FORD MOTOR PRIVATE LIMITED,CHENNAI vs. DCIT, CHENNAI

आदेश / O R D E R

PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER:

ITA No.1519/Mds/2016 :- 2 -: No.246/CIT(A)-6/2014-15 for the AY 2007-08 and raised the following grounds: 1.General The grounds of appeal listed below are without prejudice to each other:

1.1 That the order passed by the learned Commissioner of Income-tax (Appeals) [‘CIT(A)’j is contrary to law, facts and circumstances of the case.

2.1 The order of the learned CIT(A) is bad in law as the learned CIT(A) failed to appreciate that no income has escaped assessment by reason of failure of the Appellant to disclose fully and truly all material facts during the course of original assessment.

2.2 The order of learned CIT(A) is erroneous as the learned CIT(A) failed to appreciate that re-opening of assessment does not emanate from fresh or additional tangible material that had not been available at the time of original assessment.

2.3 The learned CIT(A) has erred in law and on facts by failing to appreciate that the re- opening of assessment is merely based on the change of opinion of learned Deputy Commissioner of Income-tax (‘AO’) and the same does not emanate from any additional information or material on record.

3.1 The learned CIT(A) has erred in facts and circumstances of the case by confirming the decision of AO in relation to setting off the losses of the new unit against the income of the FITSI divisions before allowing the benefit under section 10A of the Act.

3.2 The learned CIT(A) erred in law by confirming the AO’s reliance on the CBDT circular No.7 dated 16 July 2013 without appreciating that the same is not binding on the Appellant in view of the principle established by various judicial precedents.

4.1 The Appellant prays that directions be given to grant all such relief arising from the grounds of appeal mentioned supra as also all consequential relief thereto.

4.2 The Appellant craves leave to add, alter, amend and/or withdraw any of the above grounds of appeal and to submit such statements, documents and papers as may be considered necessary either at or before the hearing of this appeal as per law.

2.0 The assessee raised total four grounds in this appeal and Ground Nos.1 & 4 are general in nature which does not require specific adjudication.

ITA No.1519/Mds/2016 :- 3 -:

3.0 Ground No.2 is with regard to re-opening of assessment which was not argued by the assessee. Therefore, this ground is dismissed as not pressed.

4.0 Ground No.3 is related to the set off business losses against the income of the FITSI Division before allowing the benefit u/s.10A of the IT Act. The assessee has incurred a loss of Rs.64,38,865/- on account of expenses incurred in 10AA unit. The assessee has reduced the loss after claiming the deductions under section 10A and B. The assessee has claimed the set of losses of Rs.64,38,865/- from the total income instead of carrying forward of the losses holding the unit eligible for deduction u/s.10AA, as a separate independent unit. Therefore the AO completed the reassessment u/s 143(3) r.w.s 147 re-computing the total income and allowed the loss before the deduction u/s.10A & B 5.0 The assessee went on appeal before the CIT(A) and the Ld.CIT(A) confirmed the order of the AO and dismissed the appeal of the assessee.

6.0 Aggrieved by the Order of the Ld.CIT(A), the assessee is on appeal before us and argued that the stage of deduction u/s.10A subsequent to amendment to Finance Act 2000 w.e.f. 01.04.2001 would be while computing gross total income of eligible undertaking under Chapter-IV of Act and not at stage of computation of total income under Chapter-VI of IT Act. Assessee also relied on the decision of the Hon’ble Apex Court in ITA No.1519/Mds/2016 :- 4 -: the case of CIT v. Yokogowa Ltd., 77 taxmann 41 wherein the Hon’ble Apex Court held that the deduction would be while computing gross total income of eligible undertaking under Chapter-IV of Act and not at the stage of computation of total income. The provisions of Sec.10A, 10B & 10AA being pari-meteria we hold that the judgment of the Hon’ble Apex Court is squarely applicable in the assessee’s case and accordingly, we set-aside the order of the lower authorities and allow the appeal of the assessee.

7.0 In the result, the appeal of the assessee is allowed.

Order pronounced in the Open Court on June 08, 2017, at Chennai.