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2020 (9) TMI 968 - HC - Income TaxNon setting off the losses from Export Oriented Unit (Section 10B unit) against the income earned in the Domestic Tariff Area Unit - return which was filed beyond the prescribed time limit - assessee has neither claimed any deduction under Section 10B of the Act in respect of any of the three units of the assessee nor has filed any audit report in Form 56G in accordance with Section 10B(5) of the Act read with Rule 16E for the Assessment year 2008-09, which is a mandatory requirement - HELD THAT:- The business income can be computed only after set off of business loss against the business income in the year as per provisions of Section 70 of the Act. Section 10A of the Act is a code by itself and it is pertinent to note that Section 10A(6)(ii) does not preclude the operation of Sections 70 and 71 of the Act. Para 5.2 of the Circular issued by the Central Board of Direct Taxes dated 16.07.2013 clearly provides that income / loss from various sources i.e. eligible and ineligible units under the same head are aggregated in accordance with provisions of Section 70. Where the assessee does not want the benefit of deduction from the taxable income, the same cannot be thirst upon it. There is no provision which makes compulsory on the part of income tax officer to make deduction in all cases. Admittedly, in the instant case, the assessee has not filed any audit report in Form-56G which is a mandatory requirement for claiming deduction under Section 10B of the Act. Therefore, the deduction under Section 10B of the Act cannot be thirst upon the assessee. Admittedly, in the instant case, two units of the assessee namely unit No.II and unit No.III were export oriented units and were eligible for exemption. The assessee had sustained loss in respect of unit No.I and therefore, the assessee had claimed set off, as permissible under Section 70 of the Act and had offered the balance as income taxable under the head income from business which has been declared in the return. The provisions of Section 70 of the Act have to be given effect to. - See MINDTREE CONSULTING (P) LIMITED. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX. [2005 (11) TMI 176 - ITAT BANGALORE-B] AND YOKOGAWA INDIA LTD. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] - Decided in favour of assessee.
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