TMI Blog2013 (8) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... 360 OF 2011, 407 of 2010, 279 of 2012, 361 of 2011 and 362 of 2011 - - - Dated:- 20-8-2013 - SRI KALYAN JYOTI SENGUPTA, CJ AND SRI K.C.BHANU, J For the Petitioner : LAKSHMI KUMARAN SRIDHARAN For the Respondent : PRASAD (SC FOR INCOME TAX JUDGMENT: CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTA All these appeals raise one common question of law i.e. whether deduction under Section 10B of the Income Tax Act, 1961 (for short, the Act ) is required to be allowed before adjusting brought forward losses and unabsorbed depreciation. 2. To clarify this, we are to examine whether the profits and gains as are derived from 100% export oriented undertaking from the export of articles, is allowable before computing income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he head profits and gains of business or profession and that this income has been derived in the course of business and the provision of Section 10B of the Act has to be read subject to Section 14 of the Act, and that under the provision of Section 10B, income deduction has to be given as it is allowable in the ordinary course of business. According to him, no special treatment is envisaged while dealing with the export income as it is essentially income from business. He has also referred to Section 28 of the Act, which provides a complete and exhaustive mechanism for taking income from profits and gains of business or profession, and further deduction is allowable under the said Section. According to him, the income from profit and gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to accrue or arise to him in India during such year; or (c) accrues or arises to him outside India during such year; Provided that, in the case of a person not ordinarily resident in India within the meaning of sub-section (6) of section 6, the income which accrues or arises to him outside India shall not be so included unless it is derived from a business controlled in or a profession set up in India. (2) Subject to the provisions of this Act, the total income of any previous year of a person who is a non resident includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person; or (b) accrues or arises or is deemed to accrue or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Section 14, this Chapter has been saved. Therefore, the argument of Mr. J.V.Prasad that income as mentioned in Section 10B of the Act has to be brought in the formula of general provision under Section 14 of the Act and also Section 28 of the Act and other provisions, is not acceptable. This question came up for consideration before the Karnataka High Court in the case of Yokogawa India Limited (1 supra). In paragraph no.29 of the report, the Karnataka High Court took the view as follows: After making all such computations, the assessee would be entitled to the benefit of set off or carry forward of loss as provided under Section 72 of the Act. That is the benefit which is given to the assessee under the Act irrespective of the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ple is squarely applicable in case of Section 10B of the Act and that the principle laid down for deciding the matter relatable to Section 10A of the Act is also to be applicable in case of Section 10B of the Act. The Department has not kept the provision ambiguous and unexplained. Schedule-B of Form No.1 viz. Return of Income (ITS-1) provides profits and gains of business or profession. In Item No.18 thereof, it is mentioned as follows. Is section 10A/10B/10C applicable in your case ? If yes, have you opted out by filing declaration prescribed u/s 10A (8)/10B(8)/10C (6) ? The instructions issued by the Department to fill up the form made the position clear. It has been clarified with regard to item No.18 as follows: Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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