THE TAPESTRY OF LIFE
A mouse looked through the crack in the wall to see the farmer and his wife open a package.
"What food might this contain?" The mouse wondered.
He was devastated to discover it was a mousetrap.
Retreating to the farmyard,
the mouse proclaimed this warning :
"There is a mousetrap in the house!
There is a mousetrap in the house!"
The chicken clucked and scratched,
raised her head and said, "Mr. Mouse, I can tell this is a grave concern to you,
but it is of no consequence to me. I cannot be bothered by it."
The mouse turned to the pig and told him,
"There is a mousetrap in the house!
There is a mousetrap in the house!"
The pig sympathized, but said, "I am so very sorry, Mr.. Mouse,
but there is nothing I can do about it but pray. Be assured you are in my prayers."
The mouse turned to the cow and said,
"There is a mousetrap in the house!
There is a mousetrap in the house!"
The cow said, "Wow, Mr. Mouse. I'm sorry for you, but it's no skin off my nose."
So, the mouse returned to the house, head down and dejected, to face the farmer's mousetrap alone.
That very night a sound was heard throughout the house
-- the sound of a mousetrap catching its prey.
The farmer's wife rushed to see what was caught.
In the darkness, she did not see it.
It was a venomous snake
whose tail was caught in the trap.
The snake bit the farmer's wife.
The farmer rushed her to the hospital.
When she returned home she still had a fever.
Everyone knows you treat a fever
with fresh chicken soup..
So the farmer took his hatchet to the farmyard
for the soup's main ingredient.
But his wife's sickness continued.
Friends and neighbors
came to sit with her
around the clock.
To feed them,
the farmer butchered the pig.
But, alas,
the farmer's wife did not get well...
She died.
So many people came for her funeral
that the farmer had the cow slaughtered
to provide enough meat for all of them
for the funeral luncheon.
And the mouse looked upon it all
from his crack in the wall
with great sadness.
So, the next time you hear
someone is facing a problem
and you think it doesn't concern you,
remember ---
When one of us is threatened, we are all at risk.
We are all involved in this journey called life.
We must keep an eye out for one another
and make an extra effort
to encourage one another.
YOU MAY WANT TO SEND THIS
TO EVERYONE WHO HAS EVER
HELPED YOU OUT...
AND LET THEM KNOW
HOW IMPORTANT THEY ARE.
- REMEMBER -
EACH OF US IS A VITAL THREAD
IN ANOTHER PERSON'S TAPESTRY.
OUR LIVES ARE WOVEN TOGETHER
FOR A REASON.
One of the best things to hold onto
In this world is a FRIEND.
A mouse looked through the crack in the wall to see the farmer and his wife open a package.
"What food might this contain?" The mouse wondered.
He was devastated to discover it was a mousetrap.
Retreating to the farmyard,
the mouse proclaimed this warning :
"There is a mousetrap in the house!
There is a mousetrap in the house!"
The chicken clucked and scratched,
raised her head and said, "Mr. Mouse, I can tell this is a grave concern to you,
but it is of no consequence to me. I cannot be bothered by it."
The mouse turned to the pig and told him,
"There is a mousetrap in the house!
There is a mousetrap in the house!"
The pig sympathized, but said, "I am so very sorry, Mr.. Mouse,
but there is nothing I can do about it but pray. Be assured you are in my prayers."
The mouse turned to the cow and said,
"There is a mousetrap in the house!
There is a mousetrap in the house!"
The cow said, "Wow, Mr. Mouse. I'm sorry for you, but it's no skin off my nose."
So, the mouse returned to the house, head down and dejected, to face the farmer's mousetrap alone.
That very night a sound was heard throughout the house
-- the sound of a mousetrap catching its prey.
The farmer's wife rushed to see what was caught.
In the darkness, she did not see it.
It was a venomous snake
whose tail was caught in the trap.
The snake bit the farmer's wife.
The farmer rushed her to the hospital.
When she returned home she still had a fever.
