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TMI Blog2022 (9) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment Year 2004-05 [ 2015 (12) TMI 1742 - ITAT PUNE ] We cannot persuade ourselves to take a different view on an issue arising between the same parties, which has already been raised and rejected by this Court, although for a different assessment year, more so when there is no change in the factual or legal matrix of the case. Losses sustained by hundred per cent EOU set off against the other business income of the assessee - This issue, however, is no longer res integra. In Hindustan Lever Ltd. [ 2010 (4) TMI 206 - BOMBAY HIGH COURT ] as held that AO 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. Thus no substantial questions of law arise in the present appeal, which is, accordingly, dismissed. - INCOME TAX APPEAL NO. 679 OF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable here, when the same relates to provision for warranty and hence misplaced? (e) Whether on the facts and circumstances of the case and in law, the ITAT was justified in holding that the decision of the Hon ble Supreme Court in the case of Rotork Controls Ltd. (314 (ITR 62) is applicable in this case when scientific basis of the valuation cost of inventory is not conclusively established? (f) Whether on the facts and circumstances of the case and in law, the ITAT was justified in allowing the losses suffered by newly set up EOU against its other business income? 3. Briefly stated the material facts are as under: The assessee company is a part of the Sandvik Group being a subsidiary of Sandvik AB Sweden. The company Sandivik AB Sweden is stated to be a holding company of the assessee, besides a few others. The assessee company is engaged in the business of manufacturing of hard material specialized tools which are used in drilling besides tubes, pipes and wires. Return of income was fled by the assessee for the assessment year 2005-06. During the relevant assessment year, the assessee had made a provision for Finished Goods obsolescence for an amount of Rs. 19,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. It was held that if the management services were indeed rendered to the assessee, then the arm s length price of such payment could not have been Nil , as had been held by the TPO and that the TPO ought to have carried out an exercise to determine the arm s length price of the payment on account of management services accordingly proceeded to delete the addition of Rs.4,41,44,973 based on the transfer pricing adjustment made by T.P.O. 6. The Tribunal in the appeal fled by the Revenue, upheld the Order of the CIT(A). It was held that the TPO in its remand report had not doubted that the management services had not been rendered at all but had proceeded on the premises that the same were rendered by group entities of Sandvik AB not by Sandvik AB itself further that the services rendered by the Sandvik group entities were in accordance with the agreement. 7. Since reference has been made to the Management Service agreement entered between Sandvik AB the Respondent. We deem it appropriate to refer to some of the clauses relied upon by the Tribunal. (i) Providing parties (in the definition section) means all or some of the Sandvik Companies, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard. Further, even the Hon ble Supreme Court in Retork Controls India (P) Ltd Vs. CIT reported in 314 ITR 62(SC) had upheld the provision for warranty made by the said assessee in its books of account and its admissibility being on scientific basis. Following the same simili of reasoning, we uphold the order of CIT(A) in this regard and dismiss the grounds of appeal No.2 and 4 raised by the Revenue. 10. We have noticed that an appeal preferred by the Revenue, being ITA No.50/2017, against the Order of the Tribunal for the assessment year 2004-05 was dismissed on the ground that the assessee had been consistently following the method of evaluating the stock which had been accepted by the Revenue. 11. We cannot persuade ourselves to take a different view on an issue arising between the same parties, which has already been raised and rejected by this Court, although for a different assessment year, more so when there is no change in the factual or legal matrix of the case. 12. The other issue arises for consideration is whether the losses sustained by hundred per cent EOU could be set off against the other business income of the assessee. This issue, however, is no longe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is intrinsic material in Section 10B to indicate that such a prohibition was not within the contemplation of the Legislature. Sub-section (7) of Section 10B provides that the provisions of subsection (8) and sub-section (10) of Section 80-IA shall, so far as may be, apply in relation to the undertaking referred to in the Section as they apply for the purposes of an undertaking referred to in Section 80-IA. .A provision akin to sub-section (5) of Section 80-IA or for that matter akin to sub-section (6) of Section 80-I has not been introduced by the Legislature when it enacted Section 10B. The fact that unabsorbed depreciation can be carried forward to a subsequent year does not militate against the entitlement of the assessee to set off a loss which is sustained by an eligible unit against the income arising from other units under the same head of profits and gains of business or profession. The Legislature not having introduced a statutory prohibition, there is no reason to deprive the assessee of the normal entitlement which would flow out of the provisions of Section 70. 13. In view of the reasons indicated above, in our opinion no substantial questions of law arise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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