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2016 (1) TMI 1084 - AT - Income TaxEligibilty to claim deduction u/s 10A - Set off loss of eligible unit against the business income of the assessee rejected - Held that:- In the circular no. 7/DV/2013 [FILE NO.279/MISC./M-116/2012-ITJ], DATED 16-7-2013 at para No. one that it has been brought to the notice of the Board that the provisions of 10A/10AA/10B/10BA of the Income-tax Act, with regard to applicability of Chapter IV of the Act and set off and carry forward of losses, are being interpreted differently by the Officers of the Department as well as by different High Courts. Therefore, it cannot be said that circular is against the provision of the law merely because different high courts have interpreted the law differently. It is apparent that this circular is issued with an intention to clarify anomaly in law and its interpretation. Undoubtedly circular is beneficial to the assessee as it sets certain controversy involved therein to rest. Therefore we are of the opinion that this issue now should be decided in view of the above circular where in it is provided that If after aggregation of income in accordance with the provisions of sections 70 and 71 of the Act, the resultant amount is a loss (pertaining to assessment year 2001-02 and any subsequent year) from eligible unit it shall be eligible for carry forward and set off in accordance with the provisions of section 72 of the Act. Therefore, according to us assesse’s claim deserves to be considered favourably in view of the beneficial circular issued by CBDT. However at the time of making assessment AO was not having the privilege of this circular , we set aside this matter to the file of with direction to grant benefit of deduction of set off of losses of STPI unit of ₹ 54, 90, 557/- against the profit of non - STPI unit in accordance with this circular. Non deduction of tds on expenses of the FTS - disallowance u/s 40a (i) - withholding of tax - Held that:- The sum is not chargeable to tax in India according to the domestic tax laws and consequently there is no withholding tax liability in case of such payments, we do not wish to address the alternative arguments of the AR of the assessee regarding non-taxability of such sum in accordance with the provision of Article 12 (6) of the indo Japan DTAA. - Decided in favour of assessee
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