Everyone knows you treat a fever
with fresh chicken soup..
So the farmer took his hatchet to the farmyard
for the soup's main ingredient.
But his wife's sickness continued.
Friends and neighbors
came to sit with her
around the clock.
To feed them,
the farmer butchered the pig.
But, alas,
the farmer's wife did not get well...
She died.
So many people came for her funeral
that the farmer had the cow slaughtered
to provide enough meat for all of them
for the funeral luncheon.
And the mouse looked upon it all
from his crack in the wall
with great sadness.
So, the next time you hear
someone is facing a problem
and you think it doesn't concern you,
remember ---
When one of us is threatened, we are all at risk.
We are all involved in this journey called life.
We must keep an eye out for one another
and make an extra effort
to encourage one another.
YOU MAY WANT TO SEND THIS
TO EVERYONE WHO HAS EVER
HELPED YOU OUT...
AND LET THEM KNOW
HOW IMPORTANT THEY ARE.
- REMEMBER -
EACH OF US IS A VITAL THREAD
IN ANOTHER PERSON'S TAPESTRY.
OUR LIVES ARE WOVEN TOGETHER
FOR A REASON.
One of the best things to hold onto
In this world is a FRIEND.
CBDT has come out with a circular realted to set off and carry forward of losses of 10A/10AA/10B/10BA. What purpose will this circular serve at this stage. almost most of high courts have decided the issue against the recevue. Further as far my knowledge is concerned , department did not prefer appeal to the Apex court in case of CIT vs. Black & Veatch Consulting 348 ITR 72 (Bom).
The problem lies in the appointment of advocates at the high court level. There are least interested . their fees is fixed per case. There are many advocates on the panel who are engaged in other kind of work also.
CBDT needs to look into this aspect seriously and should have a dedicated force to argue there cases at the ITAT, HIGH court or apex level. A case lost in one ITAT on a certain points generally leads to follow of that judgement by other ITATs also. Similar is the case at high court level also. One nedds to be highly professional and updated on latest developments on acse law in case department wants to defend its cases at apellate forum.
None of case cited hare the department consel argued the other acses where High court s ahd held that loss from 10A/10B units can be set off aginst the normal business income.
had those judgements have been brought to the notice of Judges , a huge amount of revenue loss would not have taken place.
Contrast with the view taken in Scientific Atlanta vs. ACIT 129 TTJ 273 (Che)(SB),CIT vs. Yokogawa India Ltd 341 ITR 385 (Kar), CIT vs. Black & Veatch Consulting 348 ITR 72 (Bom), CIT vs. TEI Technologies 78 DTR 225 (Del) and other judgements
Circular No. 07/DV/2013, Dated : July 16, 2013
Sub: Circular on Sections 10A, 10AA, 10B and 10BA.
It has been brought to the notice of the Board that the provisions of 10A/10AA/10B/10BA of the Income-tax Act, with regard to applicability of Chapter IV of the Act and set off and carry forward of losses, are being interpreted differently by the Officers of the Department as well as by different High Courts.
2. The two sections 10A and 10B of the Act were initially placed on statute in 1981 and 1988 respectively, and continued with some modifications and amendments till 31.03.2001. Section 10A as inserted by Finance Act, 1981 read as under:
"Section 10A. Special provision in respect of newly established industrial undertakings in the free trade zones.- (1) Subject to the provisions of this section, any profits and gains derived by an assessee from an industrial undertaking to which this section applies shall not be included in the total income of the assessee."
2.1. Similarly section 10B as inserted by Finance Act, 1988 read as under:
"10B: Special provision in respect of newly established hundred percent export oriented undertakings.- Subject to the provisions of this section, any profits and gains derived by an assessee from a hundred per cent export oriented undertaking (hereafter in this section referred to as the undertaking) to which this section applies shall not be included in the total income of the assessee."
3. Vide Finance Act, 2000 section 10A and 10B of the Act were substituted. Section 10A as substituted by Finance Act, 2000 reads as under:-
"Section 10A.(1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee."
