By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Chartered Accountants
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43 2009 TIOL 53 ITAT Bang.
DCIT v. M/s Medreich Ltd.
ITA No. 632/Bang./2008
A.Y. : 2004-2005. Dated : 21-11-2008
Whether in view of the provisions of S. 10B, as amended
w.e.f. 1-4-2001, the deduction u/s.10B is to be computed with reference to
profits of EOU unit after reducing the losses of non-EOU units — Held, No.
Facts :
The assessee company, a 100% EOU, was engaged in the business
of manufacture of pharmaceutical products. The assessee company claimed
exemption u/s.10B of the Act in respect of export profits in the EOU Unit and
also the domestic profits thereon. The assessee had not claimed set-off of
business losses incurred in other units but carried them forward. The AO while
assessing the total income first set off the loss of non-EOU unit against the
entire profit of the EOU unit (domestic as well as export) and then allowed
deduction u/s.10B on the residue. As a result, the carried forward benefit
claimed by the assessee was not allowed. Aggrieved, the assessee preferred an
appeal to the CIT(A) who allowed the claim of the assessee by relying on the
decision of the Bangalore Tribunal in the case of M/s. Webspectrum Software Pvt.
Ltd. in which the Tribunal held that the deduction u/s.10A is to be allowed
without setting off brought forward and current year loss of non-10A unit.
Aggrieved, the Revenue preferred an appeal to the Tribunal.
Held :
The Tribunal did not find any infirmity in the order of the
CIT(A). It dismissed the appeal of the Revenue.
