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2024 (8) TMI 1027 - HC - Income TaxBenefit of deduction u/s 10B - HELD THAT - In the case of Commissioner of Income Tax, Chennai Vs. SRA Systems Limited 2021 (3) TMI 1133 - MADRAS HIGH COURT the Court upheld the order passed by the Income Tax Appellate Tribunal 2008 (5) TMI 661 - ITAT CHENNAI that the assessee would be entitled to deduction under Section 10A and disallowance made by the Assessing Officer was not correct. In our considered view, since the issue is covered in favour of the appellant and considering the fact that the similar fact was decided in favour of the appellant by the Income Tax Appellate Tribunal 'B' Bench, Chennai 2012 (12) TMI 522 - ITAT CHENNAI which is the appellant's own case relating to the assessment year 2007-08 we are inclined to answer the appeal in favour of the appellant.
Issues:
Availability of benefit of deduction under Section 10B of the Income Tax Act, 1961. Analysis: 1. The appellant challenged the impugned order passed by the Income Tax Appellate Tribunal regarding the availability of the deduction under Section 10B of the Income Tax Act for the assessment year 2008-09. The Tribunal had rejected the appellant's claim based on previous decisions and observations made in similar cases. 2. The dispute primarily revolved around the computation of deduction under Section 10B of the Act, specifically concerning the treatment of unabsorbed depreciation and brought forward losses. The Tribunal referred to various judicial precedents, including decisions of the Hon'ble Supreme Court and the Hon'ble Karnataka High Court, to support its conclusion that unabsorbed depreciation must be set off before computing the exemption allowable under Section 10B. 3. The appellant relied on previous decisions of the High Court and the Tribunal to support their claim for deduction under Section 10B. The appellant's counsel cited specific cases to strengthen their argument, emphasizing the importance of computing deductions under Chapter IV of the Act rather than at the stage of total income computation under Chapter VI. 4. In a case involving SRA Systems Limited, the High Court upheld the order of the Income Tax Appellate Tribunal, confirming the entitlement of the assessee to deduction under Section 10A. The Court reiterated the principles established in previous cases and dismissed the appeal filed by the Department. 5. The High Court, after considering the arguments presented by both parties and the pending appeals before the Supreme Court, concluded that the issue was settled in favor of the appellant. The Court also noted that a similar issue had been decided in favor of the appellant in a previous case, leading to the disposal of the Tax Case Appeal in favor of the appellant. 6. The judgment highlighted the importance of judicial precedents and the interpretation of relevant provisions of the Income Tax Act in determining the availability of deductions under Section 10B. The Court's decision was based on the application of established legal principles and the specific facts of the case. 7. Overall, the judgment provides clarity on the treatment of unabsorbed depreciation and brought forward losses in computing deductions under Section 10B of the Income Tax Act, emphasizing the significance of adhering to legal precedents and established principles in tax law interpretation.
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