Asstt. CIT v. The Alleppey Co. Ltd.

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The Tax Publishers2017 TaxPub(DT) 1475 (Coch-Trib) Asstt. CIT v. The Alleppey Co. Ltd. INCOME TAX ACT, 1961 --Deduction under section 10B--ComputationSetting off of brought forward loss from taxable units against income from EOU----Income of the 10B unit had to be excluded at the source itself before arriving at the gross total income and since this income was not at all to be in the income of the assessee, there was no occasion to set off of brought forward loss of the assessee in respect of its other business against the profits of the exempted units. --Assessee was engaged in the business of manufacturing and export of coir products. Return was filed declaring loss. Assessee claimed deduction under section 10B. The assessment under section 143(3) was completed wherein the loss returned was reduced. AO while completing the assessment under section 143 had allowed deduction under section 10B. Subsequently, notice under section 148 was issued, for the reason that allowance under section 10B was incorrect resulting in excess carry forward business loss. Assessee submitted that deduction under section 10B was allowed after due consideration in the original assessment order and therefore, issuance of notice under section 148 was bad in law. *Held:* In view of Yokogawa India Ltd. (2012) 341 ITR 385 (Karn) exemption under section 10B is to be calculated prior to the setting off brought forward losses and unabsorbed depreciation. The profits of the eligible unit, was to be calculated on stand-alone basis. Section 10B being an exemption provision, income of the 10B unit had to be excluded at the source itself before arriving at the gross total income and since this income was not at all to be in the income of the assessee, there was no occasion to set off of brought forward loss of the assessee in respect of its other business against the profits of the exempted units. Income Tax Act, 1961 Section 10B *Followed:*CIT v. Yokogava India Ltd. (2012) 341 ITR 385 (Karn). *REFERRED :* FAVOUR : In assessee's favour. A.Y. : 2009-10 IN THE ITAT, COCHIN BENCH ABRAHAM P GEORGE, A.M. & GEORGE GEORGE K, J.M. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2017 TaxPub(DT) 1475 (Coch-Trib)

Asstt. CIT v. The Alleppey Co. Ltd.

INCOME TAX ACT, 1961

--Deduction under section 10B--ComputationSetting off of brought forward loss from taxable units against income from EOU----Income of the 10B unit had to be excluded at the source itself before arriving at the gross total income and since this income was not at all to be in the income of the assessee, there was no occasion to set off of brought forward loss of the assessee in respect of its other business against the profits of the exempted units. --Assessee was engaged in the business of manufacturing and export of coir products. Return was filed declaring loss. Assessee claimed deduction under section 10B. The assessment under section 143(3) was completed wherein the loss returned was reduced. AO while completing the assessment under section 143 had allowed deduction under section 10B. Subsequently, notice under section 148 was issued, for the reason that allowance under section 10B was incorrect resulting in excess carry forward business loss. Assessee submitted that deduction under section 10B was allowed after due consideration in the original assessment order and therefore, issuance of notice under section 148 was bad in law. Held: In view of Yokogawa India Ltd. (2012) 341 ITR 385 (Karn) exemption under section 10B is to be calculated prior to the setting off brought forward losses and unabsorbed depreciation. The profits of the eligible unit, was to be calculated on stand-alone basis. Section 10B being an exemption provision, income of the 10B unit had to be excluded at the source itself before arriving at the gross total income and since this income was not at all to be in the income of the assessee, there was no occasion to set off of brought forward loss of the assessee in respect of its other business against the profits of the exempted units.

Income Tax Act, 1961 Section 10B

Followed:CIT v. Yokogava India Ltd. (2012) 341 ITR 385 (Karn).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

IN THE ITAT, COCHIN BENCH

ABRAHAM P GEORGE, A.M. & GEORGE GEORGE K, J.M.