2020 (9) TMI 968

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....t the appellant is not entitled to set off the loss of the Export Oriented Unit against the income in Domestic Tariff Area Unit contrary to the ratio of the Hon'ble High Court decision in the case of CIT Vs. Yokogawa India Limited and Ors. on the facts and circumstances of the case? (iii) Whether the Tribunal was justified in law in not adjudicating the ground No.3 related to the issue of the appellant not claiming deduction under Section 10B of the Act and consequently entitled for set off losses on the facts and circumstances of the case? (iv) Whether the Tribunal was justified in law in not adjudicating the grounds raised in respect of levy of interest under section 234B and 234D of the Act on the facts and circumstances of the case? 2. Facts leading to filing of this appeal briefly stated are that the assessee is a private limited company engaged in the business of manufacture and export of readymade garments. The assessee for the Assessment year 2008-09 filed the return of income declaring total income of Rs. 12,89,760/-. The assessee has three units and showed profit and loss from Units I to III. The assessee had set off losses of the units against the profits of the uni....

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....Circulars are binding on the authorities. It is also pointed out that similar issue has been decided by a bench of this court against the revenue by Income Tax Appellate Tribunal in 'MINDTREE CONSULTING P LTD., VS. ASSISTANT COMMISSIONER OF INCOME TAX and the aforesaid decision has been upheld by this court in 'COMMISSIONER OF INCOME TAX VS. YOKOGAWA INDIA LTD.,', (2012) 341 ITR 385. In support of aforesaid submissions, reference has also been made to decisions in 'CIT VS. YOKOGAWA INDIA LTD.,', 391 ITR 274 (SC), 'CIT VS. YOKOGAWA INDIA LTD', 341 ITR 385 (KARNATAKA), 'CIT VS. GALAXY SURFACANTS LTD', 343 ITR 108 (BOMBAY), 'MINDTREE CONSULTING (P) LTD VS. ACIT', 102 TTJ 691 (BANGALORE), 'HINDUSTAN UNILEVER LTD. VS. DCIT', 325 ITR 102 (BOMBAY), 'CIT VS. BALCK AND VEATCH CONSULTING (P) LTD', 348 ITR 72 (BOMBAY), 'CIT VS. SHANTIVIJAY JEWELS LTD', 374 ITR 520 (BOMBAY), 'CIT VS. CHESLIND TEXTILES LTD', 354 ITR 29 (KARNATAKA), 'CIT VS. MINDTREE CONSULTING LTD. IN ITA NO.797/2006 DATED 09.08.2011 and BOARD CIRCULAR 7/DV/2013 DATED 16.07.2013. 5. On the other hand, learned counsel for the revenue submitted that due date of filing the return under Section 139(1) of the Act was 30.09.2008. Ho....

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....admissible for any assessment year beginning on or after the 1st day of April 2001, unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-Section (2) of Section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section. Section 10B(6)(ii) Notwithstanding anything contained in any other provision of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment year, or of any previous year, relevant to any subsequent assessment year- (i) xxxxx (ii) no loss referred to in sub-section (1) of Section 72 or sub-Section (1) or sub- Section (3) of Section 74, in so far as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years ending before the 1st day of April 2001. Section 70(1) Save as otherwise provided in this act, where the net result for any assessment year in respect of any source falling under any head of income, o....

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....ure or produce. Section 10B does not contain any prohibition to prevent an assessee from setting off losses from one source against income from another source under the same head of income as prescribed under Section 70 of the Act. Section 10B(6)(ii) of the Act restricts carry forward and set off of loss under Sections 72 and 74 of the Act but does not provide anything regarding intra-head set off under Section 70 and inter-head set off under Section 71 of the Act. The business income can be computed only after set off of business loss against the business income in the year as per provisions of Section 70 of the Act. Section 10A of the Act is a code by itself and it is pertinent to note that Section 10A(6)(ii) does not preclude the operation of Sections 70 and 71 of the Act. Para 5.2 of the Circular issued by the Central Board of Direct Taxes dated 16.07.2013 clearly provides that income / loss from various sources i.e. eligible and ineligible units under the same head are aggregated in accordance with provisions of Section 70. 8. It is equally well settled legal proposition that where the assessee does not want the benefit of deduction from the taxable income, the same cannot be....