2010 (12) TMI 768 - AT - Income Tax

Deduction u/s 10B - Revision u/s 263 - this issue is squarely covered in favour of the assessee by the order of the Tribunal in assessee s own case concerning asst. year 2005-06 - it was concluded by the Hon ble Special Bench of the Tribunal in Scientific Atlanta Technology Pvt. Ltd (2010 -TMI - 203909 - ITAT CHENNAI) that nowhere it is mentioned in section 10A that such deduction is to be restricted to the total income of the assessee computed under the provisions of the Act - Held that the view that the Assessing Officer is not justified in denying the deduction u/s 10A (determined at Rs.4, 78, 57, 158) for the reason that the assessee company did not have any profits left for allowing the deduction computed u/s 10A - Decided in the favour of assessee

Summary

Issues:
1. Whether losses and carry forward losses of 10B units can be set off against the profits of 10B units before computing deduction u/s 10B of the Act.

Detailed Analysis:

Issue 1:
The appeals and cross objections were against the CIT(A)'s order for the assessment years 2005-06 and 2006-07, concerning the set off of losses and carry forward losses of 10B units against profits of 10B units before computing deduction u/s 10B of the Act. For the assessment year 2005-06, the CIT(A) allowed the appeals filed by the assessee, leading to the revenue's appeal being dismissed. The Tribunal quashed the revisional order of the CIT u/s 263, making the assessment pursuant to that order non-existent. Therefore, the appeal filed by the revenue was dismissed. Similarly, for the assessment year 2006-07, the CIT(A) allowed the appeal of the assessee based on previous Tribunal orders favoring the assessee. The Tribunal dismissed the appeal filed by the revenue, citing the same reasoning as in the previous case. The cross objections filed by the assessee were also dismissed as they supported the CIT(A)'s order, which was decided in favor of the assessee.

In conclusion, the Tribunal upheld the decisions of the CIT(A) in both cases, ruling in favor of the assessee regarding the set off of losses and carry forward losses of 10B units against profits of 10B units before computing deduction u/s 10B of the Act. The appeals filed by the revenue were dismissed in both instances, and the cross objections filed by the assessee were also dismissed as they supported the CIT(A)'s decisions.