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TMI Blog2015 (11) TMI 1522X X X X Extracts X X X X X X X X Extracts X X X X ..... OWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For the Appellant : Shri Kishore Phadke For the Respondent : Shri Hitendra Ninawe ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the assessee is against the order of CIT(A)-I, Pune, dated 18.01.2012 relating to assessment year 2007-08 against order passed under section 143(3) of the Act of the Income-tax Act, 1961 (in short the Act ). 2. The learned Authorized Representative for the assessee at the outset pointed out that the issue raised in the present appeal is squarely covered by the order of Tribunal in M/s. Vishay Components India Pvt. Ltd., Vs. Addl.CIT in ITA No.551/PN/2014 and Addl.CIT Vs. M/s. Vishay Components India Pvt. Ltd. in ITA No.736/PN/2014, relating to assessment year 2005 -06, order dated 08.10.2015, which in turn has been followed in Precision Camshafts Limited Vs. ACIT in ITA No.70/PN/2012 and ACIT Vs. Precision Camshafts Limited in ITA No.72/PN/2012, relating to assessment year 2007-08, order dated 10.11.2015. The learned Authorized Representative for the assessee pointed out that the issue raised in the present appeal is covered by grounds of appeal No.1 and 7 and rest of the grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CIT(A) vide para 3.3 onwards considered the issue at length and observed that the assessee admittedly, was having only one unit / undertaking, on which deduction under section 10A of the Act was allowable and brought forward losses and unabsorbed depreciation also related to the same undertaking. The CIT(A) was of the view that before computing deduction under section 10A of the Act, brought forward losses and unabsorbed depreciation had to be set off and only on the balance income, if any, the deduction under section 10A of the Act was to be computed. 5. We find that identical issue of sequences of allowing the benefit of deduction under section 10B of the Act and the adjustment of brought forward losses / unabsorbed depreciation, arose before Pune Bench of Tribunal in M/s. Vishay Components India Pvt. Ltd. Vs. Addl.CIT Anr. (supra). The Tribunal after considering the facts of the case, which are identical to the facts before us, observed as under:- 27. We have heard the rival contentions and perused the record. The issue arising vide ground of appeal No.3 is in relation to the computation of deduction under section 10B of the Act after the amendment to section w.e.f. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , before making any deduction under the Chapter. What the Revenue in essence seeks to attain is to telescope the provisions of Chapter VI-A in the content of the deduction which is allowable under s.10A, which would not be permissible unless a specific statutory provision to that effect were to be made. In the absence thereof, such an approach cannot be accepted. Thus ITAT was correct in holding that the brought forward unabsorbed depreciation and losses of the unit the Income which is not eligible for deduction under s.10A of the Act cannot be set off against the current profit of the eligible unit for computing the deduction under s.10A of the IT Act. 28. The said proposition of law has further been applied by the Hon ble Bombay High Court in CIT Vs. M/s. Ganesh Polychem Ltd. in Income Tax Appeal No.2083 of 2012, order dated 25.02.2013 and in CIT Vs. Schmetz India Pvt. Ltd. (2012) 79 DTR (Bom) 356 and also by the Hon ble High Court of Gujarat in CIT Vs. Ace Software Exports Ltd. in Tax Appeal No.687 of 2012, order dated 18.02.2013. The Mumbai Bench of Tribunal has also applied the said proposition in various cases. 29. The learned Departmental Representative for the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts arising in the present case are similar to the facts before the Tribunal in Vishay Components India Pvt. Ltd. Vs. Addl.CIT Anr. (supra) and following the same parity of reasoning, we hold that the deduction under section 10B of the Act would be allowed to the assessee in the first instance before allowing the adjustment on account of brought forward depreciation losses, the deduction under section 10B of the Act is to be first allowed against the eligible profits and in case there are any leftover profits, then the same are to be adjusted against brought forward unabsorbed depreciation / loss as claimed by the assessee in its return of income. Accordingly, we direct the Assessing Officer to re-compute the deduction under section 10B of the Act in the hands of the assessee. The additional ground of appeal Nos.1 and 2 raised by the assessee are thus, allowed. 7. The issue arising before us is in relation to the computation of deduction under section 10A of the Act, which admittedly is paramatria to section 10B of the Act and hence, the ratio laid down by the Tribunal in M/s. Vishay Components India Pvt. Ltd., Vs. Addl.CIT (supra) and Precision Camshafts Limited Vs. ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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