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TMI Blog2017 (12) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... was heard and disposed off on 21/10/2016 alongwith appeal of the Revenue in ITA No. 4112/Del/2013, wherein the appeal of the assessee was partly allowed. Subsequently, the assessee filed Miscellaneous Application requesting for rectification in order passed in ITA No. 3516/Del/2013 on two grounds, which has been partly allowed and pronounced in the open court. On the issue whether the section 10B of the Income Tax Act, 1961 (in short the Act ) is an exemption provision or a deduction provision, the Tribunal recalled its order dated 21/10/2016 on ground No. 3. of the appeal and also heard arguments of both parties on the issue in dispute after recalling the order. The ground No. 3 of the appeal reads as under: 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that provisions of Section 14A are not applicable to investment made to EOU covered under the provisions of Section 10B of the Act. 2. Before us, the Ld. counsel of the assessee contended that ground No. 3 of the appeal of the assessee was decided by the Tribunal against the assessee following the decision of the juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it cannot be denied that there is uncertainty and lack of clarity or precision in the language employed in sub-section (1). It is, therefore, not impermissible to rely on the heading or title of Chapter III and interpret the section as providing for an exemption rather than a deduction. 29. The key to the problem seems to lie in appreciating the difference between a provision which exempts an income and a provision which provides for a deduction of the income or a part thereof in computing the total income of the assessee. We have attempted to outline the difference between the two kinds of provisions in the light of the authorities cited above. The matter is not altogether free from difficulty. However, as S. Ranganathan, J. (as he then was) has pointed out in CIT v. Dalmia Cement (Bharat) Ltd. (supra): - In the process of judicial assessment of such conflicting interpretations, there is no sensitive balance with which to weigh the pros and cons and determine with scientific accuracy which side is the weightier and, perhaps in the drawing of the ultimate inference one way or the other, the subjective element is not altogether excluded. 30. With this cautio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue in dispute. The ground No. 3 of the appeal of the assessee is accordingly, dismissed. 6. We find that the Hon ble Supreme Court in CIT versus TEI Technologies Private Limited (Civil Appeal No. 8923-8924 of 2013 decided on 16/12/2016) reported as CIT Another versus M/s Yokogava India Ltd (2016) 391 ITR 274 (Civil Appeal No. 8498 dated 16/12/2016) has held that section 10A is a provision for deduction and not exemption. The relevant finding of the Hon ble Supreme Court is reproduced as under: 13. The retention of Section 10A in Chapter III of the Act after the amendment made by the Finance Act, 2000 would be merely suggestive and not determinative of what is provided by the Section as amended, in contrast to what was provided by the un-amended Section. The true and correct purport and effect of the amended Section will have to be construed from the language used and not merely from the fact that it has been retained in Chapter III. The introduction of the word deduction in Section 10A by the amendment, in the absence of any contrary material, and in view of the scope of the deductions contemplated by Section 10A as already discussed, it has to be unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lative mandate to understand that the stages for working out the deductions under Section 10A and 80HHC and 80FIHE are substantially different. This is the next aspect of the case which we would now like to turn to. 16. From a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee. This is also more than clear from the contemporaneous Circular No. 794 dated 9.8.2000 which states in paragraph 15.6 that, The export turnover and the total turnover for the purposes of sections 10A and 10B shall be of the undertaking located in specified zones or 100% Export Oriented Undertakings, as the case may be, and this shall not have any material relationship with the other business of the assessee outside these zones or units for the purposes of this provision. 17. If the specific provisions of the Act provide [first proviso to Sections ..... X X X X Extracts X X X X X X X X Extracts X X X X
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