2016 (2) TMI 305 - HC - Income Tax

Computation of deduction u/s 10A - whether loss of another unit of the assessee company cannot be set off against the profit of the unit eligible for deduction u/s 10A as held by ITAT - Held that - No fault can be found with the impugned order of the Tribunal, inasmuch as it follows the order of this Court in Black and Veatch Consulting Pvt. Ltd. (2012 (4) TMI 450 - BOMBAY HIGH COURT ) wherein held Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A gross total income to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter Decided against revenue.

Summary

Issues:
1. Appeal challenging the order of the Income Tax Appellate Tribunal regarding deduction u/s 10A of the Income Tax Act, 1961 for Assessment Year 2005-06.

Analysis:
The appeal under Section 260A of the Income Tax Act, 1961, challenged the Tribunal's order dated 18th June, 2013, related to the Assessment Year 2005-06. The primary issue raised was whether the Tribunal was correct in upholding the order of the CIT(A) that the loss of one unit of the assessee company cannot be set off against the profit of another unit eligible for deduction u/s 10A of the Income Tax Act 1961. The Tribunal's decision was based on the precedent set by the High Court in a similar case involving Black and Veatch Consulting Pvt. Ltd. The Revenue contended that the appeal was justified based on a Circular by the Central Board of Direct Tax. However, the Court found no fault with the Tribunal's decision, stating that the issue was already settled by the High Court's previous judgment. The Court emphasized the importance of not filing appeals casually to prevent harassment of taxpayers.

In response to the appeal, the Court noted that the Revenue failed to provide any evidence of filing an appeal or obtaining a stay from the Apex Court regarding the previous judgment in Black and Veatch Consulting Pvt. Ltd. The Court highlighted that the decision of the High Court was binding on all officers within the State of Maharashtra. Despite the Revenue's attempt to justify the appeal based on a Circular, the Court found no merit in challenging the Tribunal's order, which was in line with the High Court's decision. Consequently, the Court dismissed the appeal, emphasizing that the framed question did not give rise to any substantial question of law, as the issue had already been conclusively settled by the previous judgment.