TMI Blog2010 (11) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... ectricity rebate is directly connected with the industrial unit and accordingly, the same should be characterized as income from business - Considering the totality of facts and the circumstances of the case, both the incomes are to be considered under the head 'business income' and there is no valid reason to the assessing officer for taxing the same under the head 'income from other sources' - It is pertinent to note that the eligibility for deduction under section 10A of the Act is nothing to do with the taxation of income under the head 'income from business' - Even if the income is not eligible for deduction under section 10A of the Act, it can still be taxed as business income - Thus, agree with the findings of the CIT (A) on the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons for reopening the assessment was that the assessee company wrongly included the income from project management services of Rs.10,11,49,792 and electricity rebate of Rs.36,56,035/- in the computation of deduction under section 10A of the Act. The assessing officer was of the opinion that these receipts were not entitled for deduction under section 10A and the same were required to be assessed as 'income from other sources'. The assessee filed a return of income on 23-4-2008 admitting loss of Rs.2,06,67,910 as against taxable income of Rs.1,20,24,573 admitted in the original return of income. In this revised return, the assessee set off the loss of Rs.3,44,75,824 of 10A Units against the income from other sources. The assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , were services performed in connection with the back office and call center services. Hence, the same are fundamental to and form an integral part of the business of the assessee company. The income earned by UK Branch is earned from its business operations and as such should be treated as business income and not as income from other sources. It was further submitted that the electricity rebate received as per MOU with Government of Andhra Pradesh was adjusted against power and fuel expenses under schedule (12) of the profit and loss account. The electricity rebate is directly connected with the industrial unit and accordingly should be characterized as income from business. It was further contended that the loss of 10A Unit should be adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee company. The income earned by UK Branch is earned from its business operations and as such should be treated as business income and not as income from other sources. It was further submitted that the electricity rebate received as per MOU with Government of Andhra Pradesh was adjusted against power and fuel expenses under schedule (12) of the profit and loss account. The electricity rebate is directly connected with the industrial unit and accordingly should be characterized as income from business. In support of his contentions, he relied on the following case-law:- i) CIT vs. Williamson Financial Services and Others (297 ITR 17) (SC) ii) Honeywell International India Pvt. Ltd. (108 TTJ 924) (Del) iii) Mind tree Consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibility for deduction under section 10A of the Act is nothing to do with the taxation of income under the head 'income from business'. Even if the income is not eligible for deduction under section 10A of the Act, it can still be taxed as business income. We agree with the findings of the CIT (A) on the second issue that business loss of 10A units should be set off against the business profits of non 10A units. Catena of decisions of the Tribunal relied on by the learned counsel for the assessee support the view taken by the CIT (A). Hence, we do not see any infirmity in the order of the first appellate authority on this issue and the same is upheld. 6. In the result, the appeal of the revenue stands dismissed. Order pronounced in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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