Whether exemption u/s 10A is to be computed before setoff of brought forward losses and unabsorbed depreciation – YES: HC

Whether exemption u/s 10A is to be computed before setoff of brought forward losses and unabsorbed depreciation - YES: HC

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Whether exemption u/s 10A is to be computed before setoff of brought forward losses and unabsorbed depreciation – YES: HC

Pr.CIT Vs Kpit Cummins Infosystem Ltd

Whether exemption u/s 10A is to be computed before setoff of brought forward losses and unabsorbed depreciation – YES: HC

– Revenue’s appeal dismissed: BOMBAY HIGH COURT

Whether exemption u/s 10A is to be computed before setoff of brought forward losses and unabsorbed depreciation – YES: HC

++ the issue under present appeal is squarely covered by the Judgment of the Supreme Court in the case of Commissioner of Income tax Vs. Yokogawa India Ltd – 2016-TIOL-228-SC-IT in which it was observed that: “….The specific provisions of the Act provide for first proviso to Sections 10A(1); 10A (1A) and 10A (4) that the unit that is contemplated for grant of benefit of deduction is the eligible undertaking and that is also how the contemporaneous Circular of the Department understood the situation, it is only logical and natural that the stage of deduction of the profits and gains of the business of an eligible undertaking has to be made independently and, therefore, immediately after the stage of determination of its profits and gains. At that stage the aggregate of the incomes under other heads and the provisions for set off and carry forward contained 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….” In the result, the question is answered in favour of assessee.

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