2013 (5) TMI 44

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..... der Section 263 of the Act. 2. The Assessing Authority allowed deduction under Section 10B amounting to Rs.4,75,30,724/- on the business income of Rs.5,36,70,676/- without setting-off unabsorbed depreciation amount of Rs.4,26,23,711/-. The Commissioner of Income tax in his jurisdiction under Section 263 of the Income Tax Act was of the view that the same resulted in excess deduction allowed under Section 10B of the Act and incorrect determination of loss was carried forward. Therefore, he set-aside the said order and directed the Assessing Officer to re-compute the total income after setting-off the unabsorbed depreciation and correctly determine deduction allowable under Section 10B in the assessing order. Aggrieved by the same, the asses .....

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..... sessee", has to be understood in the context with which the said provision is inserted in Chapter-III of the Act. Sub-Section (4) of Section 10-A clarifies this position. It provides that the profits derived from export of articles or things from computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. Therefore, it is clear that though the assessee may be having more than one undertaking for the purpose of Section 10-A it is the profit derived from export of articles or things or computer software from the business of the .....

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..... assessee. Therefore, as the profits and gains under Section 10-A is not be included in the income of the assessee at all, the question of setting off the loss of the assessee of any profits and gains of business against such profits and gains of the undertaking would not arise. Similarly, as per Section 72(2), unabsorbed business loss is to be first set off and thereafter unabsorbed depreciation treated as current years depreciation under Section 32(2) is to be set off. As deduction under Section 10-A has to be excluded from the total income of the assessee, the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise. In that view of the matter, the approach of the assessing author .....

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