M/s.Akay Flavours & Aromatics P. Ltd, Ernakulam V. The ACIT, Cochin

ITA 203/COCH/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7628 (ITAT-COCHIN)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-11-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 26-04-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHAMTOM BOSE
• Assessee Lawyers: K M JOSE
• Keywords: Business income; Depreciation; Business expenditure; Opportunity of being heard; Difference of opinion; Unabsorbed depreciation; Change of opinion
• Section: 143(3); 10B; 263; 28; 10; 154

Judgement Text

ITA NO . 203/C/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH KOCHI BEFORE S/SHRI B P JAIN, AM & GEORGE GEORGE K, JM ITA NO 203/COCH/2016 (ASST YEAR 2011 - 12 ) A KAY F LAVORS & A ROMATICS P L TD A MB UNAD M ALAIDAMTHURUTHU PO E RNAKULAM 683 561 VS THE PRINCIPAL COMMISSI ONER OF INCOME TAX KOCHI ( APPELLANT) (RESPONDENT) PAN NO. AACCA6827A ASSESSEE BY SH K M JOSE REVENUE BY SH SHAMTOM BOSE, CIT - DR DATE OF HEARING 8 TH NOV 2016 DATE OF PRONOUNCEMENT 9 TH NOV 2016 ORDER PER GEORGE GEORGE K,JM: THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DIRECTED AGAINST THE CITS ORDER PASSED U/S 263 OF THE I T ACT (ORDER DATED 24.3.2016). THE RELEVANT ASSESSMENT YEAR IS 2011 - 12. 2 THE GROUNDS RAISED READ AS FOLLOWS: 1. SERIAL NO. I, OF THE NOTICE UNDER SECTION 263 SAY S THAT 'ALLOW ING DEPRECIATION UNDER SECTION 10 B HAS RESULTED IN EXCESS DISALLOWANCE OF DEDUCTION AND WRONG CARRY FORWARD OF LOSS OF RS. 17,82,793/ - . THE DEDUCTION UNDER SECTION 10 B HAS TO BE ALLOWED FROM THE TOTAL INCOME AND NOT FROM THE BUSINESS INCOME AS CLAIMED BY THE ASSESSEE'. IT IS RESPECTFULLY SUBMITTED THAT THIS IS ONLY A CHANGE OF OPINION AND ALL THE DETAILS/DOCUMENTS HAD BEEN SUBMITTED AT THE TIME OF ASSESSMENT AND THEREFORE DOES NOT BECOME ELIGIBLE FOR PROCEEDINGS UNDER SECTION 263 OF THE INCOME TAX ACT, 1961. ITA NO . 203/C/2016 2 2. SERIAL NO. II, OF THE NOTICE UNDER SECTION 263 SAYS THAT 'AMOUNT OF DEDUCTION TO BE ALLOWED UNDER SECTION 10 B WAS NOT VERIFIED BY THE ASSESSING OFFICER'. IT IS RESPECTFULLY SUBMITTED THAT ALL THE RELATED DETAILS/DOCUMENTS HAD BEEN SUBMIT TED AT THE TIME OF ASSESSMENT AND THE OFFICER HAD VERIFIED ALL THE RELEVANT DOCUMENTS FOR QUANTIFYI NG THE DEDUCTION UNDER SECTION 10B . THIS IS ONLY A CHANGE OF OPINION AND THEREFORE DOES NOT BECOME ELIGIBLE FOR PROCEEDINGS UNDER SECTION 263 OF THE INCOME T AX ACT, 1961. 3. SERIAL NO. IV, OF THE NOTICE UNDER SECTION 263 SAYS THAT 'RECONCILIATION OF INCOME AS PER TDS CERTIFICATES AND INCOME CREDITED IN THE BOOKS NOT DONE BY THE ASSESSING OFFICER'. IT IS RESPECTFULLY SUBMITTED THAT THE RECONCILIATION STATEMENT BETWEEN TDS CERTIFICATES AND BOOKS OF ACCOUNT HAD BEEN SUBMITTED TO THE ASSESSING OFFICER AND WAS VERIFIED BY HIM AND THERE IS NO INCOME WHICH HAS ESCAPED ASSESSMENT. THIS IS ALSO A CHANGE OF OPINION AND THEREFORE DOES NOT BECOME ELIGIBLE FOR PROCEEDINGS UNDER SECTION 263 OF THE INCOME TAX ACT, 1961. 