TaxTMI 
TaxTMI 
2017 (9) TMI 1095
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....IL income returned by the appellant. 2. That the Assessing Officer erred on facts and in law in reducing the link charges amounting to Rs. 15,89,95,369 from "the export turnover" by the virtue of clause (iv) of Explanation 2 of Section 10A of the Act, without making the similar adjustment from" the total turnover" resulting into absurd and unintended results. 2.1. That the Assessing Officer erred on facts and in law in, making the purported adjustment from "the export turnover, in failing to appreciate the fact that the said issue has already been decided by the Hon'ble ITAT in favor of the appellant for the Assessment Year 2004-05 and even the departmental appeal against the said order of the ITAT has been rejected by the Hon'ble Delhi High Court. 3. That the Assessing Officer erred on facts and in law in disallowing depreciation to the extent of Rs. 41,78,200 which the assessee had claimed on certain networking equipments / computer peripherals, covered under the Computers holding that the said items were eligible for depreciation as plant and machinery and not as computer. 3.1. That the assessing officer erred on facts and in law in ma....
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....ligible for deprecation @ 15% as against 25% applicable to the plant and machinery but AO also proceeded to conclude that the deduction u/s 10A of the Act is to be computed after setting off of brought forward losses and unabsorbed depreciation. AO has also disallowed carry forward of brought forward losses of Rs. 34,99,523/- and unabsorbed depreciation of Rs. 2,05,013/- for set off in subsequent years and has also not set off the unabsorbed depreciation against the interest income to the extent of Rs. 2,05,013/-. 3. Assessee carried the matter before the DRP by filing objections which have been dismissed by the ld. DRP. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. GROUND NO.1 5. Ground No.1 is general in nature and does not require any adjudication. GROUND NO.2 & 2.1 6. Bare perusal of the assessment order passed by the AO in not reducing the link charges amounting to Rs. 15,89,95,36....
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.... to repel the arguments addressed by ld. AR for the assessee contended that no general item / entry for machinery and plant, and scope of item "computers" has not been expanded, the scope of items "computers" has understood in normal connotation and if any particular is commercially being referred to or sold by a different name, it is not covered under the said item / entry i.e. "computers", and relied upon the decisions rendered by Hon'ble Supreme Court in case of Smt. Tarulata Shyam and Ors. vs. CIT - (1977) 108 ITR 345 (SC). 11. However, Hon'ble High Court of Delhi in CIT vs. BSES Rajdhani Powers Ltd. (supra) set the controversy at rest by allowing the depreciation of computer accessories and peripherals, such as, printers, scanners and server etc. forming integral part of the computer system without which computer cannot be used by making following observations :- "6. We are in agreement with the view of the Tribunal that computer accessories and peripherals such as, printers, scanners and server e form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are the part of....
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....eme Court in CIT vs. Yogokawa India Ltd. (supra) decided the issue in favour of the assessee by observing that in case of 100% export oriented undertaking, deduction is to be granted by computing gross total income of eligible undertaking under Chapter IV and not at stage of computation of total income under Chapter VI of the Act. Operative part of the judgment in CIT vs. Yogokawa India Ltd. (supra) is as under :- " Section 10A of the Income-tax Act, 1961as originally introduced, provided that any profits and gains derived by an assessee from an industrial undertaking to which the section applied shall not be included in the total income of the assessee. The amendment of the section by the Finance Act, 2000 with effect from April 1, 2001, specifically uses the words "deduction of profits and gains derived by an eligible unit... from the total income of the assessee". 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 determination of what is provided by the section as amended, in contrast to what was provided by the unamended section. The true and correct purport and effect of the amen....
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....ligible section 10A units, not contemplated by sections 80HHC and 80HHE, was intended by the Legislature. Such a benefit can only be understood by a legislative mandate to understand that the stages for working out the deductions under sections 10A and 80HHC and 80RHE are substantially different. From a reading of the relevant provisions of section 10A, it is more than clear that the deduction contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee. Circular No. 794, dated August 9, 2000 states in paragraph 15.6 that the export turnover and the total turnover for the purposes of sections 10A and 10B shall be of the undertaking located in specified zones or 100 per cent export oriented undertakings, as the case may be, and this shall not have any material relationship with the other business of the assessee outside these zones or units for the purposes of this provision. If the specific provisions of the Act (the first proviso to sub-....