2021 (4) TMI 546 - HC - Income Tax

Exemption / deduction u/s 10A - Setting off of loss of a Unit eligible for deduction under Section 10A against the profits of other Units entitled for a similar deduction under Section 10A - HELD THAT - Second substantial question of law answered in favour of the assessee by a decision of the Hon'ble Supreme Court in the case of Commissioner of Income-tax vs. Yokogawa India Ltd. 2016 (12) TMI 881 - SUPREME COURT

Summary

Issues:
1. Interpretation of the scope of appeal under Section 260-A of the Income Tax Act, 1961.
2. Adjudication on the setting off of losses against profits under Section 10A of the Act.
3. Remand of the matter for de novo consideration by the CIT(A).

Analysis:

1. The appellant filed an appeal under Section 260-A of the Income Tax Act against an order passed by the Income Tax Appellate Tribunal. The substantial questions of law raised included whether issues arising from the order passed by the CIT under Section 263 of the Act can be appealed against before the Tribunal, even if the CIT(A) had dismissed the appeal against the original assessment order as infructuous due to the assessment order being set aside for a fresh assessment. The Tribunal's jurisdiction in such scenarios was questioned.

2. During the proceedings, the appellant contended that substantial questions (i) and (iii) had become academic due to the passage of time. The second substantial question (ii) regarding the setting off of losses of a Unit eligible for deduction under Section 10A against profits of other eligible Units was argued in favor of the appellant, citing a Supreme Court decision in Commissioner of Income-tax vs. Yokogawa India Ltd. The appellant's position on this issue was supported by the absence of dispute from the revenue's counsel.

3. Consequently, the Court found that substantial questions (i) and (iii) did not require an answer due to being rendered academic. The second substantial question (ii) was resolved in favor of the appellant and against the revenue. As a result, the impugned order was quashed in relation to substantial question No.(ii), leading to the disposal of the appeal.

This detailed analysis of the judgment highlights the key legal issues addressed by the Court, the arguments presented by the parties, and the final decision rendered by the Court on each issue.