4. EXCESS DEDUCTION IN SERIAL NO. III IS ONLY A MISTAKE APPARENT ON THE RECORD AS ALL THE DOCUMENTS WERE PRODUCED AND SUBMITTED BEFORE THE ASSESSING OFFICER AT THE TIME OF HEARING DURING THE ASSESSMENT PROCEED INGS AND IT IS THEREFORE ONLY A MISTAKE APPARENT ON RECORD TO BE RECTIFIED U/S, 154 AND NOT ELIGIBLE FOR RE - OPENING UNDER SECTION 263 OF THE INCOME TAX ACT, 1961. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF THE HEARING, IT IS PRAYED THAT THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOCHI - L MAY BE SET ASIDE AND APPROPRIATE RELIEFS GRANTED. 3 BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A COMPANY ENGAGED IN THE MANUFACTURE AND EXPORT OF SPICE FLAVOURS, CO LORS, SEASONINGS, SPICES OIL, SPICE EXTRACTS ETC. T HE ASSESSEE, FOR THE ASSESSMENT YEAR 2011 - 12 HAD FILED RETURN OF INCOME ON 27.9.2011 DECLARING NIL INCOME. THE ASSESSMENT U/S 143(3) WAS COMPLETED VIDE ORDER DATED 23.1.2014. 3.1 SUBSEQUENTLY, THE CIT, INVOKING HIS REVISIONARY POWERS, ISSUED NOTICE U/S 263 OF THE ACT, AS ACCORDING TO HIM, THE ORDER OF THE ASSESSMENT COMPLETED ON 23.1.2014 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE FOLLOWING REASON: 1. ALLOWIN G DEPRECIATION AFTER DEDUCTION U/S 10B HAS RESULTED IN EXCESS DISALLOWANCE OF DEDUCTION AND WRONG CARRY FORWARD OF LOSS OF RS.17,82,793 / - . THE DEDUCTION U/S 10B HAS TO BE ALLOWED FROM THE TOTAL INCOME AND NOT FROM THE BUSINESS INCOME AS CLAIMED BY THE ASSESSEE. ITA NO . 203/C/2016 3 II) . AMOUNT OF DEDUCTION TO BE ALLOWED U/S 10B WAS NOT VERIFIED BY THE ASSESSING OFFICER. III) . EXCESS DEDUCTION U/S 35(2AB) OF RS.5.69 LAKHS CLAIMED BY THE ASSESSEE. IV) RECONCILIATION OF INCOME AS PER TDS CERTIFICATES AND INCOME CREDITED IN THE BOOKS NOT DONE BY TH E ASSESSING OFFICER. 3.2 THE ASSESSEE FILED OBJECTIONS TO THE PROPOSED REVISION. THE CIT, HOWEVER, REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE AND PASSED ORDER U/S 263 OF THE I T ACT , SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 23.1.201 4 . THE CIT DIRECTED THE ASSESSING OFFICER TO RE - EX AMINE THE ISSUES MENTIONED IN PARA 3 OF THE IMPUGNED ORDER. THE RELEVANT FINDINGS OF THE CIT, READ AS FOLLOWS: 3. I HAVE CONSIDERED THE CONTENTIONS OF THE ASSESSEE. SECTION 10B SAYS THAT DEDUCTION U/S 10 B SHALL BE ALLOWED FROM THE TOTAL INCOME OF THE ASSESSEE. THIS TOTAL INCOME IS DEFINED IN SECTION 80A OF THE INCOME - TAX ACT, AND IT SPEAKS OF HOW GROSS TOTAL INCOME IS TO BE DETERMINED AND HOW TOTAL INCOME IS