TMI Blog2016 (7) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... Allowance of unabsorbed depreciation and business of 100% EOU Unit (100% exemption u/s10B) against the taxable income of the assessee from other unit - HELD THAT:- In the present case, the Coordinate Bench observed that the similar issues have been decided in favour of assessee by this Tribunal in earlier years and no order as such brought to our notice that the Hon ble Jurisdictional High Court has reversed the order of the Tribunal. In view of the same, we find no merit in the order of CIT(Appeals) and accordingly, ground no-2 raised by the Revenue is dismissed. - I.T.A. No.: 94/Kol/ 2011 - - - Dated:- 27-7-2016 - Shri P.M.Jagtap, Accountant Member and Shri S.S.Viswanethra Ravi, Judicial Member For The Department : Shri Rajat Kumar Kureel, JCIT, Sr. D.R. For The Assessee : Shri Soumen Adak Shri Harish Agarwal ORDER Per S.S.Viswanethra Ravi : 1. This appeal by the assessee emanates out of the order of Commissioner of Income Tax (Appeals)-I, Kolkata dated 30.09.2010 for the assessment year 2006-07. 2. Ground no-1 of appeal reads as under :- That on the facts and in circumstances of the case, ld. CIT(A) has erred in deleting the addition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reproduced as under: 9. We have carefully considered the submissions. We find considerable cogency in the submissions of the ld. Counsel of the assessee. We find that identical issue under the Technology Upgradat ion Fund Scheme (in short TUFS ) of Ministry of Textiles was considered by the Hon ble Punjab Haryana High Court in ITA No. 472 of 2010 vide decision dated 17.01.2011. Hon ble High Court has considered and held the issue as under: - 2. The assessee is engaged in manufacture and sale of woolen garments. It received subsidy for repayment of loan taken for building, plant and machinery under the Credit Linked Capital Subsidy Scheme under Technology Upgradation Fund Scheme (TUFS) of Ministry of Textiles, Government of India. The assessee claimed the said subsidy to be capital receipt but the Assessing Officer did not accept the same and added back the same to the income of the assessee holding the same to be revenue receipt. On appeal, the CIT(A) upheld the plea of the assessee, which view has been affirmed by the Tribunal with the following observations:- Having regard to the aforesaid, in our view, it is quite clear that the objective of the subsidy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove the competitiveness and overall long term viability of the textile industry, the concerned Ministry of Textile adopted the TUFS scheme, envisaging technology upgradation of the industry. Under the scheme, there were two options, either to reimburse the interest charged on the lending agency on purchase of technology upgradation or to give capital subsidy on the investment in compatible machinery. In the present case, the assessee has taken term loans for technology upgradation and subsidy was released under agreement dated 12.7.2005 with Small Industry Development Bank of India. The relevant clause of the agreement under which the subsidy was given is as under:- Para 8. - to prevent misutilization of capital subsidy and to provide an incentive for repayment, the capital subsidy will be treated as a non interest bearing term loan by the Bank/Fis. The repayment schedule of the term loan however will be worked out excluding the subsidy amount and subsidy will be adjusted against the term loan account of the beneficiary after a lock in period of three years on a pro-rate basis in terms of release of capital subsidy. There is no apparent or real financial loss to a borrower ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sl. No. Unit Profit before taxation (1) DTA ₹ 8,59,19,380/- (2) 100% EOU ₹ 1,20,44,185/- (Loss) (3) Power Plant ₹ 1,00,55,470/- ₹ 6,38,19,725/- 11. The above-stated loss of EOU was arrived at after charging of the depreciation of ₹ 52,47,722/-. The commercial production at the EOU started in the previous year relevant to the AY 2004-05. In that year also, the assessee suffered loss. In the computation of income, the assessee set off the loss from EOU with the profit of other units. The Assessing Officer disallowed unabsorbed depreciation of ₹ 71,61,090/- and business loss of ₹ 48,83,095/- for the textile unit of the assessee on the ground that these losses relate to a unit whose profits are exempt under section 10B and hence, such losses cannot be adjusted against profit of taxable units. 12. The Assessee preferred an appeal before the CIT(Appeal) wherein he held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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