TMI Blog2012 (12) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not apply to the income accrued or arisen on or after 1.4.2005 from any business carried on, or services rendered, by an entrepreneur or a Developer, in a Unit or Special Economic Zone, as the case may be. Hence, income of units located SEZ will not be included while computing book profit for the purpose of MAT as per section 115JB(6) of the Act. Authorities below were not justified to include the book profit in respect of SEZ unit at Mumbai of the assessee while computing book profit u/s.115JB of the Act for assessment year 2008-09. - Decided in favor of assessee. - IT Appeal NOs. 6903 (MUM.) of 2011 & 609 (Mum.) of 2012 - - - Dated:- 31-10-2012 - B.R. MITTAL And RAJENDRA, JJ. J.D. Mistry and Satish Mody for the Appellant. Girija Dayal for the Respondent. ORDER B.R. Mittal, Judicial Member - The assessee has filed these two appeals against orders of ld CIT(A) dated 1.8.2011 for assessment year 2008-09 and dated 23.1.2012 for assessment year 2009-2010 on following grounds: "1. The Commissioner of Income tax (Appeal) erred in upholding the Assessing Officer's order for making addition of Rs.2936/-u/s 14A of the IT Act on the ground or grounds as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2008-09 is rejected. 7. In respect of Ground Nos.2 3 of appeal, ld A.R. submitted that similar issue has been considered by the Tribunal in assessee's own case for Asstt. CIT v. Genesys International Corpn. Ltd. 53 SOT 245 (Mum.) (URO) by its order dated 31.8.2012 and the Tribunal has decided the issue in favour of assessee by following the decision of Hon'ble Jurisdictional High court in the case of Hindustan Unilever Ltd. v. Dy. CIT [2010] 325 ITR 102 and ITAT Pune Bench in the case of Patni Computer Systems Ltd. v. Dy. CIT [2012] 135 ITD 398. To substantiate his submission, ld A.R. referred paras 28 to 34 of the said order of the Tribunal dated 31.8.2012 (supra). Ld A.R. submitted that said brought forward losses pertain to assessment year 2004-05 and whatever final figures comes after giving effect to earlier years orders of the Tribunal, set off may be restricted to that extent. Ld D.R. did not dispute above contention of ld A.R. 8. We have considered the submissions of ld representatives of parties and orders of authorities below as also the order of the Tribunal dated 31.8.2012 (supra). 9. We observe that assessee claimed set off of Rs.37,10,326/- being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or tax benefit under section 10A of the Act. The Finance Act, 2007 amended section 115JB with effect from 2008-09 for bringing the amount of income to which provisions of section 10A or 10B apply within the purview of MAT. Section 10A / 10B of the Act provides tax incentive to units located in certain specified zone/park or to units which are export oriented, subject to the prescribed conditions. Broadly, the benefit granted under section 10A of the Act are available to units located in the following areas: "* Free Trade Zone (FTZ) Electronic Hardware Technology Park (EHTP) Software Technology Par (STP) Export Oriented Units (EOUs) SEZ" 13. It was also contended that provisions of sub-section (6) of Section 115JB of the Act inserted by Special Economic Zone Act, 2005 (SEZ Act) w.e.f. 10.2.2006 provides that provisions of MAT would not apply to income from any business carried on by an entrepreneur or a developer in a unit or SEZ, as the case may be. Therefore, said provision was enacted so as to continue tax benefit promised by the Government under the SEZ scheme. 14. AO did not accept said contention of the assessee and stated that as per prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 i.e. from A.Y. 2008-09 by deleting words "section 10 or 10B" and retained sub-section (6) of Section 115JB which provides exclusion of income of units located in SEZ while computing book profit u/s.115JB of the Act. Ld A.R. submitted that AO as well as ld CIT(A) has rejected the claim of assessee for excluding profit of SEZ units from its book profit by stating that section 115JB(6) applies only to units which are covered by section 10AA and not the units to which section 10A applies. He submitted that AO by placing reliance on the para 44 of CBDT Circular 3 dated 12.3.2008, which explains the amendment made by Finance Act, 2007, without appreciating that sub -section (6) of Section 115JB does not refer any section, either sec. 10A or 10AA and it refers only to SEZ units. He submitted that section 10A/10B of the Act provides tax incentive to a unit located in certain specified zone/park or to units which are export oriented, subject to the prescribed conditions and not only the unit located in SEZ. He submitted that benefits u/s.10A is available to unit located in following areas: "*Free Trade Zone (FTZ) Electronic Hardware Technology Park (EHTP) Software Techno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section(6) are ceased to have effect in respect of any previous year relevant to assessment year commencing on or after 1.4.2012. He submitted that from the assessment year 2012-13, the benefit of exemption of MAT while computing book profit will not be applicable to units located in SEZ but the assessee is entitled to get the benefit of MAT in assessment year 2008-09. 19. On the other hand, ld D.R. supported the orders of authorities below. He submitted that there should be harmonious interpretation of provisions of the Act. He submitted that assessee has claimed deduction u/s.10A of the Act and in view of amendment made in clause (f) of Explanation (1) to Section 115JB(2) by the Finance Act, 2007 w.e.f. 1.4.2008 i.e. FROM Assessment year 2008-09, the benefit is not available to the assessee. He submitted that provisions of section 115JB(6) was inserted w.e.f 10.2.2006 i.e. assessment year 2006-07 and assessee cannot get benefit under two provisions of the Act. Since the assessee is getting exemption u/s.10A and if the assessee's claim is accepted that assessee is also entitled for benefit of provisions of section 115JB(6), i.e. exemption from MAT in that case, assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose of MAT as per section 115JB(6) of the Act. In view of above, we are of the considered view that there is merit in the contention of ld A.R. that irrespective of the fact that amendment has been made in clause (f) of Explanation (1) to section 115JB(2) of the Act to apply the provisions of MAT in respect of units which are entitled to deduction u/s.10A or 10B but the units which are in SEZ will continue to get benefits from the applicability of provisions of MAT in view of sub-section(6) of the Act. The contention of ld D.R. that assessee will not be entitled to get the benefit u/s.115JB(6) of the Act as assessee has claimed deduction u/s.10A of the Act is to be rejected for the reason that section 115JB (6) does not refer section 10A or section 10AA but it only refer that provisions of section 115JB will not apply to the income accrued or arisen on or after 1.4.2005 from any business carried on in an unit located in SEZ. Hence, we are of the considered view that the unit in SEZ will be covered by sub-section(6) to section 115JB of the Act irrespective of the fact that those units were claiming deduction u/s.10A of the Act. We also observe that benefit given to SEZ unit from th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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