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TMI Blog2013 (9) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 8th March 2013 passed by the Tribunal in ITA Nos. 3404, 2405 & 3406/Ahd/2010 with respect to A.Ys 2005-06; 2006-07 & 2007-08 by which, the Tribunal has allowed the aforesaid appeals preferred by the assessee and has quashed and set-aside the orders passed by the CIT (A), proposing the following substantial question of law:- "Whether the Appellate Tribunal has substantially erred in holding that deduction u/s. 10A to be allowed first before setting off unabsorbed loss and depreciation of non-eligible business unit of the assessee ?" 3. Facts leading to filing of the present Appeals in nutshell are as under:- 3.1 The assessee-company filed its return of income for the AY 2005-06 declaring total income of Rs. NIL. The said retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee submitted its explanation on 19th December 2009, and that thereafter, the Assessing Officer passed an order of assessment on 24th December 2009 disallowing the set-off of the business loss of A.Y 2001-02 and added it back to the total income of the assessee-company. 4. Feeling aggrieved and dissatisfied with the order of assessment dated 24th December 2009, the assessee preferred an appeal before the CIT(A) and by order dated 19th November 2010, the CIT(A) had dismissed the said appeal by holding that the brought forward business loss and unabsorbed business loss of the Mumbai unit has to be adjusted against the income for computation of deductions under section 10A of the Act, and thus, the Assessing Officer was justified in setting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court, relying on the aforesaid two decisions of the Bombay High Court, has held the question against the Revenue. 8. However, she has submitted that in view of the decisions of Madras High Court in case of CIT v. Chemplast Sanmar Ltd. [2009] 314 ITR 231 of Karnataka High Court in case of CIT v. Himatasingike Seide Ltd. [2006] 286 ITR 255 and definition of "total income" as per Section 2(45) of the Income-tax Act, 1961 and the Circular No. 7/DV/2013 dated 16/07/2013 issued by the CBDT, the issue/question raised in the present Tax Appeals may be admitted. It is submitted that while issuing the Circular, the Board has clarified what can be said to be the "total income" as per Section 2(45) of the Act. It is further submitted that by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee that the Assessing Officer has while reopening the assessment ex facie proceeded on the erroneous premise that section 10B is a provision in the nature of an exception. Plainly, section 10B as it stands is not a provision in the nature of an exception 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 application "shall not be included in the total income of the assessee". The provision, therefore, as it earlier stood was in the nature of an exemption. After the subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . This was emphasized in a judgment of a Division Bench of this Court, while construing the provisions of section 10B, in case of Hindustan Unilever Ltd. v. Dy. CIT [2010] 325 ITR 102 at paragraph 24. The submission of the Revenue placed its reliance on the literal reading of section 10A under which a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years is to be allowed from the total income of the assessee. The deduction under section 10A, in our view, has to be given effect to at the stage of computing the profits and gains of business. This is anterior to the application of the provisions of section 72 which deals w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowed by the Bombay High Court in case of Schmetz India (P.) Ltd. (supra). It is also reported that in Tax Appeal No. 687 of 2012, the Division Bench of this Court had an occasion to consider identical issue/question, and relying on the aforesaid two decisions of the Bombay High Court in case of Black & Veatch Consulting (P.) Ltd. (supra) and Schmetz India (P.) Ltd. (supra) and concurring with the view taken by the Bombay High Court in the aforesaid two decision, the Division Bench has dismissed the Tax Appeal and held the aforesaid issued against the Revenue. 11. In view of the above facts and circumstances and the binding decision of this Court in Tax Appeal No. 786 of 2012 and as the issue/question proposed is directly covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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