TO BE DETERMINED. HENCE THE ASSESSEE'S CONTENTI ON THAT THERE IS NO DEFINITION FOR TOTAL INCOME IS INCORRECT. FURTHER, WHAT CAN BE ALLOWED AS A BUSINESS EXPENDITURE IS CLEARLY MENTIONED IN SECTION 28 TO 43D. THERE IS NO MENTION OF DEDUCTION U/S 10AB IN ANY OF THESE SECTIONS. HENCE ASSESSEE'S CLAIM THAT THE DEDUCTION U/S 10B IS AT PAR WITH ANY EXPENDITURE IS NOT ACCEPTABLE. THE ASSESSEE HAS COMPUTED THE TOTAL INCOME AFTER DEDUCTING PROFIT FROM 10B FROM GROSS PROFIT RATHER THAN FROM TOTAL INCOME. THE TOTAL INCOME HAS TO BE TAKEN AS A FIGURE AS MENTIONED IN THE ACT. WHILE CLAIMING THE DEDUCTION U/S 10B AS AN EXPENDITURE THE ASSESSEE HAS REDUCED HIS GROSS PROFIT AND THEREBY WAS ABLE TO MAKE A HIGHER CLAIM WHICH IS NOT DUE TO IT. THE CORRECT PROCEDURE WILL BE TO COMPUTE TOTAL INCOME OF THE ASSESSEE AS PER INCO ME - TAX ACT AS IF THERE IS NO CLAIM U/S 10B AND THEN ARRIVE AT INCOME OF THE EXPORT UNIT AS IF THAT IS THE ONLY BUSINESS OF THE ASSESSEE AND THEN DEDUCT INCOME OF EXPORT UNIT FROM TOTAL INCOME OF THE ASSESSEE. IN VIEW OF THIS, THE ASSESSEE'S CLAIM WAS ACCEP TED BY THE ASSESSING OFFICER WITHOUT EXAMINING RELEVANT FACTS AND PROVISIONS OF THE INCOME - TAX ACT. HENCE THE ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 4. I, THEREFORE, SET ASIDE THE ORDER U/S 143(3) DATED 23 - 1 - 2014 ON THE ABOVE SAID LIMITED ISSUES. THE ASSESSING OFFICER IS DIRECTED TO RE - EXAMINE THE FACTS OF THE CASE ON THE LINE DISCUSSED ABOVE AND PASS AN ORDER AS PER THE PROVISIONS OF THE INCOM E - TAX ACT 1961, AFTER GIVING AM PLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO . 203/C/2016 4 4 THE ASSE SSEE BEING AGGRIEVED IS IN APPEAL BEFORE US. THE LD COUNSEL FOR THE ASSESSEE FILED WRITTEN ARGUMENTS, WHICH ARE REPRODUCED HERE FOR READY REFERENCE: WITH RESPECT TO THE APPEAL FILED BY THE APPELLANT AKAY FLAVOURS AND AROMATICS PRIVATE LIMITED WE WOULD LIKE TO SUBMIT THE FOLLOWING ARGUMENT NOTE, 1. SERIAL NO 1 TO THE GROUNDS OF APPEAL CORRESPONDING TO SERIAL NUMBER 1 OF THE ORDER UNDER SECTION 263 DEALS MAINLY WITH THE METHOD OF COMPUTING THE DEDUCTION UNDER SECTION 10B. 1.1 IT IS RESPECTFULLY SUBMITT ED THAT THE DECISION OF THE HON'BLE KERALA HIGH COURT IN CIT V. PATSPIN INDIA LTD (245 ITR 0097) HAS BEEN RENDERED PRIMARILY RELYING UPON THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN CIT V. HIRNATASINGIKE SEIDE (286 ITR 255) 1.1.1 THE ABOVE DECISIO N IS RENDERED IN RESPECT OF THE ASSESSMENT YEAR 1 994 - 95 WHICH IS PRIOR TO THE AMENDMENT OF SECTION 10B WITH EFFECT FROM THE ASSESSMENT YEAR COMMENCING ON 1 ST APRIL 2001 WHEREBY THE ALLOWANCE CONTEMPLATED PRIOR III THE AMENDMENT HAS BEEN NOW MADE A DEDUCTIO N FROM THE PROFITS OR THE UNDERTAKING. 