TaxTMI 
TaxTMI 
2015 (11) TMI 1522
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....d out that the issue raised in the present appeal is squarely covered by the order of Tribunal in M/s. Vishay Components India Pvt. Ltd., Vs. Addl.CIT in ITA No.551/PN/2014 and Addl.CIT Vs. M/s. Vishay Components India Pvt. Ltd. in ITA No.736/PN/2014, relating to assessment year 2005 -06, order dated 08.10.2015, which in turn has been followed in Precision Camshafts Limited Vs. ACIT in ITA No.70/PN/2012 and ACIT Vs. Precision Camshafts Limited in ITA No.72/PN/2012, relating to assessment year 2007-08, order dated 10.11.2015. The learned Authorized Representative for the assessee pointed out that the issue raised in the present appeal is covered by grounds of appeal No.1 and 7 and rest of the grounds of appeal raised are argumentative in nat....
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....off of the aforesaid brought forward losses and unabsorbed depreciation. The assessee had declared business income at Rs. 7.35 crores, against which it had claimed deduction under section 10A of the Act at Rs. 7.09 crores and against balance income of Rs. 26,40,767/-, brought forward losses were adjusted and the income was declared at Rs.Nil. The Assessing Officer was of the view that the deduction under section 10A of the Act was permissible out of total income which could be computed only after applying all the provisions of the Act, including set off of brought forward losses. In view thereof, the deduction claimed by the assessee only out of profits and gains of the business without first setting off of brought forward losses, was held ....
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....rom the total income. The issue arising before us is whether while computing deduction under section 10B of the Act, in cases where the assessee has unabsorbed losses or depreciation, brought forward from earlier years, then whether the said unabsorbed business losses / depreciation are to be adjusted from the gross total income before allowing the deduction under section 10B of the Act or the said losses or the deduction under section 10B of the Act is to be allowed in the hands of the assessee without considering the brought forward unabsorbed losses / depreciation, which can be set off against the other income of assessee. Both the authorities below had denied the claim to the assessee, in view of the ratio laid down by the Hon'ble Supre....
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....e seeks to attain is to telescope the provisions of Chapter VI-A in the content of the deduction which is allowable under s.10A, which would not be permissible unless a specific statutory provision to that effect were to be made. In the absence thereof, such an approach cannot be accepted. Thus 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 s.10A of the Act cannot be set off against the current profit of the eligible unit for computing the deduction under s.10A of the IT Act." 28. The said proposition of law has further been applied by the Hon'ble Bombay High Court in CIT Vs. M/s. Ganesh Polychem Ltd. in Income Tax Appeal No.2083 of 20....
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....ion 10A of the Act was to be computed in the hands of assessee and the same was whether the brought forward losses had to be adjusted before computing deduction under section 10A of the Act. It may be pointed out that the provisions of section 10A and 10B of the Act are at parametria. Following the ratio laid down by the Hon'ble Bombay High Court, we hold that the deduction under section 10B of the Act is to be computed in the hands of the assessee before adjusting brought forward unabsorbed losses / depreciation. The ground of appeal No.3 raised by the assessee is thus, allowed." 6. The said ratio laid down by the Tribunal was later applied while deciding similar issue in Precision Camshafts Limited Vs. ACIT (supra). The Tribunal vide ord....
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....Act, which admittedly is paramatria to section 10B of the Act and hence, the ratio laid down by the Tribunal in M/s. Vishay Components India Pvt. Ltd., Vs. Addl.CIT (supra) and Precision Camshafts Limited Vs. ACIT (supra), is squarely applicable. 8. Another aspect to be considered in the present case is the arguments of the learned Departmental Representative for the Revenue that the ratio is covered by the decision of Hon'ble Karnataka High Court in CIT Vs. Himatsingka Seida Ltd. (supra), appeal against which, has been dismissed by the Hon'ble Supreme Court. Before the Hon'ble Karnataka High Court, the years involved were assessment years 1988-89 to 1990-91 i.e. the year, where the benefit under section 10B of the Act was exempt. The Trib....