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TMI Blog2012 (11) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of the assessee could include the profits/losses derived from such unit and if there is any profit, then the eligible amount will be deducted in computing total income. Thus it can be seen that provisions of Sec. 10A are in the nature of deduction and not exemption. Sec.14A is applicable only in respect of “expenditure incurred” in respect of income which is not includible in total income and does not deal with the losses. Losses cannot be construed to be expenditure. Therefore, all the provisions of the Act would be applicable for the purpose of computing the total income of the assessee, unless expressly by the Legislature - in favour of assessee. - ITA No 732/Ahd/2010 - - - Dated:- 12-10-2012 - SHRI D. K. TYAGI SHRI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction u/s. 24(a) of the Act at 30% the income from house property was shown at Rs.12,44,312/-.The assessee has also shown interest income of Rs.10,649/-.Thus the total income after considering the income from house property and other source worked out to Rs. 12,94,496/- from which assessee set off the loss of the business amounting to Rs.14,64,017/- the income from which it had claimed to be exempt u/s. 10A of the Act. The A.O. was of the view that provisions of section 14A of the Act does not permit the assessee to claim expenditure incurred in relation to income not includible in total income and therefore, the claim of the assessee being loss of Rs.14,64,017/- was not allowable to be adjusted against the rental income and interest acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the CIT (A) are distinguishable in view of the fact that provisions of Sec. 10A(8) were not considered by Hon ble ITAT. He thus strongly supported the order of A.O. 8. On the other hand, the Ld. A.R. submitted that provisions of Sec.10A are not in the nature of an exemption but it provides for a deduction and therefore provisions of Sec. 14A are not applicable. The Ld. A.R. further submitted that provisions of Sec. 10A (8) are not at all relevant in the present case. It was also submitted that there is no bar if Sec. 71 of the Act to set off loss from one head of Income against income from other head. He also relied on the decision in the case of Sovika Infotex Ltd. (supra) and Hindustan Unilever Ltd. vs. DCIT (2010) 325 ITR 102 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um.) 1166 the Co-ordinate Bench has held that Sec. 14A of the Act is applicable qua the expenditure and not qua the loss. 10. In the case of Sovika Infotech Ltd. vs. ITO (2008) 23 SOT 271 (Mum.), the Co-ordinate Bench has held as under:- 7. Now the question arose as to whether the loss incurred in the business eligible under section10B could be set-off against the other income of the assessee under section 70 or 71. It is settled that the income from the eligible business under section 10B is to be taken into consideration in computing the total income of the assessee. Therefore, all the provisions of the Act would be applicable for the purpose of computing the total income of the assessee, unless expressly by the Legislature. The pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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