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TMI Blog2021 (8) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... . 10AA of the Act in the immediately preceding year, i.e., F.Y. 2008-09. It is, therefore, clear that in computing the deduction u/s. 10AA for the current year, the write back of the expenses have to be considered as a part of income, inasmuch as, the income on account of write back of unclaimed expenses is accrued to the assessee only due to the export business and there is direct nexus of export business of assessee and the accrual of income, in respect of which, the expenses were shown in the preceding year and such unclaimed expenses were written back for this year. It is not the case of the Revenue that the expenses had no relation to export business of the assessee in the earlier year. We, therefore, conclude that the authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved by the order dated 26/11/2015 passed by the Commissioner of Income Tax (Appeals)-2, Gurgaon ( Ld. CIT(A) ) for the assessment year 2010-11, M/s. TCS e-Serve International Ltd., ( the assessee ) preferred this appeal. 2. Brief facts of the case, relevant for the disposal of this appeal, are that the assessee filed their return of income for the assessment year 2010-11 on 20.04.2010 claiming a loss of ₹ 67,39,731/- by showing a sum of ₹ 43,50,946/- as other income on account of unclaimed balances written back and treating the same as exempt u/s. 10AA of the Income-tax Act, 1961 ( the Act ). According to the assessee, this amount was claimed as expenses in the preceding year for the purpose of calculation of deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... score and confirmed the action of the Assessing Officer. 4. Apart from this, learned CIT(A) observed that the learned Assessing Officer committed three mistakes in computation of total income, namely, (i) learned Assessing Officer wrongly took the returned loss at ₹ 67,39,731/-; (ii) the computation of deduction claimed by assessee u/s. 10AA was not correct, inasmuch as the brought forward loss of eligible business for preceding years was required to be reduced from the profits of business from current year before allowing deduction u/d. 10AA which was not done by ld. Assessing Officer; and (iii) the claim of assessee for set off of unabsorbed depreciation against other income of ₹ 35,25,367/- was not in accordance with the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act since these were claimed as expenses in the preceding year for the purpose of calculation of deduction u/s. 10AA of the Act. Learned AR submitted that the quantum of deduction u/s. 10AA was reduced to the extent of expenditure to the tune of ₹ 43,50,946/- in the year when such expenses were debited in the profit and loss account. He, therefore, submits that while giving the same treatment, the write back of such expenses should be treated as income eligible for deduction u/s. 10AA of the Act. He also submitted that the assessee has brought forward business losses and unabsorbed depreciation amounting to ₹ 11,73,61,104/- and ₹ 5,90,17,382/- respectively pertaining to F.Y. 2008-09 and during the F.Y. 2009-10, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e faulted with. She prayed to dismiss the appeal. 10. We have gone through the records in the light of submissions made on either side. The assessee claimed certain expenses in the year relevant to assessment year 2009-10 for the purpose of calculation of deduction u/s. 10AA of the Act and the quantum of deduction u/s. 10AA was reduced to the extent of expenditure to the tune of ₹ 43,50,946/- in the year when such expenses were debited in the profit and loss account. Learned Assessing Officer reduced the deduction u/s. 10AA of the Act by such amount of ₹ 43,50,946/- on the ground that the assessee had not claimed any deduction u/s. 10AA of the Act in the immediately preceding year and the write back of such expenses does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done by ld. CIT(A), is concerned, the law is settled and it is no longer res integra. In Yokogawa India Ltd. (supra), Hon ble Supreme Court observed that 17. If the specific provisions of the Act provide [first proviso to Sections 10A(1); 10A (1A) and 10A (4)] that the unit that is contemplated for grant of benefit of deduction is the eligible undertaking and that is also how the contemporaneous Circular of the department (No.794 dated 09.08.2000)understood the situation, it is only logical and natural that the stage of deduction of the profits and gains of the business of an eligible undertaking has to be made independently and, therefore, immediately after the stage of determination of its profits and gains. At that stage the aggr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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