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TMI Blog2022 (11) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... ) by ACIT, Circle-1(1), Panaji, Goa dated 16.12.2016. 2. Shri P. R. V. Raghavan, CA appeared on behalf of the assessee and Shri Mayur Kamble, Sr. DR appeared on behalf of the revenue. 3. The following grounds of appeal taken by the revenue read as under: "1. The order of the Ld. CIT(A) is opposed to law and facts of the case. 2. The Ld. CIT(A) erred in giving relief to the assessee by allowing Rs.2,8O,99,159/- as exemption u/s 10B and allow to carry forward the unabsorbed depreciation of Rs.2,00,58,145/- as claimed in the return by the assessee. 3. The CIT(A) failed to appreciate the facts stated by the AO in the assessment order that under I.T. Act, 1961 any deduction is allowable on net income arrived at after adjusting losses. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit B of Rs.66,87,840/- and also carried forward unabsorbed depreciation of Rs.2,02,72,405/-. Assessee set off the entire business loss and unabsorbed depreciation against the income of unit B. After setting off, it carried forward the balance unabsorbed depreciation of Rs.2,00,58,145/-. However, Ld. AO in the assessment, set off the entire business loss and depreciation of Rs.2,69,41,013/- and for the balance income of Rs.80,41,013/- allowed the exemption u/s. 10B of the Act. For this treatment by the Ld. AO, assessee submitted that the carried forward loss and depreciation were relating to unit B and hence, had to be set off against the income of unit B and not unit A. It was also pointed out that deduction u/s. 10B of the Act has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. Thus, assessee submitted that in the present circumstances, deduction u/s. 10B of the Act has to be given at the stage when the profits and gains of business are computed in the first instance and, therefore, the re-deduction in the claim of exemption u/s. 10B from Rs.2,80,99,159/- to Rs.80,41,013/- done by the AO is not in accordance with the provisions of the Act. Ld. AO in the assessment computed the deduction u/s. 10B by first setting off the carried forward business loss/depreciation and completed the assessment at Nil income. While doing so, he noted that section 10B though forms part of Chapter III of the Act but is a deduction section and is, therefore, governed by the provisions of section 80A r.w.s. 80AB of the Act. He thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Per contra, Ld. Counsel for the assessee reiterated the submissions made before the authorities below. However, he brought to the notice of the bench, the decision of Hon'ble Supreme Court in the case of CIT Vs. Yokogawa India Ltd. (2017) 391 ITR 274 (SC) wherein the issue has been dealt with by the Hon'ble Supreme Court in respect of section 10A which according to the Ld. Counsel is equally applicable to cases governed by the provisions of section 10B in view of the said later provision being pari materia with section 10A of the Act though governing a different situation. The findings given by the Hon'ble Court while disposing the matter is reproduced as under: "16. From a reading of the relevant provisions of Section 10A it is more than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Sections 70, 72 and 74 of the Act would be premature for application. The deductions under Section 10A therefore would be prior to the commencement of the exercise to be undertaken under Chapter VI of the Act for arriving at the total income of the assessee from the gross total income. The somewhat discordant use of the expression "total income of the assessee" in Section 10A has already been dealt with earlier and in the overall scenario unfolded by the provisions of Section 10A the aforesaid discord can be reconciled by understanding the expression "total income of the assessee" in Section 10A as 'total income of the undertaking'. 18. For the aforesaid reasons we answer the appeals and the questions arising therein, as formulated a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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