1.2 SECTION 10B IS IN CHAPTER III OF THE ACT WHICH DEALS WITH INCOME WHICH DO NOT FORM PART OF THE TOTAL INCOME AND CONTEMPLATES A SPECIFIC DEDUCTION FOR A SPECIFIC ELIGIBLE UNDERTAKING IRRESPECTIVE OF ANY OTHER FAC TORS WHICH MIGHT AFFECT THE COMPUTATION OF THE TOTAL TAXABLE INCOME. PLEASE SEE PAGE C FOR THE COMPUTATION OF THE DEDUCTION UNDER SECTION 10B AND PAGE A&B FOR THE COMPUTATION OF INCOME. 1.3 IN SO FAR AS IT IS A DEDUCTION RELATING TO THE PROFIT OF THE UND ERTAKING IT HAS TO BE STRICTLY COMPUTED ON THE BASIS OF THE PROFIT OF THE UNDERTAKING ONLY AND ALSO IN ACCORDANCE WITH THE FORMULA PRESCRIBED IN SUBSECTION (4) OF SECTION 10B. 1.4 IT IS ALSO SUBMITTED THAT A PLAIN READING OF THE RETURN OR INCOME IN FORM I TR - 6 APPLICABLE FOR COMPANIES IN RESPECT OF THE ASSESSMENT YEAR 2011 - 12 UNDER SCHEDULE BP(PAGE 12), THE PROFIT OF THE BUSINESS IS QUANTIFIED UNDER SERIAL NO..34 (PAGE 13) AND THE DEDUCTION UNDER SECTION 10B IS ALLOWED UNDER SERIAL NO. 35 (PAGE 13) TO ARRIV E AT THE NET PROFIT OR LOSS FROM BUSINESS OR PROFESSION UNDER SERIAL NO.A37. 1.5 THIS RESULTANT PROFIT OR LOSS IS TAKEN UNDER SERIAL NO. 2(I) (PAGE 10) UNDER PART TI FOR COMPUTING THE TOTAL INCOME. 1.6 IT IS ONLY AFTER THE INCOME FROM ALL THE HEADS AR E CUMULATED UNDER SERIAL NO.5 (PAGE 10) OF PART TI THAT THE BROUGHT FORWARDED LOSSES ARE SET OFF UNDER SERIAL NO.8 (PAGE 10). 1.7 THE ABOVE BROUGHT FORWARDED LOSSES ARE QUANTIFIED IN SCHEDULE BFLA (PAGE 18) WHICH INCLUDES THE BROUGHT FORWARD LOSSES UNDER SECTION 72(2) AND UNABSORBED DEPRECIATION UNDER SECTION 32(2) WITH PRIORITY OF SETOFF OFF FOR BUSINESS LOSS OVER UNABSORBED DEPRECIATION. IT IS THEREFORE SUBMITTED THAT THE ABOVE ORDER OF COMPUTATION ITA NO . 203/C/2016 5 OF THE TAXABLE INCOME AS DETAILED IN ITR - 6 AS PRESCRIBED UNDER THE INCOME TAX RULES 1962 IS BINDING ON THE ASSESSING OFFICERS AND IS THE CORRECT METHOD TO BE FOLLOWED TO COMPUTING THE TAXABLE INCOME. 1.8 THE ABOVE VIEW HAS BEEN CONFIRMED IN SEVERAL DECISIONS, A FEW OF WHICH ARE LISTED BELOW: 1. KANATAKA HIGH COURT IN CIT & ANOTHER V. YOKOGAWA INDIA LTD & OTHERS (341 ITR 0385) 2. THE BOMBAY HIGH COURT IN CLT V. BLACK & VEATCH CONSULTING PVT LTD. (348 ITR 072) 3. ITAT CHENNAI C SPECIAL BENCH IN SCIENTIFIC ATLANTA INDIA TECHNOLOGY (P) LTD V. ASST. CIT (129 ITJ 0273) THE ABOVE DECISION HAS DEALT IN LENGTH WITH THE CORRECT INTERPRETATION OF THE PROVISIONS OF SECTION 10B PRIOR TO ITS AMENDMENT AND AFTER ITS AMENDMENT WITH EFFECT FROM 01 - 04 - 200I. 1.9 IT IS ALSO SUBMITTED THAT THE APEX COURT HAS HELD IN CIT V. VEGET ABLE PRODUCTS LTD (88 ITR 0192) - THAT WHERE TWO REASONABLE CONSTRUCTIONS ARE POSSIBLE THEN THE CONSTRUCTION FAVORABLE TO THE ASSESSEE MUST BE ADOPTED. THEREFORE ANY VIEW TAKEN BY NOT ALLOWING THE WHOLE OF THE DEDUCTION