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2020 (2) TMI 659

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..... clarification given in the impugned circular now stands diluted in the light of the decision of the Hon'ble Supreme Court in Commissioner of Income Tax Vs Yokogawa India Limited [2016 (12) TMI 881 - SUPREME COURT] . wherein held hough Section 10-A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. The Hon'ble Supreme Court has clarified that its decision rendered in the context of Section 10(A) of the Income Tax Act, 1961 will equally apply to Section 10(B) of the Income Tax Act, 1961. Therefore above circular is no longer binding on the Asses .....

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..... ted with the income or loss of the other head in accordance with the provisions of section 71 of the Act. If after giving effect to the provisions of section 70 and 71 of the Act there is any income (where there is no brought forward loss to be set off in accordance with the provisions of section 72 of the Act) and the same is eligible for deduction in accordance with the provisions of Chapter VI-A or section 10A, 10B etc. of the Act, the same shall be allowed in computing the total income of the assessee. 5.3. If after aggregation of income in accordance with the provisions of section 70 and 71 of the Act, the resultant amount is a loss (pertaining to AY 2001-02 and any subsequent year) from eligible unit it shall be eligible for carry for .....

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..... on of the Hon'ble Supreme Court in Commissioner of Income Tax Vs Yokogawa India Limited, 2017 2 SCC 1. The Hon'ble Supreme Court has clarified that its decision rendered in the context of Section 10(A) of the Income Tax Act, 1961 will equally apply to Section 10(B) of the Income Tax Act, 1961. In Paragraph 2, the Hon'ble Supreme Court has observed as under:- 2. The true and correct meaning and effect of the provisions of Section 10-A of the Income Tax Act, 1961 (herein referred to as the Act ) is the principal issue arising for determination of the Court. At the outset, it must be made clear that the decision of this Court with regard to the provisions of Section 10-A of the Act would equally be applicable to cases governed by t .....

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..... ituation, it is only logical and natural that the stage of deduction of the profits and gains of the business of an eligible undertaking has to be made independently and, therefore, immediately after the stage of determination of its profits and gains. At that stage the aggregate of the incomes under other heads and the provisions for set off and carry forward contained in Sections 70, 72 and 74 of the Act would be premature for application. The deductions under Section 10-A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the assessee from the gross total income. The somewhat discordant use of the expression total income of the assessee in Section .....

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