TaxTMI 
TaxTMI 
2016 (8) TMI 1624
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....ed by the assessee. 2. The revenue raised the following grounds of appeal: 1. The order of the learned CIT (A) is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case the learned CIT (A) erred in directing the AO to compute deduction u/s 10A without setting off of losses pertaining to 10A unit located at Pune (Unit 2) and Bangalore Unit against the profits of 10A Unit located at Pune (Unit 1) by placing reliance on the decision of Hon'ble High Court of Karnataka in the case of M/s Yokogawa India Ltd., but without appreciating the fact that as per amended provisions of Section 10A, deduction u/s 10A has to be allowed from the total income of the assessee, and as per Section 2(45)....
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....s. 2 and 3 challenge the direction of the CIT (A) to allow deduction u/s 10A without set off of losses pertaining to 10A unit located at Pune Unit 2 and Bangalore unit following the decision of the Hon'ble High Court of Karnataka in the case of Yokogawa India Ltd., The CIT (A) allowed the grounds of appeal as follows: 28. I have carefully considered the appellant's submissions. The AO has mentioned on page 4 of her order that the question of computing a deduction under section 10A for the Pune unit does not arise as the income from business had resulted in a loss after setting off inter-unit losses. The appellant's contention is that the AO is required to compute the 10A deduction for each profit-making STPI unit separ....
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....India that as per section 72(2), unabsorbed business loss is to be first set off and thereafter unabsorbed depreciation treated as current year's depreciation under section 32(2) is to be set off. As deduction under section 10A has to be excluded from the total income of the assessee, the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise. In that view of the matter, the approach of the assessing authority was quite contrary to the aforesaid statutory provisions and the appellate Commissioner as well as the Tribunal was fully justified in setting aside the said assessment order and granting the benefit of section 10A to the assessee. 31. I find that the decision i....
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....159)(Bang.). The relevant finding of the CIT (A) is as under: 48. I hold the view that while the TPO is justified in applying the turnover filter, he ought to apply the same objectively both for low and high turnover companies, as a one sided application of the turnover filter would render the analysis unreliable. In this context, I place reliance on the decision of the Hon'ble jurisdictional Bench of ITAT in the case of Genisys Integrating Systems (supra) where it has been held that when there is a limit for the lower end for identifying the comparables, there is no reason why there should not be an upper limit also, as size matters in business. 49. For the purpose of considering companies on the basis of their turnov....