UNDER SECTION 10B OF THE ELIGIBLE UN IT WOULD RESULT IN A VIOLATION OF THE PROVISIONS OF THE INCOME TAX RULES, 1962 AND WOULD REND R SUCH ASSESSMENT OR AN INTERPRETATION THEREOF AS BAD IN LAW. 1.10 THE ASSESSING OFFICER HAS MADE THE COMPUTATION OF THE DEDUCTION UNDER SECTION 10B IN ACCORDANC E WITH LAW AND THE STAND NOW TAKEN FOR THE ISSUE OF THE ORDER UNDER SECTION 263 IS ONLY A CHANGE OF OPINION AND DOES NOT FULFILL THE TWIN CONDITIONS OF ERRONEOUS OR PREJUDICIAL TO THE REVENUE WARRANTING PROCEEDINGS UNDER SECTION 263 AND DOES NOT THEREFORE STAND THE DUAL TEST TO QUALIFY FOR THE PROCEEDINGS UNDER SECTION 263. 1.10.1 RELIANCE IS PLACED ON THE DECISION OF, 1. THE SUPREME COURT IN COMMISSIONER OF INCOME TAX V. MAX INDIA LTD (2C) 5 ITR 0282 (PAGES 8 AND 9 OF THE PAPER BOOK) 2. THE GUJARAT HIGH COURT IN COMMISSIONER OF INCOME TAX V. ARVIND JEWELLERS (259 ITR 0502) (PAGES 10 TO 13 OF THE PAPER BOOK) 3. THE BOMBAY HIGH COURT IN COMMISSIONER OF INCOME TAX V. DESIGN & AUTOMATION ENGINEERS (BOMBAY) (P) LTD: ((2010) 323 ITR 0632 (PAGES 14 TO 17 OF TH E PAPER BOOK) 2. IT IS NOT CORRECT ON THE PART OF THE PRINCIPAL COMMISSIONER OF INCOME TAX TO COME TO THE CONCLUSION THAT THE DEDUCTION UNDER SECTION 10B WAS NOT VERIFIED BY THE ASSESSING OFFICER. 2.1 IT IS RESPECTFULLY SUBMITTED THAT ALL THE RELEVANT DOCUMENTS RELATING TO THE CLAIM OF THE ASSESSEE UNDER THE SECTION 10B WAS FILED BEFORE THE ASSESSING OFFICER AND VERIFIED BY HIM AND SUCH AN ALLEGATION IS CONTRARY TO THE FACTS AND THEREFORE BAD IN LAW. ITA NO . 203/C/2016 6 2.2 IT IS ALSO SUBMITTED THAT IT IS NOT CORRECT TO COME TO A CONCLUSION THAT THE ASSESSMENT HAS BEEN COMPLETED BY THE ASSESSING OFFICER WITHOUT MAKING PROPER ENQUIRY, JUST BECAUSE THE ASSESSMENT ORDER WAS NOT AN ELABORATE ONE. THE REASON WHY IT WAS NOT AN ELABORATE ORDER IS DUE TO THE FACT THAT THE TAX LIA BILITY WAS ONLY UNDER MAT AND NOT THE REGULAR COMPUTATIONS. FOR MAT COMPUTATION PLEASE REFER PAGE D. 2.3 RELIANCE IS PLACED ON THE DECISIONS OF 1. ITAT KOLKATA (C) BENCH IN MAITHAN INTERNATIONAL V. ASSISTANT COMMISSION R OR INCOME TAX ((2012) L34 ITD 03 93 (PAGE 18 TO 27 OF THE PAPER BOOK 2. DELHI HIGH COURT IN COMMISSIONER OF INCOME TAX V. ASHISH RAJPAL (320 ITR 0674) (PAGES 28 TO 39 OF THE PAPER BOOK) 3. THE SERIAL NO. IV OF THE ORDER UNDER SECTION 263 DEALS WITH NON - RECONCILIATION OF TDS CERTIFICATE AND INCOME CREDITS IN THE BOOKS. 3.1 IT IS THE RESPECTFULLY SUBMITTED THAT THERE IS NO ESCAPEMENT OF INCOME AT ALL IN RESPECT OF INTEREST SINCE THE INTEREST COME FROM THE BANK IS ACCOUNTED ON THE BASIS OF THE BANK STATEMENT AND THE BANK RECONCILIATION IS DONE ON THE MONTHLY BASIS. 