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TMI Blog2010 (3) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the AO and he proceeded to deny the exemption claimed by the assessee u/s 10A on the premise that the assessee has exercised the option not to claim benefit of section 10A in return filed for the A.Y. 2000-01. 4. Upon assessee's appeal ld. CIT(A) elaborately considered the case laws and legislative history in this regard and concluded as under in appellate order for 2001-02. I have gone through the order of the AO and also the written submissions of the appellant. The AO is of the view that once the assessee has opted for not availing the benefits u/s 10A by giving such option u/s10A(7) which has an overriding effect on this section then subsequently, it cannot claim the advantages of section 10A. It has also been stated by him that the company has not availed any deduction u/s 80HHE by its own option. However, the AO has not appreciated the facts and the relevant law on the said issue. In my opinion, the assessee is free to exercise this option of not availing or availing the benefits of section 10A as per its own convenience. In the first year of its operation, the appellant had given a note in the return itself that as they had no positive income from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re for the assessment year 2000-01, as such there arose no question/ occasion of exercising such an option. Without prejudice to the aforesaid, the Hon'ble Tribunal in the case of Legato Systems India Pvt. Ltd. vs. ITO reported in 93 TTJ 828, which has been upheld in the case of reported in 203 CTR 101 has held that even where a deduction had been claimed u/s 80HHE and the assessee had opted by an exercising an option not to claim deduction under any other provision, a deduction allowable u/s 10A of the Act cannot be denied. In the case of the assessee, in fact even deduction u/s 80HHE of the Act had not been either claimed or allowed in the preceding year. 6.1 It has further been claimed that the AO had allowed deduction u/s 10A of the Act for the A.Y. 2005-06. It has further been submitted that no deduction had been claimed for the A.Y. 2000-01 as there were not profits. It has been claimed that AO has went on misconceived assumption that assessee had decided not to claim u/s 10A for the A.Y. 2000-01 and therefore, deduction is not allowable in view of the provision of section 10A(7) of the Act. It has further been submitted that no deduction has ever been claimed u/s 80H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 569 (Del) and also by Gujarat High Court in Anant Mills Ltd. Vs. CIT (1993) 109 CTR (Guj) 231 : (1994) 206 ITR 582 (Guj) and Bombay High Court in Kantilal Chimanlal Shah vs. CIT (1954) 26 ITR 303 (Bom). 6.5 In the aforesaid case the Tribunal after evaluating the facts and circumstances of the case had restored the matter to the files of the AO to allow exemption u/s. 10A, if the assessee is found to have satisfied requisites envisaged in section 10A of the Act. In case the exemption u/s 10A was not allowed for the reasons by not satisfying the requisites the claim u/s 80HHE was to be allowed, after providing opportunity to meet the requisites. This decision of the Tribunal was the subject matter of the adjudication by the Hon'ble Jurisdictional High Court in the case of 203 CTR 101. The order of the Court is as under:- The Tribunal has recorded a finding of fact that the respondent- assessee was not an old unit already in existence so as to be disentitled to the benefit of exemption under s. 10 A of the IT Act, 1961. It has, on that finding, remitted the matter back to the AO with the following directions: We, therefore, set aside the orders of the authorities bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However we find that in the orders of the authorities below the primary discussion has been the applicability of sub- section (8) of section 10A. Other aspects as to whether the requisites of sub- section 10(A) have been complied with or not, have not been gone through. Respectfully following the precedent from the aforesaid Tribunal's decision and also the Jurisdictional High Court decision, we remit the issue to the files of the AO with the directions to allow exemption u/s 10A in all the assessment years in this regard, if the assessee is found to be satisfying all other requisites envisaged in the scheme of section 10A of the Act In case the exemption u/s. 10A cannot be allowed for the reasons of not satisfying the requisites the claim of deduction u/s 80HHE shall be allowed after providing opportunity to meet the requisites. Needless to add assessee shall be granted adequate opportunity of being heard. 7. Another issue raised in A.Y. 2001-02 is that on the facts and circumstances of the case, the ld. CIT(A) has erred in directing the AO to set off the loss of ₹ 4,34,80,277/-. 7.1 On this issue there is no discussion in the assessment order. However, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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