TaxTMI 
TaxTMI 
2019 (1) TMI 1015
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the provisions of statute, wherein, the issue at hand should have been decided by learned CIT (A) only and thus, the said direction of learned CIT (A) is misconceived and misplaced in law. 1.2. That in doing so, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the basic fact that appellant company is an approved SEZ unit duly registered under Special Economic Zones Act, 2005, and thus, for all purposes is construed as a SEZ unit located in a territory outside India and as such, all sales made to other units within SEZ zone and also exports made through third parties are deemed to be construed as export sales, eligible to claim exemption under section 10AA of the Act. 1.3. That the learned Commissioner of Income Tax (Appeals) further failed to appreciate the basic fact that provisions of SEZ Act, 2005 overrides the provisions of Income Tax Act and as such, sales made to units located within same SEZ and also through third parties were eligible to claim exemption under section 10AA of the Act and thus, the disallowance so made and sustained is misconceived and misplaced in law and should be deleted, as such. 2. That the learned Commissioner of Inco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring assessment year in question the assessee has filed his return of income through e filling and has claimed the exemption of profits u/s 10AA. The Assessing Officer added a sum of Rs. 1,55,00,500/- claimed as Bad Debts by the Assessee in the total Income. During the course of Assessment proceedings documents were produced before the Assessing Officer by the assessee company to justify the claim of Bad Debts which was claimed in profit and loss account. But the Assessing Officer disallowed the same and made addition of Rs. 1,55,00,500/- under the head bad debts. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted as regards Ground Nos. 1 to 1.3 that the issue is squarely covered by the decision of the Tribunal in assessee's own case for Assessment Year 2008-09 & 2009-10 for ITA Nos. 5795 & 5796/Del/2014 order dated 28/8/2017. As regards Ground Nos. 2 to 2.2, the Ld. AR submitted that the bad debts has been written off in the present year and in the remand report for Assessment Year 2010-11, the same has been accepted by the Assessing Officer. The Ld. AR relied upon the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ts in Section 32(2) of the Act but the A.O has completely ignored the clarifications and thereby denied the availability of carry forward of unabsorbed depreciation of Rs. 1,94,082/-. In fact, the CBDT Circular No. 7 of 2003-Explanatory Notes on provision relating to Director Taxes 05.09.2003, vide Para 20 provided for carry forward of business losses and unabsorbed deprecation to units in Special Economic Zones and 100% Export Oriented Units u/s10A and 10B, with a view to rationalize the existing tax incentives in respect of such units under sub section (6) in Section 10A and 10B, retrospectively w.e.f. 1/4/2001 and had been made applicable to business losses or unabsorbed deprecation arising in A.Y 2001-02 and subsequent years i.e. unabsorbed depreciation for A.Y 2000-01 and subsequent years i.e. unabsorbed depreciation for Assessment Year 2000-01 shall not be carried forward an set off but unabsorbed depreciation relating to Assessment Year 2001-02 to Assessment Year 2009-10 can be carried forward and set off as per the provisions of I.T Act (Section 7(d) & 8(a) of Circular/Finance Act, 2003- Explanatory Notes on provisions relating to Director Taxes [Circular No. 7/2003 dated 5....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 30/10/2015 and the relevant findings are reproduced herein below:- "5. We find that similar issue came up in A.Y. 2006-07 in assessee's own case wherein following the decision of the ITAT in ITA No. 509/JP/2011 in the case of Goenka Diamond & Jewellers Ltd. the issue has been decided in favour of the asssessee by observing as under: - "We noted that learned CIT(A) has taken into considering the aspect and observation of the AO that deduction under Section 10AA is not allowable for the reason that the assessee has not carried out any manufacturing activity but has done trading of goods only. For this purpose, learned AO has placed reliance on the order of Hon'ble Delhi High Court. Learned CIT(A) has taken into consideration these observation of the AO and thereafter he found that the Government of India has issues a circular No.17 of 29.5-2006, which was issued by Export Promotion Council For EOUs & SEZ Unit (Ministry of Commerce & Industry, ITA No. 2793/Mum/2012 M/s. Diamonds 'R' US Government of India). The contents of the Circular have also been incorporated in the finding of the learned CIT(A), which have also been reproduced somewhere above in this order.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act under Section 51, it has been clearly provided that the provision of ITA No. 2793/Mum/2012 M/s. Diamonds 'R' US SEZ Act will override the provision of any other Act, meaning thereby the provision provided under the SEZ Act has to override on the provision of Section 10AA of the Income Tax Act. Under the rules, it is not provided but under Section 51 of the SEZ Act, it is provided, therefore, in our view, the contention raised by the learned DR is not tenable. Moreover, the issue is squarely covered by the decision of the coordinate Bench in the case of Goenka Diamonds and Jewellery Limited (supra). Therefore, respectfully following the decision of the Tribunal in the case of Goenka Diamonds and Jewellery Limited (supra) and in view of the reasoning given by the learned CIT(A), we confirm his order." 6. Nothing contrary was brought to our knowledge on behalf of Revenue. The fact being similar, following the same reasons we uphold the order of the CIT(A) who has allowed the claim of assessee of deduction under section 10AA of the Act. 11. The said decision has also been followed by the ITAT 'C' Bench Mumbai in the case of M/s. Osian Vs. ITO in ITA No. 1650/Mum/2015....