TMI Blog2015 (4) TMI 410X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, notwithstanding anything contained in any other provision of the Act, in computing the total income of the Assesee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year relevant to any subsequent assessment year, as per clause (ii) thereof, no loss referred to in section (1) of section 72 or subsection (1) or subsection (3) of section 74 insofar as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years. In clause (ii) w.e.f. 1st April, 2004, the words “ending before the 1st day of April, 2001” were inserted. It is this insertion which has enabled the Tribunal to hold that if the losses pertain to any subsequent assessment year, then, the understanding of the Revenue as reflected in the Circulars would bind it. That understanding apart, independently, the Tribunal has analysed this provision and found that by virtue of the nonobstante clause and by virtue of wording of sub clause (ii) that the Revenue could not have disallowed this claim of set off. We therefore do not find that in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Assessee by the impugned order. Hence, the Revenue has approached this Court under section 260A of the IT Act. 4) Mr. Pinto, learned Counsel appearing for the Revenue would submit that though the questions of law at page 4 of the paper book are somewhat clumsily worded, yet, the essential and core question is, whether the Tribunal was justified in upholding the Assessee's claim for set off? He submits that the Tribunal failed to appreciate that these unabsorbed business losses have been already set off against the profits of the said 10A unit in the assessment years referred above. It is in these circumstances that the Tribunal erred in law. Mr. Pinto also referred to a Judgment delivered by this Court in the case of Commissioner of Income Tax, Mumbai vs. Galaxy Surfactants Ltd. (ITXA/3465/2010). He would submit that this claim was therefore not allowable. Mr. Pinto would therefore submit that both questions at page 4 and 5 of the paper book are substantial. 5) However, Mr. Joshi, learned Counsel appearing for the Assessee would submit that the Tribunal has correctly appreciated the facts and the legal provision. The Tribunal has merely applied the law laid down b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export processing zone into a special economic zone, the period of ten consecutive assessment years referred to in this subsection shall be reckoned from the assessment year relevant to the previous year in which the undertaking began to manufacture or produce such articles or things or computer software in such free trade zone or export processing zone: Provided also that for the assessment year beginning on the 1st day of April, 2003, the deduction under this subsection shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software: Provided also that no deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2012 and subsequent years. (1A) Notwithstanding anything contained in subsection (1), the deduction, in computing the total income of an undertaking, which begins to manufacture or produce articles or things or computer software during the previous year relevant to any assessment year commencing on or after the 1st day of April, 2003, in any special economic zone, shall be,- (i) hundred per cent of profits and gains der ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the period specified in subclause (i) of clause (a) of subsection (1B), the amount not so utilised, shall be deemed to be the profits,- (i) in a case referred to in clause (a) in the year in which the amount was so utilised; or (ii) in a case referred to in clause (b), in the year immediately following the period of three years specified in subclause (i) of clause (a) of subsection (1B), and shall be charged to tax accordingly. (2) This section applies to any undertaking which fulfils all the following conditions, namely :- (i) it has begun or begins to manufacture or produce articles or things or computer software during the previous year relevant to the assessment year- (a) commencing on or after the 1st day of April, 1981, in any free trade zone; or (b) commencing on or after the 1st day of April, 1994, in any electronic hardware technology park, or, as the case may be, software technology park; (c) commencing on or after the 1st day of April, 2001 in any special economic zone; (ii) it is not formed by the splitting up, or the reconstruction, of a business already in existence : Provided that this condition shall not apply in respect of any und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Act, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year, relevant to any subsequent assessment year,- (i) section 32, section 32A, section 33, section 35 and clause (ix) of subsection (1) of section 36 shall apply as if every allowance or deduction referred to therein and relating to or allowable for any of the relevant assessment years ending before the 1st day of April, 2001, in relation to any building, machinery, plant or furniture used for the purposes of the business of the undertaking in the previous year relevant to such assessment year or any expenditure incurred for the purposes of such business in such previous year had been given full effect to for that assessment year itself and accordingly subsection( 2) of section 32, clause (ii) of subsection (3) of section 32A, clause (ii) of subsection (2) of section 33, subsection (4) of section 35 or the second proviso to clause (ix) of subsection (1) of section 36, as the case may be, shall not apply in relation to any such allowance or deduction; (ii) no loss referred to in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years. (9) Omitted by the Finance Act, 2003, w.e.f. 142004. (9A) Omitted by the Finance Act, 2003, w.e.f. 142004. Explanation 1.- Omitted by the Finance Act, 2003, w.e.f. 142004. Explanation 2.- For the purposes of this section,-(i) computer software means- (a) any computer programme recorded on any disc, tape, perforated media or other information storage device; or (b) any customized electronic data or any product or service of similar nature, as may be notified by the Board, which is transmitted or exported from India to any place outside India by any means; (ii) convertible foreign exchange means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder or any other corresponding law for the time being in force; (iii) electronic hardware technology park means any park set up in accordance with the Electronic Hardware Technology Park (EHTP) Scheme notified by the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed from the total income of the Assessee. We are not as much concerned with the proviso and other subsections, save and except subsection (6). The Tribunal has understood that this subsection contains non obstante clause and therefore, notwithstanding anything contained in any other provision of the Act, in computing the total income of the Assesee of the previous year relevant to the assessment year immediately succeeding the last of the relevant assessment years, or of any previous year relevant to any subsequent assessment year, as per clause (ii) thereof, no loss referred to in section (1) of section 72 or subsection (1) or subsection (3) of section 74 insofar as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years. In clause (ii) w.e.f. 1st April, 2004, the words ending before the 1st day of April, 2001 were inserted. It is this insertion which has enabled the Tribunal to hold that if the losses pertain to any subsequent assessment year, then, the understanding of the Revenue as reflected in the Circulars would bind it. That understanding apart, independently, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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