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2020 (2) TMI 659

..... th the provisions of Chapter VI of the IT Act, 1961 - Deduction u/s 10(A) and 10(B) computation - vires of Circular dated 16.07.2013 as per the referring Circular No.7/DV/2013 (File No.279/Misc./M-116/2012-ITJ) challenged - HELD THAT:- Circulars are neither binding on the assessee or on the Court. See M/S RATAN MELTING & WIRE INDUSTRIES [2008 (10) TMI 5 - SUPREME COURT] The 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 .....

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..... h the provisions of Chapter IV of the IT Act shall be aggregated in accordance with the provisions of Chapter VI of the IT Act, 1961. This means that first the income/loss from various sources i.e., eligible and ineligible units, under the same head are aggregated in accordance with the provisions of section 70 of the Act. Thereafter, the income from one ahead is aggregated 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 pr .....

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..... ovisions. They are not binding upon the court. It is for the court to declare what the particular provision of statute says and it is not for the executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law. 4. The 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, 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. T .....

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..... side these zones or units for the purposes of this provision. 18. If the specific provisions of the Act provide [first proviso to Sections 10-A; 10-A(1-A) and 10-A(4)] that the unit that is contemplated for grant of benefit of deduction is the eligible undertaking and that is also how the contemporaneous circular of the department (No.794 dated 9-8-2000) understood the situation, 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 S .....

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..... Act, 1961. 7. Therefore, there is no necessity for the impugned circular to remain any longer. Accordingly, the impugned circular has to be declared as irrelevant in the light of the ratio of the Hon'ble Supreme Court in Commissioner of Income Tax Vs Yokogawa India Limited, 2017 2 SCC 1. The Assessing Officers are bound to complete the pending assessment or re-assessment as the case may be in terms of the above decision of the Hon'ble Supreme Court in Commissioner of Income Tax Vs Yokogawa India Limited, 2017 2 SCC 1. Therefore, the impugned circular is declared as ultra vires Sections 10(A) and 10(B) of the Income Tax Act, 1961. 8. Accordingly, the present Writ Petition stands allowed with the above observations. No costs. Conseque .....

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