2017 (11) TMI 2038

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....g that deduction under Section 10A of the IT Act was required to be allowed before adjusting the brought forward losses and unabsorbed depreciation?. 6.2. Whether on the facts and circumstances of the case, the ITAT is justified in holding that the income under Section 10A of the Act is an exemption not deduction?" 2. We have heard Ms. K. Mamatha, learned Senior Standing Counsel for the Income Tax Department and Mr. C.V. Narsimham, learned counsel for the respondent-Assessee. 3. First, we would like to deal with the substantial question of law framed under ground No.6.2. The Supreme Court in CIT VS. YOKOGAWA INDIA LIMITED [(2017) 2 SCC 1] held that Section 10A of the Income Tax Act, 1961 (for short, "the Act") as amended, is ....

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....the specific provisions of the Act provide [first proviso to Sections 10-A(1); 10-A(1-A) and 10-A(4) that the unit that is contemplated for grant of benefit of deduction is the eligible undertaking and that is also how the contemporaneous circular of the department (No.794 dated 9.8.2000) understood the situation, it is only logical and natural that the stage of deduction of the profits and gains of the business of an eligible undertaking has to be made independently and, therefore, immediately after the stage of determination of its profits and gains. At that stage the aggregate of the incomes under other heads and the provisions for set off and carry forward contained in Sections 70, 72 and 74 of the Act would be premature for application....