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TMI Blog2016 (6) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions prescribed in the section and therefore such reopening proceedings are unlawful, unwarranted, not tenable in law and not in accordance with the provisions of the Act. The assessment framed thereunder is therefore be declared as null and void. Just and proper relief be granted to the appellant on this score. 2. Assuming without admitting that the proceedings of reopening are lawful and tenable in law, on facts and circumstances prevailing in the case and as per provisions scheme of the Act it be held that deduction u/s. 10B claimed in respect of its Mahad Unit is to be allowed before setting off the unabsorbed depreciation / losses as per the provisions scheme of the Act and the judicial pronouncements made in this behalf. The deduction u/s. 10B be allowed as claimed by the appellant before setting off the unabsorbed depreciation. Just and proper relief be granted to the appellant on this score. 3. The learned Authorized Representative for the assessee at the outset pointed out that the issue raised in the present appeal is in respect of claim of deduction under section 10B of the Act to be allowed before setting off of unabsorbed depreciation / losses, is squ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laimed deduction under section 10B of the Act in the instant assessment year for the first time. The Assessing Officer was of the view that if profits of Mahad unit were considered as only unit of company, then the entire depreciation of ₹ 6,87,56,091/- which relates to the said unit should have been first adjusted against the profits of said unit and thereafter, deduction under section 10B of the Act should have been allowed on the balance profits of Mahad unit. The assessee argued that since section 10B of the Act was covered in Chapter II of the Act, provisions of Chapter VA(c) should not be applied in the case. Reliance was placed on the ratios laid down by the Hon ble Bombay High Court in CIT Vs. Black Veatch Consulting (P.) Ltd. (supra) and in Hindustan Unilever Ltd. Vs. DCIT (2010) 325 ITR 102 (Bom). The Assessing Officer was of the view that the facts of the case before the Hon ble Bombay High Court were different as the decision related to the claim of deduction under section 10A of the Act. Another distinction drawn by the Assessing Officer was that in the case before him, the deduction under section 10B of the Act was claimed without setting off of brought forwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the ratio laid down by the Hon ble Supreme Court in Himasingka Seide Ltd. Vs. CIT (supra). The perusal of the judgment of Hon ble Karnataka High Court in the said case reflects that the years under appeal related to assessment years 1988-89 to 1990-91 i.e. the years where the benefit under section 10B of the Act was for being exempt from total income. However, the year under appeal before us is assessment year 2005-06, wherein the said section has been amended and the deduction now is allowable to the assessee as against the said income being exempt in the earlier years. The issue is settled by the Hon ble Bombay High Court in CIT Vs. Black Veatch Consulting Pvt. Ltd. (2012) 348 ITR 72 (Bom), wherein it was held as under:- The deduction under s. 10A, has to be given effect to at the stage of computing the profits and gains of business. This is anterior to the application of the provisions of s.72 which deals with the carry forward and set off of business losses. A distinction has been made by the Legislature while incorporating the provisions of Chapter VI-A. Section 80A(1) stipulates that in computing the total income of an assessee, there shall be allowed from hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case. The issue in the present appeal is squarely covered by the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Black Veatch Consulting Pvt. Ltd. (supra), wherein deduction under section 10A of the Act was to be computed in the hands of assessee and the same was whether the brought forward losses had to be adjusted before computing deduction under section 10A of the Act. It may be pointed out that the provisions of section 10A and 10B of the Act are at parametria. Following the ratio laid down by the Hon ble Bombay High Court, we hold that the deduction under section 10B of the Act is to be computed in the hands of the assessee before adjusting brought forward unabsorbed losses/depreciation. The ground of appeal No.3 raised by the assessee is thus, allowed. 8. The perusal of the order of Tribunal at para 27 would reflect that the Tribunal had considered the ratio laid down by the Hon ble Supreme Court in Himasingka Seide Ltd. Vs. CIT in Civil Appeal No.1501 of 2008, judgment dated 19.09.2013 and it was noted that the judgment in the case related to assessment years 1988-89 to 1990-91 i.e. the years where the benefit under section 10B of the Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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