TMI Blog2013 (3) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... P. Ltd. vs. ACIT [2010 (2) TMI 658 - ITAT, CHENNAI] has taken the view that deduction u/s.10A does not fall in Chapter VIA. Therefore, sec. 80AB could not be applied which mandates the deduction to be out of ‘gross total income’. On this basis, deduction of profitable unit was held to be allowable without adjusting the same against the loss of other units. However, the Hon’ble Kerala High Court in CIT, Cochin vs. Patspin India Ltd. [2011 (9) TMI 276 - KERALA HIGH COURT] has taken a contrary view. In that case also, the assessee had two industrial units and both of them were qualifying u/s.10B. The Hon’ble Court referred to the provisions of sec.10B and held that profit has to be computed in the manner laid down in sections 32 to 43D. De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Bench of the Tribunal in the case of M/s. Scientific Atlanta India Technology Pvt. Ltd. vs. ACIT in ITA No.352/Mds/2008 vide order dated 05-02-2010. However, the ld. DR pointed out that the issue is squarely covered in favour of Revenue by the decision of Hon ble Kerala High Court by their latest decision in the case of CIT, Cochin vs. Patspin India Ltd. reported in 203 Taxman 47. The ld. counsel submitted that he has not gone through the said decision of Kerala High Court. Therefore, the matter may be adjourned for one day. Adjournment was granted accordingly and hearing was fixed on 24-01-2012. When the case was called, Shri K. Gopal appeared and submitted that perhaps there is another decision of Bombay High Court where this issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sik unit, we give below our clarifications. Section 10B refers to an undertaking which means it refers to single undertaking and as such for the purpose of exemption both undertakings have to be treated as independent units. As such, each undertaking is first entitled to 10B benefit for its profits and only thereafter its profits become a part of gross total income, which are liable for adjusting against loss in any other undertaking. In this reference, we draw your kind attention to the order by Honourable Tribunal, Bangalore Bench in the case of ACIT vs. Yologawa India Ltd. (ITA No.1802/Bang/2005 for A.Y. 2002-03) in which it has been upheld that the exemption u/s.10A was correctly allowed without setting off loss from another units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Court referred to the provisions of sec.10B and held that profit has to be computed in the manner laid down in sections 32 to 43D. In fact, it was held as under : The order of the Tribunal could not be upheld because business profit has to be first determined based on sections 30 to 43D as provided under section 29 and it is with reference to profit so determined that deduction eligible under section 10B(4) has to be determined with reference to export turnover and the total turnover. The whole purpose of the exercise of computation by applying sections 30 to 43D is to determine the total business profits with reference to which the export profit of the unit has to be determined for granting deduction under clause (4) of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ption under section 10B(4). In view of the above findings, the appeals are to be allowed by reversing the orders of the Tribunal and by restoring the order issued by the Commissioner under section 263 of the first four years and by upholding the order of the Commissioner (Appeals) for the assessment year 2005-06 [Para 5]. From the above, it is clear that section 10B(4) itself refers to total income which would mean income of all units put together . It is settled law that if a decision of High Court is available, then the decision of Tribunal, even if that is of Special Bench, cannot override the same. Since the decision of Hon ble Kerala High Court is squarely applicable to the facts of the case and therefore following the same, we d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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