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2015 (10) TMI 1500 - ITAT MUMBAI

2015 (10) TMI 1500 - ITAT MUMBAI - TMI - Set-off the losses of the assesse’s Gurgaon 10A unit against the profits of its other 10A unit - Held that:- As decided in Hindustan Unilever Limited [2010 (4) TMI 206 - BOMBAY HIGH COURT] after the substitution of section 10B by the Finance Act of 2000, the provision as it now stands provides for a deduction of such profits and gains as are derived by a 100 per cent. export oriented undertaking from the export of articles or things or computer software f .....

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B. Three units had returned a profit during the course of the assessment year, while the Crab Stick unit had returned a loss. The assessee was entitled to a deduction in respect of the profits of the three eligible units while the loss sustained by the fourth unit could be set off against the normal business income. In these circumstances, the basis on which the assessment is sought to be reopened is contrary to the plain language of section 10B - Decided in favour of assessee. - ITA No. 646/Mum .....

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erred in directing the Assessing Officer not to set-off the losses of the assesse s Gurgaon 1OA unit against the profits of its other 1OA unit before computing deduction u/s.10A without appreciating that deduction u/s.10A is allowable out of Total Income of the assessee, which is to be computed after set-off of losses as per Chapter VI of the I.T. Act. "2. On the facts and in the circumstances of the case and in law, the CIT(A) erred in directing the Assessing Officer to allow carry forwar .....

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dertaking which is not 10A undertaking. The assessee claimed deduction under section 10A in respect of profits of the eligible units. The AO recomputed the deduction u/s 10A by setting off of the loss suffered by the assessee in the non-10A unit. 3. On appeal, the ld.CIT(A) has allowed the claim of the assessee by following the judgment of the Hon ble Jurisdictional High Court in the case of Hindustan Unilever Ltd V/s DCIT 325 ITR 102 (Bom) and CIT V/s Patni Computer System Ltd order dated 1.7.2 .....

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Assessing Officer in reopening the assessment is that the assessee claimed a deduction of ₹ 14.53 crores under section 10B. The deduction was restricted to ₹ 11.11 crores in the order. While reopening the assessment, the Assessing Officer has proceeded on the basis that section 10B provides an exemption and that in respect of the Crab Stick Unit the assessee had suffered a loss of ₹ 1.33 crores. The Assessing Officer has observed that since the income of the unit was exempt fro .....

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emption. Plainly, section 10B as it stands is not a provision in the nature of an exemption but provides for a deduction. Section 10B was substituted by the Finance Act of 2000 with effect from April 1, 2001. Prior to the substitution of the provision, the earlier provision stipulated that any profits and gains derived by an assessee from a 100 per cent. export oriented undertaking, to which the section applies "shall not be included in the total income of the assessee". The provision, .....

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