TaxTMI 
TaxTMI 
2024 (5) TMI 395
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar 2008-09-Annexure-A1. ii) Notice under section 148 of the Act dated 28.03.2014 vide PAN: AADCS8788F F.No. DCIT/C-1/RCR/2013-14 for the assessment year 2009-10-Annexure-A2. (b) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the notice issued under the provision of section 143(2) of the Act issued by the Respondent No. 3 as enclosed and marked as Annexure-'B1 & B2'. The details of the Annexure-B1 and B2 are as follows: i) Notice under section 143(2) of the Act dated 22.09.2014 vide PAN: AADCS8788F for the assessment year 2008-09-Annexure-B1 ii) Notice under section 143(2) of the Act dated 22.09.2014 vide PAN: AADCS8788F for the assessment year 2009-10-Annexure-B2 (c) Issue a writ of Certiorari or direction in the nature of a writ of certiorari quashing the orders passed against the objections to 148 notice filed by the petitioner by the Respondent No. 3 as enclosed and marked as Annexure-C1 & C2'. The details of the Annexure-C1 and C2 are as follows: i) Order passed for the assessment year 2008-09 vide F.No. Scrutiny/JCIT/RR/RCR/2014-15 dated 06.02.2015 for the assessment year 2008-09- Annexure-C1. ii) Order p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was specifically mentioned that provisions of Section 10B are not applicable for the relevant assessment year. Petitioner in its return set of the unabsorbed depreciation of EOU unit for the year 2008-09. Likewise, for the assessment year 2009-10 similar returns were filed. However, petitioner was surprised to receive notice under Section 147 of the Income Tax Act vide Annexure - A1 and Annexure-A2 for the assessment years 2008-09 and 2009-10, respectively. c) The petitioner replied the same. But without considering the reply in proper perspective, the Joint Commissioner of Income Tax passed orders under Annexures-C1 and C2 for the relevant years. Being aggrieved by the same, the petitioner is before this Court. 4. Sri A. Shankar, learned Senior Counsel for the petitioner, submits that the orders at Annexures - C1 and C2 are up against the provisions of the Act, and the Joint Commissioner did not properly appreciate the fact that the petitioner had the status of EOU for a period of 5 years and therefore, Section 10B was not applicable to the petitioner - Company. 5. In that regard, the petitioner had also placed judgment of the Bombay High Court to substantiate the contentio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the petitioner to seek for non-application of Section 10B by filing a declaration. 11. Said position of law is not in dispute in view of the judgment of the Division Bench of this Court in 'Karle International (P) Ltd.,' case supra. The relevant paragraphs with regard to the said position of law is dealt with by the Division Bench in Para Nos. 6 to 9. "6. We have considered the submissions made by the learned counsel for the parties and have perused the record. Before proceeding further, it is apposite to take note of the relevant statutory provisions namely Section 10B (i), 10B (5), 10B (6)(ii), and Section 70 as well as the para 5.2 of the Circular issued by the Central Board of Direct Taxes. Section 10B (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from the tot....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the IT Act shall be aggregated in accordance with the provisions of Chapter VI of the IT Act, 1961. This means that first the income / loss from various sources i.e., eligible and ineligible units, under the same head are aggregated in accordance with the provisions of Section 70 of the Act. Thereafter, the income from one ahead is aggregated with the income or loss of the other head in accordance with the provisions of Section 71 of the Act. If after giving effect to the provisions of Sections 70 and 71 of the Act there is any income (where there is no brought forward loss to be set off in accordance with the provisions of Section 72 of the Act) and the same is eligible in accordance with the provisions of Chapter VI-A or Sections 10A, 10B etc. of the Act, the same shall be allowed in computing the total income of the assessee. 7. Section 10B of the Act was substituted by Finance Act, 2000 w.e.f. 01.04.2001. Section 10B as it stands is not a provision in the nature of an exemption but provides for a deduction of such profit and gains as are derived by 100% export oriented undertaking from the export of articles or things or computer software for 10 consecutive assessment yea....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 10B of the Act cannot be thirst upon the assessee. 9. Admittedly, in the instant case, two units of the assessee namely unit No. II and unit No. III were export oriented units and were eligible for exemption. The assessee had sustained loss in respect of unit No. I and therefore, the assessee had claimed set off, as permissible under Section 70 of the Act and had offered the balance as income taxable under the head income from business of Rs. 12,89,762/- which has been declared in the return. The provisions of Section 70 of the Act have to be given effect to. It is pertinent to mention here that Income Tax Appellate Tribunal had taken a similar view in MINDTREE CONSULTING (P) LTD., supra, which was upheld by a Division Bench of this Court in COMMISSIONER OF INCOME-TAX Vs. YOKOGAWA INDIA LTD., supra. Similar view has been taken by Bombay High Court in GALAXY SURFACTANTS LTD., supra. We respectfully agree with the view taken by the Division Bench of this Court as well as Bombay High Court. It is pertinent to mention here that decision of the Supreme Court in YOKOGAWA, supra is not an authority for the proposition that an assessee cannot claim set off under Section 70 of the ....