TMI Blog2022 (11) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ia Ltd. [ 2016 (12) TMI 881 - SUPREME COURT] wherein the issue has been dealt with by the Hon ble Supreme Court in respect of section 10A which according to the Ld. Counsel is equally applicable to cases governed by the provisions of section 10B in view of the said later provision being pari materia with section 10A of the Act though governing a different situation. We answer the appeals and the questions arising therein, as formulated at the outset of this order, by holding that though Section 10A, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjusting set off of losses. Section 10B though forms part of chapter III of the Act but is a deduction section, as made clear from the plain reading of the said section 10B, and is therefore, governed by provisions of section 80A r.w.s. 80AB of the Income Tax Act, 1961. Therefore, the principles that the deduction shall not exceed the gross total income as enumerated in section 80A is applicable to this deduction. 4. For these and other grounds that may be adduced at the time of the hearing, the order of the GIT(A) may be set aside and the order of the Assessing officer restored. 4. From the grounds of appeal above, we note that the issue before us is relating to setting off of carried forward loss against the income of the un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss which is anterior to the application of provisions of section 72 dealing with carried forward and set off of business loss. 5.1. Reliance was placed on the decision of Hon ble jurisdictional High Court of Bombay in the case of Hindusthan Unilever Ltd. Vs. DCIT (2010) 325 ITR 102 (Bom.) and also in the case of CIT Vs. Black Veatch Consulting Pvt. Ltd. (2012) 348 ITR 72 (Bom.). Based on the decisions of the above cases, it was submitted that a distinction has been made by the legislature while incorporating the provisions of Chapter VIA. Section 80A(1) of the Act stipulates that in computing the total income of an assessee, there shall be allowed from its gross total income, in accordance with and subject to the provisions of the Chap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome as enumerated in section 80A is applicable to deduction claimed u/s. 10B by the assessee. 5.2. Aggrieved, assessee went in appeal before the Ld. CIT(A), who considering the submissions made by the assessee before the Ld. AO and also by placing reliance on the decision of the Hon ble jurisdictional High Court of Bombay in the case of Hindusthan Unilever Ltd.(supra) and Balance Veatch Consulting Pvt. Ltd. (supra) allowed the appeal of the assessee by directing the AO to allow Rs.2,80,99,159/- as exempt u/s. 10B to the assessee and further, to allow the carry forward of unabsorbed depreciation of Rs.2,00,58,145/- as claimed by the assessee in its return. Aggrieved, the department is in appeal before this Tribunal. 6. Ld. Sr. DR plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lated 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 the individual undertaking and resultantly flows to the assessee. This is also more than clear from the contemporaneous Circular No. 794 dated 9.8.2000 which states in paragraph 15.6 that, The export turnover and the total turnover for the purposes of sections 10A and 10B shall be of the undertaking located in specified zones or 100% Export Oriented Undertakings, as the case may be, and this shall not have any material relationship with the other business of the assessee outside these zones or units for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that though Section 10A, 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. All the appeals shall stand disposed of accordingly. 8. Considering the facts and circumstances of the case and the provisions of law so also respectfully following the decision of Hon ble Supreme Court and the Hon ble jurisdictional High Court of Bombay in the cases referred above, we find no reason to interfere in the findings given by the Ld. CIT(A) in this respect. Accordingly, the grounds of appeal by the revenue are dismissed. 9. In the result, appeal of rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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