9911796707
TMI Blog2010 (12) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... sake of convenience and brevity. 3. The issue that is raised in the appeals is whether the CIT(A) is justified in holding that the losses and carry forward losses of 10B units are not to be set off against the profits of 10B units before computing deduction u/s 10B of the Act. 3.1 The facts pertaining to asst. year 2005-06 (ITA No.1141/2009) are as follows:- The assessment, completed pursuant to 263 order of the CIT, was challenged before the first appellate authority. The first appellate authority allowed the appeals filed by the assessee by holding "since the order passed u/s 263 of the Act has been cancelled, the reasons and basis becomes functus officio and non-est. Therefore, I see no reason to uphold the denial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 10B was separately computed and carried forward. The Assessing Officer completed the assessment u/s 143(3) and set off loss of units not eligible for deduction against the profits of units eligible for deduction u/s 10B and the balance profits were set off against the brought forward losses and allowances of the assessee. 5.1 Aggrieved by the assessment, the assessee preferred an appeal before the first appellate authority. 5.2 The CIT(A) allowed the appeal of the assessee and directed the Assessing Officer to allow the deduction u/s 10B as claimed by the assessee. 5.3 We have heard both the parties and perused the material on record. We find that this issue is squarely covered in favour of the assessee by the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-section 4, it is profits of the business of the undertaking that qualify for deduction. Similarly, the definition of export turnover refers to the sale proceeds of the exports made by the undertaking; - Under sub-section 5, an audit report is to be furnished in support of claim of deduction. Such an audit report is to be submitted for each eligible undertaking. 9.2 The decision relied on by the learned DR mainly in the case of Himatsingike Seide Ltd. 286 ITR 255 is distinguishable since in that case, the assessee owned only one 100% export oriented unit. The unabsorbed depreciation allowance was in relation to the same unit. However, in the present case, as stated earlier, the respondent operates through three units. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter VI-A which chapter is to be applied after arriving at the gross total income, whereas section 10A falls under Chapter III which is to be given effect while arriving at the total income of the assessee. Hence, we hold that even though the claim u/s 10A is a deduction and not exemption, the same cannot be subjected to the provisions of section 80AB which falls under different chapter, namely, Chapter VI-A, so long as the Legislature has not specifically mentioned so, to apply the provisions of section 80AB of the Act, to the claim of deduction u/s 10A". 9.4 This issue, we find, is squarely covered by the decision of the Special Bench of the Tribunal in the case of Scientific Atlanta Technology Pvt. Ltd. cited supra. In that case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Industrial undertaking, the profits and gains of that 'particular undertaking', which qualify for deduction u/s 10A is being separately calculated. The relevant finding of Tribunal reads as follows:- "It may be noticed that again the words used are "Profits and gains of business of the undertaking". In any case, this is not the total profits of the business of the assessee. Thus, in computing deduction under section 10A, we have to ascertain the total income as per the provisions of the Act in respect of "that undertaking" and the amount so determined is to be reduced from the total income". 9.7 Finally it was concluded by the Hon'ble Special Bench of the Tribunal (para 68 of the order) that nowhere it is mentioned in sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
