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2014 (12) TMI 1062 - AT - Income TaxAllowability of deduction u/s 10B – Set off of brought forward business losses against the profits of the year – Effect of amendment u/s 10B w.e.f. 1.4.2001 - Whether the provisions of Sec.10B of the Act are deduction provisions or exemption provisions - Held that:- The similar matter has already been decided in The Deputy Commissioner of Income Tax, LTU Versus M/s. Biocon Limited [2014 (12) TMI 838 - ITAT BANGALORE] wherein it has been held that if the provisions are considered as exemption provisions then they will not enter the computation of total income and therefore the loss of the eligible unit cannot be set off against the profits of the non-eligible unit - the claim as made by the Assessee for carry forward of loss of the non-eligible unit had to be allowed without set off of profits of the 10A/10B unit - the claim made by the assessee deserves to be accepted. Payment made to M/s Novatel of the USA disallowed u/s 40(a)(i) –Whether the fact that according to section 5(2)(b) total income includes income deemed to accrue or arise in India and the source of such payment being in India and the source rule reigning over the situs rule the same is chargeable under the provisions of the Act or not - Held that:- As decided in assessee’s own case for the earlier assessment year, as decided in Clearwater Technology Services (P.) Ltd. Versus Income-tax Officer, Ward-11(1), Bangalore [2012 (11) TMI 903 - ITAT BANGALORE] wherein it was held that the payment was not fees for technical services rendered by the non-resident but was business income in the hands of the non-resident and since the non-resident did not have a permanent residence in India, the same is not chargeable to tax in the hands of the non-resident in India - there was no obligation on the part of the Assessee to deduct tax at source - the disallowance made by the AO u/s 40(a)(ia) of the Act relating to the payment made to M/s Novatel of the USA is deleted. Explanation 2 to section 195 inserted with retrospective effect from 1.04.1962 by the Finance Act, 2012 or not – whether a liability to deduct tax at source can be fastened on an assessee on the basis of a retrospective amendment to the law - Held that:- Though the Explanation 6 to sec. 9(1)(vi) inserted by Finance Act, 2012 is clarificatory in nature, the assessee cannot be held to be liable to deduct tax at source from the Pay Channel Charges – the AO was not justified in disallowing the claim of pay channel charges by invoking the provisions of sec. 40(a)(ia) – Decided against revenue.
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