Case Note & Summary
The case involves two appeals by the Revenue under Section 260A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Mumbai, dated 16th November 2012. The assessee, M/s. Shantivijay Jewels Ltd., is engaged in the business of manufacturing and export of gems and jewellery. For assessment year 2005-06, the assessee originally filed a return on 27th October 2005 declaring income of Rs.24,44,945/- after claiming deduction under Section 10A of the Act. Subsequently, on 20th February 2006, the assessee filed a revised return withdrawing the Section 10A deduction and instead claimed set off of unabsorbed business loss brought forward from assessment year 2002-03 against the profits of the erstwhile 10A unit. The Assessing Officer disallowed this claim by order dated 30th November 2007, holding that the unabsorbed loss of assessment year 2002-03 had already been set off against the business profit of the 10A unit in assessment years 2003-04 and 2004-05, leaving no loss for set off in the subject year. The Commissioner of Income Tax (Appeals) dismissed the assessee's appeal on 16th August 2010. However, the Tribunal allowed the assessee's appeal, permitting the set off. The Revenue challenged the Tribunal's order before the High Court. The High Court, after hearing both sides, found that the questions of law raised by the Revenue were not substantial and that the Tribunal's order was based on a correct interpretation of the law and facts. Consequently, the appeals were dismissed.
Headnote
A) Income Tax - Set Off of Loss - Section 10A, Section 72, Income Tax Act, 1961 - Set off of unabsorbed business loss brought forward from assessment year 2002-03 against profits of erstwhile 10A unit in assessment year 2005-06 - The assessee had claimed deduction under Section 10A in original return but later revised return to withdraw deduction and claim set off of brought forward loss - Assessing Officer disallowed set off on ground that loss had already been set off in earlier years - Commissioner (Appeals) dismissed appeal - Tribunal allowed set off - Revenue appealed under Section 260A - High Court held that no substantial question of law arises as Tribunal's order is based on correct interpretation of law and facts - Appeal dismissed (Paras 1-6).
Issue of Consideration
Whether the unabsorbed business loss of assessment year 2002-03 can be set off against the profits of the erstwhile 10A unit in assessment year 2005-06, being the first year after the tax holiday period.
Final Decision
Both appeals dismissed. No substantial question of law arises. Tribunal's order upheld.
Law Points
- Set off of unabsorbed business loss against profits of erstwhile 10A unit after tax holiday period
- Section 10A of Income Tax Act
- 1961
- Section 72 of Income Tax Act
- Section 260A of Income Tax Act
