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TMI Blog2013 (9) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... nless a specific statutory provision to that effect were to be made. In the absence thereof, such an approach cannot be accepted. In the circumstances, the decision of the Tribunal would have to be affirmed since it is plain and evident that the deduction under section 10A has to be given at the stage when the profits and gains of business are computed in the first instance See Black & Veatch Consulting (P.) Ltd. [2012 (4) TMI 450 - BOMBAY HIGH COURT ] - Tax Appeal Nos. 767 to 769 of 2013 - - - Dated:- 16-9-2013 - M. R. Shah And Sonia Gokani, JJ. For the Appellant : Mauna M. Bhatt ORDER M. R. Shah, J. As common question of law and facts arise in this group of Appeals and as such, they arise out of the common judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yet another notice under section 142(1) of the Act. 3.2 It appears that during the course of assessment proceedings, it was noticed that the assessee claimed excess expenditure in Mumbai Unit and diversed its expenditure there to claim higher exempt income from the Ahmedabad Unit. Accordingly, a show cause notice dated 16th December 2009 was issued to the assessee. In the said show cause notice, it was pointed out that there is no business activity from Mumbai unit of the company since financial year 2001-02, therefore, claim of expenditure in respect of Mumbai unit is only adjustment entry and diversion of expenditure of the company to enhance the profit of STPI unit at Ahmedabad to claim more deduction under section 10A of the Act, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Schmetz India (P.) Ltd. [2012] 211 Taxman 59, the Tribunal by impugned judgment has allowed the appeal preferred by the assessee and quashed the order passed by CIT (A) as well as that of the Assessing Officer. 6. Feeling aggrieved and dissatisfied with the impugned common order dated 8th March 2024 passed by the Tribunal in ITA Nos. 3404; 2405 3406/Ahd/2010 with respect to A.Ys 2005-06; 2006-07 2007-08, the Revenue has preferred the present Tax Appeals, raising aforementioned question of law. 7. Ms. Mauna Bhatt, learned advocate appearing for the appellant-Revenue has not disputed the position that the issue/question involved in the present Tax Appeals is covered by the decision of the Bombay High Court in case of Black Vea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10A of the Income-tax Act, 1961 should be allowed without adjustment of losses of other units and without adjustment of brought forward losses and/or its depreciation of earlier years. Considering the decision of the Bombay High Court in case of Black Veatch Consulting (P.) Ltd. (supra), which subsequently again came to be considered by the Bombay High Court in case of Schmetz India (P.) Ltd. (supra), the Tribunal has held the aforementioned issue in favour of the assessee and against the Revenue. 10. On perusal of the decision of the Bombay High Court in case of Black Veatch Consulting (P.) Ltd. (supra), it appears that in the said decision, the Division Bench of the Bombay High Court has considered its earlier decision rendered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently, it is evident that the basis on which the assessment has sought to be reopened is belied by a plain reading of the provision. The Assessing Officer was plainly in error in proceeding on the basis that because the income is exempted, the loss was not allowable. All the four units of the assessee were eligible under section 10B. Three units had returned a profit during the course of the assessment year, while the Crab Stick Unit had returned a loss. The assessee was entitled to a deduction in respect of the profits of the three eligible units while the loss sustained by the fourth unit could be set off against the normal business income. In these circumstances, the basis on which the assessment is sought to be reopened is contrary to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purposes of Chapter VI-A gross total income to mean the total income computed in accordance with the provisions of the Act, 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 context of the deduction which is allowable under section 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. In the circumstances, the decision of the Tribunal would have to be affirmed since it is plain and evident that the deduction under section 10A has to be given at the stage when the profits and gains of business are computed in the first instance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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