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TMI Blog2014 (11) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... he profit available after allowing deduction under section 10A of the Act. Accordingly, we modify the order of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to compute the total income in terms of the abovesaid discussion. Applicability of provisions of section 115JB to the unit located at special economic zone? - Held that:- The profits of the special economic zone unit are not required to be included in computing the book profit under section 115JB of the Act. See Genesys International Corpn. Ltd. Versus Assistant Commissioner of Income-tax, Circle 8(1) [2012 (12) TMI 491 - ITAT MUMBAI ] - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... termined at nil figure. Hence the Assessing Officer examined the applicability of provisions of section 115JB of the Act. Though the assessee claimed that the provisions of section 115JB(6) specifically states that the provisions of section 115JB shall not apply to the units located in special economic zone, the Assessing Officer took the view that the provisions of section 115JB(6) shall apply to the units claiming deduction under section 10AA of the Act and not the units claiming deduction under section 10A of the Act. Accordingly, the Assessing Officer determined the book profit under section 115JB of the Act at ₹ 69,19,925. The learned Commissioner of Income-tax (Appeals) dismissed the appeal filed by the assessee and hence the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. The learned Departmental representative submitted that there is a difference between "unabsorbed loss" and "unabsorbed depreciation". He submitted that, as per the provisions of section 32(2) of the Act, the unabsorbed depreciation shall be added to the amount of depreciation allowable for the following year and shall be deemed to be part of that allowance. Accordingly, the learned Departmental representative submitted that the deduction under section 10A shall be allowed after setting off unabsorbed depreciation. 6. The decision rendered by the hon'ble Supreme Court in the case of Himatsingka Seide Ltd. v. CIT [2014] 2 ITR-OL 467 (SC) approves the decision rendered by the hon'ble Karnataka High Court, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quot;115JB(6). The provisions of this section shall not apply to the income accrued or arising on or after the 1st day of April, 2005 from any business carried on, or services rendered, by an entrepreneur or a developer, in a unit or special economic zone, as the case may be." 9. The above said provision was inserted by the Special Economic Zone Act, 2005 along with the provisions of section 10AA. Hence, the Assessing Officer has taken the view that the provisions of section 115JB(6) shall apply only to those assessees who can claim deduction under section 10AA of the Act and not to the assessees who claim deduction under section 10A of the Act. We notice that the co-ordinate bench of the Tribunal has considered an identical issue in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an existing special economic zone unit will also be governed by the Special Economic Zones Act, 2005. Therefore, we are of the considered view that the benefits which are to be provided to the newly established unit in special economic zone as per section 10AA of the Act will also be available to the existing units in special economic zone. Moreover, section 4(1) of the Special Economic Zones Act provides that an existing special economic zone unit shall be deemed to have been notified and established in accord ance with provisions of Special Economic Zones Act and the provisions of Special Economic Zones Act shall apply to such existing special economic zone units. It is also observed that by the Special Economic Zones Act, sub-section (6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in an unit located in special economic zone. Hence, we are of the considered view that the unit in special economic zone will be covered by sub-section (6) to section 115JB of the Act irrespective of the fact that those units were claiming deduction under section 10A of the Act. We also observe that benefit given to special economic zone unit from the applicability of provisions of section 115JB has been withdrawn by the Finance Act, 2011 by inserting a proviso to section 115JB(6) of the Act, which reads as under : 'Section 115JB(6). . . Provided that the provisions of this sub-section shall cease to have effect in respect of an previous year relevant to the assessment year commencing on or after the 1st day of April, 2012.' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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