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TMI Blog2016 (5) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... a High Court in the case of Himatsingike Seide Ltd. - 286 ITR 255, which was based on the erstwhile exemption section, whereas the appellant had claimed deduction based on the provisions of revised sec.10A of the ITA, 1961. 4. The learned CIT(A)-I, Pune erred in law and on facts in not appreciating that facts pertaining to the case of Himatsingike Seide Ltd. (supra) pertains to set off of brought forward un-absorbed depreciation against profit of eligible business. As such, the ratio of the said case cannot be applied in the case of the appellant. 5. The learned CIT(A)-I, Pune erred in law and on facts in not appreciating that provisions of sec. 2(45) of the ITA, 1961 cannot be imported for the purpose of determining profits to be deducted from the total income under sec.10A. 6. The learned CIT(A)-I, Pune erred in law and on facts in not appreciating the submissions made by the appellant pertaining to various judicial precedents wherein facts identical to the case the appellant have been dealt. 7. The learned CIT(A)-I, Pune erred in law and on facts in importing the provisions of Circular No.7/DV /2013 dated 16/07/2013 whereas the said circular was not available at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim of deduction under section 10A of the Act by eligible unit arose before the Tribunal in M/s. KPIT Cummins Infosystems Ltd. Vs. DCIT (supra). In the facts of the said case, the assessee was claiming deduction under section 10A of the Act in respect of export of software in eight units at different places, out of which five units had declared positive profits and balance three units had declared losses for the captioned assessment years. The assessee had claimed deduction under section 10A of the Act unit-wise, whereas the Assessing Officer was of the view that the said deduction under section 10A of the Act is to be allowed to the assessee after setting off of losses of three units against the profits of five units and on the balance, the assessee was entitled to claim the said deduction. The Tribunal after considering the issue and the ratio laid down by various decisions of Hon'ble Bombay High Court, was of the view that the deduction under section 10A of the Act is unit specific and the assessee was entitled to claim the deduction in respect of profits of eligible units and the losses sustained by any unit had to be set off against normal business profits and are to be carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y an enterprises, whether the intra head adjustment of losses of certain units is to be made against the profits of other units of the same assessee, before computing the deduction under section 10A of the Act. 14. The Hon'ble Bombay High Court in Hindustan Unilever Ltd. Vs. DCIT & Anr. (supra) in an appeal relating to assessment year 2004-05 where reassessment proceedings were initiated under section 147/148 of the Act on several issues, considered the reason to believe recorded by the Assessing Officer with regard to set off of loss incurred by unit eligible for deduction u/s. 10B of the Act. The Assessing Officer had reopened the assessment on the surmise that since the income of the Crab Stick Unit was exempted from tax under section 10B, the loss of that unit was wrongly set off against the normal business income. The Hon'ble High Court noted that after the substitution of section 10B of the Act by the Finance Act of 2000, the provisions provided for deduction of such profit or gains as were derived by 100% EOU for the period prescribed under that section. The Hon'ble High Court thus held that the basis on which the assessment was sought to be reopened was belie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss total income of the assessee, losses suffered by it in earlier years have to be adjusted and if gross total income of assessee is nil then the assessee would not be entitled to deduction under Chapter VI-A. 17. The authorities below have further placed reliance on the provisions of section 70(1) for the proposition of set off of loss from one source against income from another source under the same head of income. The provisions of section 10A and 10B of the Act are para materia. In such a situation the ratio laid down by the jurisdictional High Court in Hindustan Unilever Ltd. Vs. DCIT & Anr. (supra) are to be applied. The Hon'ble High Court had held that where three units of the assessee had returned profit during the course of assessment year and one unit had returned the loss, the assessee was entitled to deduction in respect of the profits of three eligible units, while the loss sustained by the fourth unit could be set off against normal business income. Applying the said ratio to the facts of the present case we are of the view that the deduction u/s. 10A and 10B are units specific in contradiction to be assessee specific. The assessee while claiming the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X
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