2015 (12) TMI 909 - HC - Income Tax

Brought forward unabsorbed loss/ depreciation of the assessee s 10B unit - set off against the current year s profit of the same 10B unit allowed or not ? - Held that - The issue as raised stands concluded by the decision of this Court in Black & Veatch Consulting(P) Ltd.(2012 (4) TMI 450 - BOMBAY HIGH COURT ) and Ganesh Polychem Ltd. Vs. ITO 2012 (8) TMI 953 - ITAT MUMBAI against the Revenue. Tribunal was right in holding that the brought forward unabsorbed depreciation and losses of the unit, the income of which is not eligible for deduction u/s.10B of the Act cannot be set off against the current profit of the eligible unit for computing the deduction u/s.10B of the Act - Decided in favour of assesee

Summary

Issues: Appeal challenging Tribunal's order on set off of unabsorbed loss/depreciation against current year's profit for a 10B unit; Interpretation of Section 10B of the Income Tax Act, 1961; Conflict between High Court decisions and Apex Court's dismissal of appeal.

The High Court addressed an appeal under Section 260-A of the Income Tax Act, 1961, challenging the Tribunal's order for the Assessment year 2009-10. The main issue raised was whether the unabsorbed loss/depreciation of the assessee's 10B unit could be set off against the current year's profit of the same unit. The Tribunal's decision was influenced by previous court rulings, including "CIT Vs. Black & Veatch Consulting (P) Ltd." and "Ganesh Polychem Ltd. Vs. ITO." The Revenue contested this decision, citing a contrary view from the Karnataka High Court in "CIT Vs. Himatasingike Seide Ltd." upheld by the Apex Court. However, the High Court noted that the Karnataka High Court's decision was based on the pre-2001 version of Section 10B, different from the current provision applicable to the case at hand.

The High Court emphasized that legal decisions must align with the current law in question. It highlighted that the Karnataka High Court's decision, undisturbed by the Apex Court, was based on a previous version of Section 10B, rendering it inapplicable to the current scenario. The Court reiterated that the issue had already been settled by its previous rulings in "CIT Vs. Black & Veatch Consulting (P) Ltd." and "Ganesh Polychem Ltd. Vs. ITO," which favored the assessee. Therefore, the Court concluded that the question of law proposed did not raise any substantial issue, leading to the dismissal of the appeal with no order as to costs.