TaxTMI 
TaxTMI 
2025 (12) TMI 786
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....d 07.02.2023 in M.A.No.43/PUN/2022 for the limited purpose of adjudicating Ground of appeal No.5 raised in Form No.36. We therefore proceed to adjudicate the said ground. 3. Ground of appeal No.5 raised by the Revenue reads as under : "whether the DRP was right in law and on facts in directing AO to allow deduction u/s.10A before setting off unabsorbed depreciation and brought forward losses." 4. At the outset, ld. Counsel for the assessee submitted that the finding of Ld. Dispute Resolution Panel (DRP) deserves to be affirmed in view of plethora of judgements including the judgment of Hon'ble Apex Court in the case of CIT Vs. Yokogawa India Ltd. (2017) 77 taxmann.com 41 (SC)/391 ITR 274 wherein it has been held that in case ....
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....ts in CAD/CAM of Autoparts runs business under eligible as well as non eligible undertaking. The profits from eligible undertaking are allowable for exemption u/s.10A of the Act subject to fulfilment of the conditions provided u/s.10A of the Act. Assessee also had unabsorbed depreciation and brought forward losses from preceding years. In the computation of income, assessee has firstly claimed exemption u/s.10A of the Act and from the remaining profit available from non-eligible undertaking, the claim of unabsorbed depreciation loss has been claimed. However, ld. Assessing Officer declined the said claim and observed that prior to claiming exemption u/s.10A of the Act assessee should first set off brought forward unabsorbed depreciation and....
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.... been retained in Chapter III. The introduction of the word 'deduction' in Section 10A by the amendment, in the absence of any contrary material, and in view of the scope of the deductions contemplated by Section 10A as already discussed, it has to be understood that the Section embodies a clear enunciation of the legislative decision to alter its nature from one providing for exemption to one providing for deductions. 14. The difference between the two expressions 'exemption' and 'deduction', though broadly may appear to be the same i.e. immunity from taxation, the practical effect of it in the light of the specific provisions contained in different parts of the Act would be wholly different. The above implications cannot be more ....
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.... made at the stage of operation of Chapter VI of the Act. The retention of the said provisions of the Act i.e. Section 80HHC and 80HHE, despite the amendment of Section 10A, in our view, indicates that some additional benefits to eligible Section 10A units, not contemplated by Sections 80HHC and 80HHE, was intended by the legislature. Such a benefit can only be understood by a legislative mandate to understand that the stages for working out the deductions under Section 10A and 80HHC and 80HHE are substantially different. This is the next aspect of the case which we would now like to turn to. 16. From a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the ....
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....mature 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 arising therein, as formulated at the outset of this order, by holding that ....