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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 ..... n positive income for the year under consideration, such brought forward loss from the eligible unit suffered during the immediately preceding year is required to be reduced from the amount of eligible profits for the current year before granting deduction u/s 10A. The assessee cannot be allowed to eat the cake and have it too, by claiming on one hand that there is a business loss from the eligible unit for the preceding year which should be allowed to be carried forward and, at the same time, claim that such brought forward business loss should not be set off against the income of the eligible unit for the succeeding year while allowing deduction u/s 10A. If the assessee’s contention is accepted, it would make section 10A a deduction provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses. - ITA Nos.104 & 105/Del/2011 - - - Dated:- 27-2-2015 - SHRI R.S. SYAL AND AND SHRI I.C. SUDHIR, JJ. For The Assessee : Shri Arun Bansal, CA For The Department : Shri J.P. Chandrakar, Sr. DR ORDER PER R.S. SYAL, AM: These two appeals by the assessee relate to the assessment years 2003-04 and 2004-05. Since common issues have been raised in both the appeals, we are disposing them off by this consolidated order for the sake of convenience. 2. This is a recalled matter inasmuch as the earlier ex parte decision rendered by the tribunal on 6.8.2012 was subsequently recalled vide its later order dated 27.9.2013. Assessment Year 2003-04 3. The only issue raised in this appeal through various grounds is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the business for the current year before allowing deduction u/s 10A as has been held by the authorities below or be ignored as argued by the ld. AR. 6. In order to answer this question, it is apposite to note the prescription of sub-section (1) of section 10A, which provides that: 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 year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision. What is true in respect of positive income is also true in respect of negative income, i.e., loss. In other words, loss from an eligible unit qualifying for exemption, does not enter into computation of total income. Such a loss is ignored at the very outset and is not taken into consideration while computing the total income similar to what is done with the exempt income. However, in the case of a deduction provision, loss of an eligible unit is computed and then after permissible set off is carried forward to the subsequent years as per the relevant provisions of the Act. The crux of the matter is that in the case of an exemption provision, neither there arises any income attracting tax nor there results any loss eligible fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , at the same time, claim that such brought forward business loss should not be set off against the income of the eligible unit for the succeeding year while allowing deduction u/s 10A. If the assessee s contention is accepted, it would make section 10A a deduction provision for the A.Y. 2002-03 and an exemption provision for the A.Y. 2003-04, which is manifestly impermissible because section 10A has been statutorily made a deduction provision from the A.Y. 2001-02. As the assessee rightly claimed the carry forward of loss from the eligible unit for the immediately preceding year, such loss is required to be set off against the income for the current year before allowing deduction u/s 10A. 9. Our view is fortified by a judgment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forward business loss and secondly, such loss is from eligible unit and not non-eligible units. 11. We, therefore, approve the view taken by the ld. CIT(A) on this issue. 12. In the result, the appeal is dismissed. Assessment Year 2004-05 13. The first two grounds of this appeal by the assessee are against the non-disposal of objections taken by the assessee against the reasons recorded for re-opening of the assessment. 14. Briefly stated, the facts of the case are that original assessment in this case was completed u/s 143(3) on 12.12.2006. Thereafter, the AO recorded reasons as have been reproduced on page 1 of the assessment order and proceeded to pass the order u/s 147 of the Act. The ld. CIT(A) dismissed the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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