3.1 Similarly, section 10B as substituted by Finance Act, 2000 reads as under:-
"10B. (1) Subject to the provisions of this section, a deduction of such profits and gains as are derived by a hundred per cent export-oriented undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles or things or computer software, as the case may be, shall be allowed from the total income of the assessee…."
3.2 The effect of the substitution of section 10Aand 10B of the Act has been elaborated in CircularNo. 794 dated 9.8.2000 which clearly provides that the new provisions provide for deduction in respect of profits and gains derived by an undertaking from export of articles or things or computersoftware.
4. Sub-sections (6) of sections 10A and 10B were amended by Finance Act, 2003 with retrospective effect from 1. 4. 2001. Circular no.7/2003 dated 5.9.2003 explains the amendments brought by Finance Act, 2003. The relevant paragraph is reproduced below:
"20. Providing for carry forward of business losses and unabsorbed depreciation to units in Special Economic Zones and 100% Export Oriented Units20.1 Under the existing provisions of sections 10A and 10B, the undertakings operating in a Special Economic Zone (under section 10A) and 200% Export Oriented Units (EOU's) (under section 10B) are not permitted to carry forward their business losses and unabsorbed depreciation.20.2 With a view to rationalize the existing tax incentives in respect of such units, sub-section (6) in sections 10A and 10B has been amended to do away with the restrictions on the carry forward of business losses and unabsorbed depreciation.20.3 The amendments have been brought into effect retrospectively from 1-4-2001 and have been made applicable to business losses or unabsorbed depreciation arising in the assessment year 2001-02 and subsequent years."
5. From the above it is evident that irrespective of their continued placement in Chapter III, section 10A and 10B as substituted by Finance Act, 2000 provide for deduction of the profits and gains derived from the export of articles or things or computer software for a period of 10 consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such article or thing or computer software. The deduction is to be allowed from the total income of the assessee. The term 'total income' has been defined in section 2 (45) of the IT Act and it means the total amount of income referred to in section 5, computed in the manner laid down in the Income-tax Act.
5.1 All income for the purposes of computation of total income is to be classified under the following heads of income and computed in accordance with the provisions of Chapter IV of the Act-
• Salaries• Income from house property• Profits and gains of business and profession• Capital gains• Income from other sources
5.2 The income computed under various heads of income in accordance with the provisions of Chapter IV of the IT Act shall be aggregated in accordance with the provisions of Chapter VI of the IT Act, 1961. This means that first the income/loss from various sources i.e. eligible and ineligible units, under the same head are aggregated in accordance with the provisions of section 70 of the Act. Thereafter, the income from one ahead is aggregated with the income or loss of the other head in accordance with the provisions of section 71 of the Act. If after giving effect to the provisions of section 70 and 71 of the Act there is any income (where there is no brought forward loss to be set off in accordance with the provisions of section 72 of the Act) and the same is eligible for deduction in accordance with the provisions of Chapter VI-A or section 10A, 10B etc. of the Act, the same shall be allowed in computing the total income of the assessee.
5.3 If after aggregation of income in accordance with the provisions of section 70 and 71 of the Act, the resultant amount is a loss (pertaining to AY 2001-02 and any subsequent year) from eligible unit it shall be eligible for carry forward and set off in accordance with the provisions of section 72 of the Act. Similarly, if there is a loss from an ineligible unit, it shall be carried forward and may be set off against the profits of eligible unit or ineligible unit as the case may be, in accordance with the provisions of section 72 of the Act.
6. The provisions of Chapter IV and Chapter VI shall also apply in computing the income for the purpose of deduction under section 10AA and 10BA of the Act subject to the conditions specified in the said sections.
F. No. 279/Misc./M-116/2012-ITJ
(Hemant Gupta)
Under Secretary to the Govt. of India
Under Secretary to the Govt. of India
Regards,
Pawan Singla
BA (Hon's), LLB
Audit Officer
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