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TMI Blog2007 (7) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... iness of these units is mainly on-site projects at customer's site abroad and off-shore projects, which are executed from India. The petitioner filed return of income for the assessment year 1999-00 relevant to the previous year ended 31st March, 1999 on 27th December, 1999 declaring loss of Rs. 14,62,89,330/-. An intimation under section 143(1) (a) of the Act dated 8th February, 2002 was issued accepting the returned loss. 2. On 27th March, 2006 the respondent No.1 issued notice under section 148 of the Act in which it was stated that he had reason to believe that the petitioner's income chargeable to tax for the assessment year 1999-00 had escaped assessment within the meaning of section 147 of the Act. It was further stated that he prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h profits and gains as are derived by an undertaking from the export of articles or things or computer software for period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertakings begins to manufacture or produce such articles or things or computer software, as the case may be shall be allowed from the total income of the assessee." The decision of Bombay ITAT "E" Bench in the case of Navin Bharat Industries Ltd. V. DCIT 90 ITD 1 is applicable to the facts of the case, wherein, it has been held in principle that losses on non 10A units has to be set off against income of 10A units. In view of this, I have reasons to believe that income to the extent of Rs. 14,62,89,334/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aped assessment and consequently, the notice is liable to be quashed and set aside. On behalf of the respondents, the learned counsel supports the notice and also relies on the Judgment of the Karnataka High Court in the case of Commissioner of Income-Tax V/s. Himatasingike Seide Ltd. reported in (2006) 255 I.T.R. 255 (Karn.). 5. The first issue that we are called upon to answer is whether in fact, the respondent had reason to believe to enable him to exercise jurisdiction to issue the notice. We have already reproduced the contents of the notice containing reasons to believe wherein the respondent No.1 has relied on the provisions of law which were inapplicable in so far as the petitioner is concerned for the relevant assessment year. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owable. The third member noted that the assessee had taken the benefit of the provision of section 10A for a period of three years, but for the relevant assessment year had not taken the benefit and opted to get the profits of the new industrial undertaking assessed under the normal provisions. On these facts, the learned third member held that a privilege cannot be to a disadvantage and an option cannot become an obligation and if the assessee does not want to avail of the benefit entitled in that respect for some reasons, that benefit cannot be forced upon him. It would be clear that the Judgment is not an authority for the proposition as to whether losses suffered being undisputedly covered by section 10A as it then stood could be set of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shall not be included in the total income of the assessee. In other words, it is clear that the income derived from an industrial undertaking by the assessee to which section 10A applies could not be included in the total income of the assessee. Once that is the case, the petitioner was right in filing the income by excluding the income of income in terms of section 10A. The learned counsel for the respondents has drawn our attention to the Judgment of the Karnataka High Court in the case of Himatasingike Seide Ltd (supra) which was considering the provisions of section 10B. After perusing the facts in issue in this case and the facts before the Karnataka High Court, in our opinion the said case is not applicable to the facts of this cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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