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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: SHRI GEORGE MATHAN & SHRI S. JAYARAMAN
आदेश/ O R D E R
PER S. JAYARAMAN, ACCOUNTANT MEMBER :
The Revenue filed this appeal against the order of Commissioner of Income Tax (Appeals)-9, Chennai in dated 29.09.2017 for assessment year 2003-04.
The question in this appeal is at what stage the exemption claimed u/s. 10B should be computed? i.e. whether at the stage prior to arriving at the gross total income i.e., before allowing set off for carry forward of losses or the carry forward losses must be set off against the gross total income & then exemption u/s. 10B should be allowed. Following the Hon’ble Karnataka High Court decision in the case of CIT vs Himatasingike Seide Ltd., 286 ITR 255, the AO adjusted the unabsorbed depreciation from the profits earned by the 100% export oriented undertaking and then computed the deduction u/s. 10B. Aggrieved, the assessee filed an appeal before the Ld. CIT(A) and the Ld. CIT(A) following the latest judgement of the Supreme Court in the case of Yohogawa India Ltd, (2017) 77 Taxmann.com 41 (SC), allowed the assessee’s appeal.
Aggrieved, the Revenue filed this appeal with the following grounds of appeal:
“1. The order of the learned CIT(A) is contrary to law, facts and circumstances of the case 2. The learned CIT(A) has erred in allowing the claim u/s.10B of Rs.2.54 crores in its entirety 2.1 The learned CIT(A) failed to appreciate that the amount of claim ufs.1OB was arrived at by the assessee without setting off the unabsorbed depreciation loss of earlier year. 2.2 The learned CIT(A) erred in not placing reliance on the decision of the Apex Court in the case of Himatsingike Seida Ltd vs. CIT dated 14.10.2013 which is squarely applicable to the facts of the instant case.
2.3 The learned CIT(A ) failed to appreciate that the Apex Court in the case of CIT v Yokogawa (2017) 77 taxmann.com 41 (SC) has not over- ruled its earlier decision on the issue in the case of Himatasingike Seide Ltd v CIT (2014) 48 taxmann.com 357 (SC).
3. The learned CIT(A) failed to appreciate that unabsorbed depreciation loss of earlier years is to be treated as current depreciation as per Sec.32(2) and the profits eligible for deduction u/s.108 are to be computed after deduction of such depreciation losses. 3.1 The learned CIT(A) failed to appreciate that the Apex Court even in the case of CIT v Yokogawa cited supra had held that profits eligible for deduction under Sec.10B would have to be computed after allowing deductions falling under Chapter IV of the Act and since the provisions Sec.32(2) relating to unabsorbed depreciation loss falls under Chapter IV, the eligible profits for deduction u/s.10B would also therefore, required to be computed after setting off the unabsorbed depreciation loss of earlier years of the eligible unit.
4. For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT(A) may be set aside and that of the A.O. restored.”
The Ld. DR presented the case on the lines of the grounds of the appeal, supra.
The Ld. AR relied on this ITAT decision in the assessee’s own case in 828, 829 & 830/Chny/2017 for assessment years 2005- 06, 2007-08, 2008-09 dated 13.02.2018, wherein applying the ratio of the Apex Court in the case of CIT vs Yokogawa, supra, this tribunal allowed the assessee’s appeal.
We heard the rival submissions. Since, it is a recurrent issue and the issue has been allowed in the assessee’s own case, relying on the judgement of the Hon’ble Apex Court in the case of CIT vs Yokagawa India Ltd(2007) 391 ITR 247, vide the order under reference, supra, the Revenue’s appeal is dismissed.
5. In the result, the Revenue’s appeal is dismissed.
Order pronounced in the open court on 25th October, 2018 at Chennai.