1. M/s Hematsingka versus CIT, SLP No. 10359-10360 of 2011, Date of Order : 19.09.2013, Supreme Court of India.
S.
10A/10B: Unabsorbed depreciation (and business loss) of same (s.
10A/10B) unit brought forward from earlier years have to be set off
against the profits before computing exempt profits & not against
income from other sources.
The
assessee set up a 100% EOU in AY 1988-89. For want of profits it did not
claim benefits u/s 10B in AYs 1988-89 to 1990-91. From AY 1992-93 it
claimed the said benefits for a connective period of 5 years. In AY
1994-95, the assessee computed the profits of the EOU without adjusting
the brought forward unabsorbed depreciation of AY 1988-89. It claimed
that as s. 10B conferred “exemption” for the profits of the EOU, the
said brought forward depreciation could not be set-off from the profits
of the EOU but was available to be set-off against income from other
sources. It was also claimed that the profits had to be computed on a
“commercial” basis. The AO accepted the claim though the CIT revised his
order u/s 263 and directed that the exemption be computed after
set-off. On appeal by the assessee, the Tribunal reversed the CIT. On
appeal by the department, the High Court (CIT vs. Himatasingike Seide
Ltd 286 ITR 255 (Kar)) reversed the Tribunal and held that the brought
forward depreciation had to be adjusted against the profits of the EOU
before computing the exemption allowable u/s 10B. On appeal by the
assessee to the Supreme Court HELD dismissing the appeal:
“Having
perused the records and in view of the facts and circumstances of the
case, we are of the opinion that the Civil Appeal being devoid of any
merit deserves to be dismissed and is dismissed accordingly.”
2. M/s.Pratibha JV, versus The DCIT -22(2), ITA No. 3923/Mum/2012, Date of Order : 25.09.2013, ITAT - Mumbai
Disallowance
in view of S. 40(a)(ia) cannot be made if the deposits of TDS to the
credit of Government are made before the due date of filing the return
as described in section 139(1).
The
provisions of section 40(a)(ia) as stood prior to the amendments made by
the Finance Act 2010 thus were resulting into unintended consequences
and causing grave and genuine hardships to the assessees who had
substantially complied with the relevant TDS provisions by deducting the
tax at source and by paying the same to the credit of the Government
before the due date of filing of their returns u/s 139(1). In order to
remedy this position and to remove the hardships which was being caused
to the assessees belonging to such category, amendments have been made
in the provisions of section 40(a)(ia) by the Finance Act 2010. The said
amendments, in our opinion, thus are clearly remedial/curative in
nature.
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