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2017 (10) TMI 1542 - AT - Income TaxDisallowance of deduction u/s 10A - deduction in the first year of the undertaking stands undisturbed or not withdrawn - no provision for withdrawal of special deduction for the subsequent years for breach of certain conditions - HELD THAT:- Once having accepted the claim of assessee, the Revenue cannot question assessee’s eligibility for claiming such deduction in subsequent assessment years. In Paul Brothers [1992 (10) TMI 5 - BOMBAY HIGH COURT] has observed that there is no provision for withdrawal of special deduction for the subsequent years for breach of certain conditions. Unless the relief granted for the initial assessment year is withdrawn, the ITO could not have withheld the relief for the subsequent years. Thus, in view of the fact that the assessee’s claim of deduction u/s. 10A was never questioned by the Revenue in initial assessment year, the Assessing Officer cannot raise question over assessee’s eligibility for claiming deduction in any of the subsequent assessment years. DR has also accepted the fact that in assessment year 2004-05, assessee’s claim of deduction u/s. 10A was allowed by Assessing Officer in scrutiny assessment proceedings. Thus, ground No. 1 raised in appeal by the assessee is allowed. Disallowance of provision for bad debts - authorities below have disallowed assessee’s claim primarily for the reason that the assessee has failed to establish that the provision was created in respect of either of the units - HELD THAT:- Assessee referring to separate Profit and Loss accounts for STPI and non-STPI units has pointed that provision for bad debts has been separately created for STPI and non-STPI units - while computing total income in the computation of income, the assessee has added back provisions for bad debts in respect of both STPI and non-STPI units. A separate calculation has been given for STPI unit wherein provision for bad debts in respect of STPI unit ₹ 22,56,208/- has been added back. We do not find any reason to disallow the claim of assessee. The assessee has added back the provision in the computation of income which was created earlier. Thus, the assessee has not claimed the same while computing total taxable income - Decided in favour of assessee. Allocation of expenditure amongst STPI and non-STPI units - HELD THAT:- It is an undisputed fact that in earlier assessment years the Department has not questioned the manner of allocation of expenditure between STPI and non-STPI units. Even in the subsequent assessment years the allocation of expenditure by assessee has not been disturbed, though the assessee is consistently following same method of allocation. Thus, in the light of facts of the case, we find no merit in the findings of CIT (A) in sustaining the addition. Accordingly, the same is deleted - Decided in favour of assessee. Computing the manner of deduction u/s. 10A before setting off of losses of non-eligible unit - HELD THAT:- In view of law laid down in Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] it is unambiguously clear that deduction u/s. 10A has to be computed before allowing set off of losses of non-STPI unit. - Decided in favour of assessee. Charging of interest u/s. 234B is consequential and mandatory,
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