2012 (9) TMI 1047 - AT - Income Tax

Summary

Issues involved: Cross appeals u/s 10B deduction computation.

Issue 1 - Computation of deduction u/s 10B:
The assessee, a chemical manufacturing company, filed its return claiming exemption u/s 10B. The AO noted that the assessee did not set off brought forward losses and unabsorbed depreciation before claiming the deduction u/s 10B. The AO set off the losses and depreciation against the business income, restricting the deduction u/s 10B. The CIT(A) held that unabsorbed depreciation should be set off against current year's profit, but directed the AO to compute the deduction u/s 10B without setting off brought forward business losses. Both the assessee and Revenue appealed. The Tribunal referred to a previous decision in favor of the assessee for a similar issue and a Bombay High Court decision, ruling in favor of the assessee. Following the High Court decision, the Tribunal directed the AO to allow the deduction u/s 10B without setting off the losses and depreciation, as claimed by the assessee. The assessee's appeal on this issue was allowed, and the Revenue's appeal was dismissed.

Issue 2 - Credit of TDS:
The assessee also raised a ground regarding the claim for credit of TDS. The counsel for the assessee requested the AO to allow the credit after verifying the relevant records. The Tribunal directed the AO to verify and allow the claim for credit of TDS. The assessee's appeal on this ground was treated as allowed for statistical purposes.

In conclusion, the appeal of the Revenue was dismissed, and the appeal of the assessee was allowed regarding the computation of deduction u/s 10B and the claim for credit of TDS.