TMI Blog2017 (5) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... hat section 10B being an exemption provision, income of the 10B unit has to be excluded at the source itself before arriving at the gross total income and since this income is not at all to be in the income of the assessee, there is no occasion to set off of brought forward loss of the assessee in respect of its other business against the profits of the exempted units. - ITA No 138/Coch/2016, Cross Objection No. 19/Coch/2016 - - - Dated:- 16-5-2017 - Shri Abraham P George, AM And George George K, JM Assessee By Shri J Krishnan Revenue By Sh A Dhanaraj, SR DR ORDER Per George George K, JM This appeal, at the instance of the revenue and the cross objection preferred by the assessee, are directed against the CIT(A) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even though the adverse tax effect is below ₹ 10 lakh, the appeal can be filed by the Department in view of clause (c) of para 8 of the CBDT's Instruction No.21/2015 dt. 10-12-2015. For these and other grounds that may be advanced at the time of hearing, the order of the learned Commissioner of Income tax (Appeals) on the above points may be set aside and that of the Assessing Officer restored. 2 Briefly stated the facts in relation to the case are as follows: The assessee is a Private Limited company. It is engaged in the business of manufacturing and export of coir products. For the assessment year 2009-10, the return of income was filed on 30.9.2009 declaring loss of ₹ 3,23,66,470/-. In the return of income file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of articles or things or computer software for a ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee 10B The Act specifically states that deduction has to be allowed from the total income of the assessee. It is worthwhile to note the definition of Total Income as per Section 2(45) of the Income Tax Act. Total Income means the total amount of income referred to in section 5 computed in the manner laid down under this Act. Moreover as per Section 14 for the purposes of charge of income tax and computation of tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment. The relevant finding of the CIT(A) read as follows: The appellant rely on the decision of the Karnataka High Court in CIT vs Yokogava India Ltd (2012) 241 ITR 385(Karn) on the issue of adjustment of income from other heads. Verification of the case law show that the facts and issues involved are similar to the case of assessee, whereas Assessing Officer is relying on the order of the Hon Kerala High Court in the case of CIT vs Patspin India Ltd (2011). Verification shows that the case law quoted by the Assessing Officer is not relevant to the present situation discussed in the instant case. In view of the above, the argument of the assessee is upheld. 4 Aggrieved by the order of the CIT(A), the revenue filed appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld by the Hon ble Apex Court reported in 391 ITR 274. The relevant observations of the Hon ble Apex Court read as follows: 16. From a reading of the relevant provisions of section 10B, it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to be individual undertaking and resultantly flows to the assessee. This is also more than clear from the contemporaneous Circular NO. 794 dated 9.8.200 which states in paragraph 15.6 that, The export turnover and the total turnover for the purposes of sections 10B and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of the assessee in section10B as total income of the undertaking . 18 For the aforesaid reasons we answer the appeals and the question arising therein, as formulated at the outset of this order, y holding that though Section 10B, as amended, is a provision for deduction, the stage of deduction would be while computing he gross total income of the eligible undertaking under Chapter IV of the Act and not at the state of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly. 6 Since the issue on merit is in favour of the assessee, on account of the judgment of the Hon ble Apex Court, cited supra, we refrain from adjudicating the issue of validity of reopening of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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