59,98,640/- against the profit of other units; (2) whether the CIT(A) erred in deleting the disallowance made u/s. 14A by the Assessing Officer. 3. First, let us take up the issue relating to set off the loss of EOU against the profit of other units. The brief facts of the case are that the Assessing Officer found that the assessee claimed set off of loss of Rs. 59,98,640/- relating to EOU which was entitled to deduction u/s. 10A of the IT Act Against taxable profits. The Assessing Officer was of the opinion that as per section 14A, any expenditure incurred in relation to income which does not form part of ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ue is aggrieved and in appeal before us with this issue. 5. At the time of hearing, the learned DR reiterated the contents of the assessment order as his submission. In short, his arguments were that the income exempted u/s. 10A is not carried to gross total income and in the same way, the loss also cannot be taken to gross total income. He relied on the decision of Bangalore Bench of the Tribunal ACIT vs. Yokogawa India Ltd. (2007) 111 TTJ (Bang) 548. 6. Per contra, the learned counsel for the assessee submitted that the amended provisions of section 10A substituted with effect from 01.04.2001 provide for a deduction from the income and not exemption. He contended that the profits of Unit eligible for deduction u/s. 10A would form pa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nst the profits of other units of the assessee. In the case of Mindtree Consulting (P) Ltd. vs. ACIT (supra), it was held that loss from a unit eligible for exemption u/s. 10B as amended w.e.f. 1st April, 2000, is available for set off u/s. 70 and 71; section 10B(6)(ii) restricts carry forward and set off of loss u/s. 72 and 74 only and not intra-head set off u/s. 70 and inter-head set off u/s. 71. It is noted that in this case, the Tribunal has relied on the Third Member decision of Mumbai Bench of the Tribunal in the case of Navin Bharat Industries Ltd. vs. DCIT (2004) 90 ITD 1 (Mumbai) (TM) wherein it has been held that "coming to the applicability of section 10A(4)(ii), it puts interdict qua sections 72 and 74. It does not preclude the ....