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TMI Blog2015 (9) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ater order dated 27.9.2013. Assessment Year 2003-04 3. The only issue raised in this appeal through various grounds is against reducing the amount of brought forward loss of Rs. 72,70,234/- for the A.Y. 2002-03 from the profits and gains of the undertaking for the current year, for the purposes of computing the amount of deduction u/s 10A of the Income-tax Act, 1961 (hereinafter called `the Act'). 4. Briefly stated, the facts of the case are that the assessee claimed deduction u/s 10A of the Act at the rate of 90% of the profits of the business. The AO observed that while computing the profits of the business, the assessee did not reduce the amount of brought forward business loss for the assessment year 2002-03 amounting to Rs. 72,70,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or things or computer software, as the case may be, shall be allowed from the total income of the assessee'. The Finance Act, 2002, w.e.f. 1.4.2003 inserted third proviso to sub-section (1) which provides that : `for the assessment year beginning on the 1st day of April, 2003, the deduction under this sub-section shall be ninety per cent of the profits and gains derived by an undertaking from the export of such articles or things or computer software'. Sub-section (4) of section 10A provides that : `For the purposes of sub-sections (1) and (1A), the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision, neither there arises any income attracting tax nor there results any loss eligible for set off or carry forward. On the other hand, in the case of deduction provision, there arises income otherwise chargeable to tax but subject to deduction and loss results which is available for set off and carry forward. 8. When we turn to section 10A for the assessment years 2001-02 onwards, it can be seen that it has been made a deduction provision. Under such circumstances, income from the eligible unit is firstly includible in the total income, subject to deduction; and loss, if any, is eligible for set off and carry forward. In the present circumstances, we are confronted with a situation in which the assessee suffered loss from the elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar before allowing deduction u/s 10A. 9. Our view is fortified by a judgment of the Hon'ble Supreme Court in the case of CIT vs Himatsingike Seide Ltd. (2015) 228 Taxman 63 (SC). In this case, it has been held that after 1.4.2001, when section 10B has become a deduction provision, the unabsorbed depreciation or b/fd business loss shall be considered as normal business loss etc. without any reference to eligible unit. Such loss etc. shall be eligible for carry forward and set off as per normal provisions. The crux of the matter is that unabsorbed depreciation and business loss of the eligible unit brought forward from earlier years have to be set off against the profits before computing relief u/s 10B. There is no material difference on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder u/s 147 of the Act. The ld. CIT(A) dismissed the assessee's appeal. 15. The contention of the ld. AR through the first two grounds is that the AO ought to have disposed of the assessee's objections raised against the reasons for initiation of re-assessment before venturing to finalize the assessment u/s 147. 16. We have heard the rival submissions and have perused the relevant material available on record. Page 19 of the paper book is a copy of the objections taken by the assessee before the AO against the initiation of re-assessment proceedings. It is a matter of record that the AO, without separately disposing off such objections, proceeded to make an assessment u/s 147 of the Act. This course of action followed by the AO is in con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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