2020 (4) TMI 396

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....ment year 2014-15. The effective grounds raised in the appeal of the assessee are that the Assessing Officer and the DRP have erred in law in not allowing the deduction under section 10AA of the Act and computation of tax payable and levy of interest under section 234D of the Act. 2. Brief facts of the case are that the assessee filed its return of income for the assessment year 2014-15 on 29.11.2014 declaring NIL income under normal provisions and Rs..25,97,04,632/- under section 115JB of the Act. The return filed by the assessee was processed under section 143(1) of the Act and selected for scrutiny. Against statutory notices, the assessee furnished the details as called for. After considering the submissions and accounts of the assess....

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....ing paper book filed by the assessee. The point at issue for consideration is whether the deduction claimed under section 10AA of the Act has to be allowed first and thereafter set off brought forward losses and unabsorbed depreciation from remaining profit, if any, or not. Similar issue was subject matter in appeal before the Tribunal in the case of JCIT v. Lotus Footwear Enterprises Ltd. (assessee's sister concern), wherein, the issue was decided in favour of the assessee by following the decision in the case of CIT v. Yokogawa India Ltd. (supra). We have gone through the case law and the relevant findings of the Hon'ble Supreme Court are reproduced as under: "16. From a reading of the relevant provisions of Section 10A it is mor....

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.... carry forward contained in Sections 70, 72 and 74 of the Act would be premature for application. The deductions under Section 10A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the assessee from the gross total income. The somewhat discordant use of the expression "total income of the assessee" in Section 10A has already been dealt with earlier and in the overall scenario unfolded by the provisions of Section 10A the aforesaid discord can be reconciled by understanding the expression "total income of the assessee" in Section 10A as 'total income of the undertaking'. 18. For the aforesaid reasons we answer the appeals and the questions ar....