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TMI Blog2020 (10) TMI 799X X X X Extracts X X X X X X X X Extracts X X X X ..... mon order dated 12.11.2018 passed by the Income Tax Appellate Tribunal ('the Tribunal' for brevity), Madras 'B' Bench, Chennai, made in Tax Case Appeal Nos. I.T.A.Nos. Assessment Years T.C.A.No.395 of 2019 I.T.A.No.384/Chny/2018 2003-04 T.C.A.No.396 of 2019 I.T.A.No.385/Chny/2018 2004-05 T.C.A.No.397 of 2019 I.T.A.No.387/Chny/2018 2006-07 T.C.A.No.398 of 2019 I.T.A.No.386/Chny/2018 2005-06 T.C.A.No.400 of 2019 I.T.A.No.383/Chny/2018 2002-03 2. The Revenue has raised the following Substantial Questions of Law for consideration: 1. Whether the Tribunal was justified in holding that deduction u/s 10B of the Income Tax Act should first be excluded from the profits of the year, before set off "brought forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nologies Private Limited., Vs. The Deputy Commissioner of Income Tax Company Circle - I (3) in T.C.A.No.228 of 2011 dated 18.03.2020, which was followed by this Court in the case of The Commissioner of Income Tax Vs. M/s.Comstar Automotive Technologies Pvt. Ltd., in T.C.A.No.301 of 2019 dated 06.07.2020. 5. The operative portion of the judgment in the case of M/s.Comstar Automative Technologies Private Limited., Vs. The Deputy Commissioner of Income Tax Company Circle - I (3) (cited supra) reads as follows: "25. Having considered the said questions, as has been brought before the Hon'ble Apex Court for consideration, their Lordships have decided the issue in favour of the Assessee. The relevant portion of the order of the Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be wholly different. The above implications cannot be more obvious than from the case of Civil Appeals Nos. 8563 and 8564 of 2013 and civil appeal arising out of SLP (C) No. 18157 of 2015, which have been filed by loss making eligible units and/or by non-eligible assessees seeking the benefit of adjustment of losses against profits made by eligible units. 15. Sub-section (4) of Section 10A which provides for pro rata exemption, necessarily involving deduction of the profits arising out of domestic sales, is one instance of deduction provided by the amendment. Profits of an eligible unit pertaining to domestic sales would have to enter into the computation under the head "profits and gains from business" in Chapter IV and denied the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clear to us that the deductions contemplated therein are 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 para 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 outsid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the outset of this order, by holding that though Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly." 26. In the aforesaid Judgment, the reason for such conclusion arrived at by the Hon'ble Apex Court has been explained at para 17 in unequivocal terms. The Apex Court has specifically held that, at the stage of the aggregate of the incomes under other heads, the provisions for set off and carry forward contained in Sections 70, 72 and 74 of the Act would be a premature for applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. This method of computing the income in the present case made by the Revenue is totally against the said law as has been declared by the Hon'ble Apex Court in the aforesaid decision in Commissioner of Income-tax v. Yokogawa India Ltd., (cited supra). 30. Therefore we have no hesitation to hold that, the decision of the ITAT, which is impugned herein, would not stand in the legal scrutiny, in view of the law having been declared by the Hon'ble Apex Court. Therefore, we are of the view that, the Substantial Question of Law raised in this Appeal is covered by the said decision, therefore it can be answered accordingly." 6. Thus, following the above decision, the Tax Case Appeals are dismissed and the Substantial Questions of Law a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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