2017 (6) TMI 6

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... That the Commissioner of Income Tax (Appeals) has erred in law and on facts of the case in deleting the disallowance of Rs. 7,33,82,804/- made by AO on account of exemption u/s 10B of the I.T. Act, 1961. 2.(a) The order of the CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves leave to add, alter or amend any fall of the ground of appeal before or during the course of the hearing of the appeal." 2. The brief facts qua issue involved are that, the assessee company is engaged in the business of Information Technology Education and Knowledge Solutions. The ld. Assessing Officer noted that the assessee has incurred loss of Rs. 7,33,82,084/- in respect of following two units which were eligible for deduct....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....empt income. This inter alia means that the income of eligible unit is deducted at source before arriving at gross total income and therefore, the income eligible for exemption under section kept in Chapter III would not form part of computation at all. Thus, the loss arising from eligible units is not available for set off against the income of non eligible units. He also tried to draw support from the CBDT's circular no. 7 of 2003 and decision of Hon'ble Bombay High Court in the case of Hindustan Uniliver Ltd. vs. DCIT reported in 325 ITR 102. He accordingly, disallowed the adjustment of loss of eligible units from the profit of non eligible units. 3. Before the Learned CIT(Appeals) a detailed submission were made by the assessee expla....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....it. It is an undisputed fact that the assessee had incurred losses from its two units which were eligible for deduction u/s 10B and the said losses have been adjusted against the profit of non-eligible units. We find that this precise issue has been dealt with by the Hon'ble Supreme Court after detailed discussion and analyzing the provisions of section 10A (similar to section 10B) as it stood prior to the amendment by Finance Act 2000 and also after the amendment w.e.f. 1.4.2001. The relevant observation and the ratio laid down by the Hon'ble Supreme Court reads as under:- "The retention of section 10A in Chapter III of the Act after the amendment made by the Finance Act, 2000 would be merely suggestive and not determinative of ....