TaxTMI 
TaxTMI 
2024 (11) TMI 1295
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.... in confirming the additions made by the Ld Assessing Officer (AO) of INR 3,82,04,3944 to the returned income of the Appellant The Appellant humbly prays that the additions made by the LS CIT(A)/AD be deleted 2. On the facts and in the circumstances of the case and in law, the Ld CIT(A)/Ld. AD armed in denying deduction of INR 90,33,777 under section 10AA of the Income-tax Act, 1961 (The Act) The Appellant humbly prays that the deduction under section 10AA of the Act be allowed 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A)/Ld AG erred in disallowing the interest paid of INR 1,53,711 on delayed payment of Tax Deducted at Source (TDS) under section 37 of the Act The Appellant humbly prays that the expenditure in relation to interest on delayed payment of TDS be allowed 4 On the facts and in the circumstances of the case and in law, the Ld CIT(A)/Ld. AD erred in restricting the setoff of the business loss to INR 1,59,56,392 as against the business loss of INR 440,63,298 claimed by the Appellant in its Return of Income. The Appellant prays that the business ices as claimed by the Appellant ....
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.... computation of total income assessee has claimed set off of brought forward business loss of Rs. 44,963,298/- however as per the assessment records for earlier year the business loss available for carried forward and set off is only Rs. 15,956,392/-. Accordingly set off was reduced to that extent. The income of the assessee was computed at Rs. 68,829,880 against the returned income of Rs. 30,599,429/- as per order of assessment passed under section 143 (3) of the act on 22/1/2016. 4. The assessee preferred appeal before the learned CIT - A. With respect to the deduction under section 10 AA of the act to be allowed to the assessee before setting off of the brought forward business losses of the earlier years, the claim of the assessee was dismissed in view of the decision of the honourable Karnataka High Court in 286 ITR 255 and of the Kerala High Court in 245 CTR 97 wherein it was held that the business profits are to be computed after setting of unabsorbed depreciation and thereafter deduction of section 10 B is to be computed further the circular number 7/2013 dated 16 July 2073 was also against the assessee. Therefore, deduction under section 10 AA of Rs. 9,033,777/- claimed....
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....32,05,014 and depreciation of that assessee unit was Rs. 4,171,237/-. Therefore, the profit and loss of the assessee unit eligible for deduction under section 10 A of the act was Rs. 9,033,777 as claimed by the assessee. However, the fact shows that assessee has a business loss of Rs. 44,963,298 as claimed by the assessee in the computation of income. The Assessing Officer has held that this business loss is available to the assessee to the extent of only Rs. 15,956,392/- therefore the carried forward business loss of earlier years of Rs. 15,956,392/- should have been reduced out of the profit eligible for deduction under section 10AA of the act amounting to Rs. 9,033,777/- and therefore the resultant profit eligible for deduction under that section is rupees nil. The claim of the assessee is that for the purpose of claim of deduction under section 10 AA of the act, the business losses of the earlier year should not be reduced from the eligible profit. We find that now the honourable Supreme Court has decided this issue in 77 taxmann.com 41 in case of Commissioner of income tax versus Yokogawa India Ltd wherein it has been held that the deduction under section 10 A of the act is pr....
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....nnot be allowed as deduction." 12. The payment of interest on late deposits of TDS assessed under Section 201(1A) is not an expense solely and exclusively expended for business purposes; hence it is not deductible under Section 37(1) of the Act. Even if the deduction and remittance of TDS to the government are essential components of business operations, the assessee is nonetheless liable for this interest amount. This suggests that the assessee does not have the right to spend the money on the government's behalf. The character of the interest payment is determined by the sort of tax utilised to pay it. The several decisions of the coordinate benches cited before the learned CIT - A does not hold water in view of the decision of the honourable Madras High Court specifically saying that such interest does not qualify as deductible expenditure. 13. In the result ground number 3 of the appeal of the assessee stands dismissed. 14. Ground number 4 is with respect to the computation of setting off of the business loss of the correct some. The claim of the assessee is that the business loss of Rs. 44,963,298 claimed by the assessee in its return of income should be allowed w....