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TMI Blog2013 (1) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. (ii) The Commissioner of Income Tax (Appeals) ought to have appreciated that issue considered by the Assessing officer for the purpose of rectification is highly debatable issue and as such the Assessing Officer was not correct in amending the order under Section 154 of the Act. (iii) The Commissioner of Income Tax (Appeals) ought to have appreciated that debatable issue cannot be considered as mistake apparent from record. 3. Without prejudice to the above claim, the Appellant submitted that the Commissioner of Income Tax (Appeals) ought to have appreciated that the claim of deduction under section 10A allows an assessee to avail the benefits only for a period of 5 years out of 8 consecutive years and the Appellant had chosen the period only from Assessment Year 1999-2000 and not claimed the deduction under Section 10A for the Assessment Year 1997-98. Accordingly, the unabsorbed business loss /unabsorbed depreciation of Assessment Year 1997-98 should be allowed to be carried forward and set off in the subsequent years." 3. Facts as relevant to the grounds are that the assessee is a company involved in the business of maintenance and development of computer software. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,79,62,715 Less: Deduction u/s 80-G 4,000 TAXABLE INCOME 1,79,58,715 or 1,79,58,720 Net tax payable Rs. 17,83,430/- (Calculation sheet enclosed) This should be paid as per demand notice and challan enclosed The income computed by the assessee under sec. 115JB is adopted as it is." Subsequently, the Assessing Officer issued notice dated 27.04.2007 to the assessee stating therein that there had been a mistake apparent on the face of record since its claim of brought forward business loss and depreciation of assessment year 1997-98 of Rs. 4,90,32,291/- and Rs. 32,17,651/- respectively had been wrongly accepted. Per Assessing Officer, the assessee had claimed relief under section 10A in computing total income and therefore in claiming loss and depreciation pertaining to the assessment year 1997-98, violated section 10A(6)(ii) of the "Act". As the paper book reveals, since no representation was filed by the assessee in furtherance to the above said notice, the Assessing Officer passed rectifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No.206/Mds/07 decided on 27-7-2007]. 3. Jai Ushin Ltd. v. Dy. CIT [2009] 117 ITD 1 4. Dy. CIT v. Akay Flavours & Aromatics (P.) Ltd. [2011] 130 ITD 41. 5. Ford Business Services Centre (P) Ltd. v. Asstt. CIT [2008] 114 TTJ 881 (Chennai). and prayed for acceptance of the appeal. 6. Opposing the submissions made by the assessee, the DR representing the Revenue has strongly supported the order of the CIT(A) as well as reasons contained therein and prayed for upholding the same. 7. We have considered rival contentions at length and have also perused relevant findings as well as case law cited. Admitted facts of the case are that the assessee is a unit entitled for deduction under section 10A of the Act i.e. special provisions in respect of newly established undertaking in free trade zone. We also deem it appropriate to reproduce relevant portion of section 10A of the "Act" as follows: 10A. (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and been actually allowed the deduction in respect of depreciation for each of the relevant assessment year. 8. A perusal of the legislative history of the provision makes it clear that the same was incorporated in the "Act" with effect from 01.04.1981 by the Finance Act, 1981. Initially, it had provided tax holiday of five consecutive year beginning with the assessment year relevant to the previous year in which the concern undertaking begins manufacturing or production of the article, things or computer software. As we notice from the amendment incorporated by the Finance Act 2000 w.e.f. 01.04.2001, the period of tax holiday of five assessment year stands extended to ten consecutive assessment years. At the same time, the legislature has also prescribed certain conditions whilst computing the income after the tax holiday period is over i.e. sub-section 6 comes into play as per which, in computing the total income of the assessee of the previous year relevant to the assessment year immediately succeeding the last of relevant assessment year, no loss under section 72 or 74 relating to business of the undertaking is to be allowed to be carried forward or set off if it pertains to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect to for that assessment year itself and accordingly sub-section (2) of section 32, clause (ii) of sub-section (3) of section 32A, clause (ii) of sub-section (2) of section 33, sub-section (4) of section 35 or the second proviso to clause (ix) of sub- section (1) of section 36, as the case may be, shall not apply in relation to any such allowance or deduction ; (ii) no loss referred to in sub-section (1) of section 72 or sub-section (1) or sub-section (3) of section 74 in so far as such loss relates to the business of the undertaking, shall be carried forward or set off where such loss relates to any of the relevant assessment years ; Expln.-2 (vi) to Sec.10-A of the Act defines "relevant Assessment year" for the purpose of Sec.10-A of the Act as follows: "(vi) "relevant assessment year" means any assessment year falling within a period of ten consecutive assessment years referred to in this section,;" 41. It is clear from the aforesaid provisions that they apply during the assessment years after the end of the holiday period. Admittedly the present AY relates to the holiday period and therefore the above provisions are not applicable. In the case of Enercon Wind Farms (K ..... X X X X Extracts X X X X X X X X Extracts X X X X
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