3.2 IN RESPECT OF THE INTEREST FROM THE ELECTRICITY BOARD THE AMOUNT IS REDUCED FROM THE ELECTRICITY BILL AND NO AMOUNT IS PAID IN CASH AND IS THEREFORE ACCOUNTED AND THERE IS NO LOSS OF REVENUE. 3.3 SINCE THERE IS NO ESCAPEMEN T OF INCOME IN RESPECT OF INTEREST INCOME, THERE IS NO ERROR OR PREJUDICE TO REVENUE WARRANTING PROCEEDINGS UNDER SECTION 263. 4. WITH REGARD TO THE EXCESS DEDUCTION UNDER SECTION 35(2AB) MENTIONED IN THE SERIAL NO. III OF THE ORDER UNDER SECTION 263, 4 .1 IT IS SUBMITTED THAT ALL THE RELEVANT DOCUMENTS WITH REGARD TO THE ELIGIBLE CLAIMS AND THE APPROVAL (PAGES 73 TO 75 OF THE PAPER BOOK) WAS FILED WITH THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDING ARE VERIFIED BY HIM. 4.2 THE EXCESS DEDUCTION UNDER SECTION 35(2AB) IS ONLY A MISTAKE APPARENT ON THE RECORD TO BE RECTIFIED UNDER SECTION 154 AND DOES NOT THEREFORE WARRANT OR JUSTI IY ANY PROCEEDINGS UNDER SECTION 263 OF THE ACT.CIT VS DR B A RAJARISHNAN (KER.HC) (1997) 226 ITR 0323) IT IS ALSO SUB MITTED THAT THE REQUIREMENT OF THE ASSESSMENT ORDER BEING ERRONEOUS AND PREJUDICIAL TO THE REVENUE MUST TOGETHER BE SUBSISTING IN ORDER TO JUSTIFY ANY PROCEEDINGS UNDER SECTION 263 AND SHOULD NOT BE AN ACCOUNT OF A CHANGE IN PERSONAL OPINION. IT IS ALSO SU BMITTED THAT THE AMENDMENT TO SECTION 263 BY ADDITION OF EXPLANATION 2 APPLIED ONLY TO AN ASSESSMENT ORDER PASSED AFTER 01 - 06 - 2015 AND IS THEREFORE NOT APPLICABLE TO THE ABOVE ASSESSMENT ORDER. WE WOULD REQUEST YOU TO BE KIND ENOUGH TO CONSIDER THE ABOVE ARGUMENT NOTE WHILE DISPOSING OFF THE APPEAL. ITA NO . 203/C/2016 7 5 THE LD DR, ON THE OTHER HAND SUPPORTED THE ORDER OF THE CIT . THE LD DR SUBMITTED THAT THE COMPUTATION OF DEDUCTION U/S 10B MADE BY THE ASSESSEE IS ERRONEOUS IN LIGHT OF THE JUDGMENT OF THE HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS PATSPIN INDIA LTD REPORTED IN 245 CTR 97 AND HENCE, THE REVISIONARY ORDER PASSED BY THE CIT U/S 263 OF THE ACT IS JUSTIFIED AND THE SAME IS TO BE UPHELD. 6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MA TERIAL ON RECORD. ADMITTEDLY , IN THIS CASE, THE ASSESSEE HAS COMPUTED THE DEDUCTION U/S 10B OF THE ACT BEFORE REDUCING THE BROUGHT FORWARD LOSS AND UNABSORBED DEPRECATION. THE SAID COMPUTATION OF THE ASSESSEE IS AGAINST THE JUDGMENT OF THE HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF CIT VS PATSPIN INDIA LTD R EPORTED IN 245 C TR 97. AGAINST THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS PATSPIN INDIA LTD,, A REVIEW PETITION WAS FILED AND THE SAME WAS DISMISSED BY THE HON BLE HIGH C OURT . IN THE JUDGMENT RENDERED ON THE REVIEW PETITION, IN SPITE OF TAKING NOTE OF THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT, IN THE CASE OF CIT VS YOKOGAWA INDIA LTD REPORTED IN 341 ITR 385 (HONBLE KARNATAKA HIGH COURT JUDGMENT IS IN FAVOUR OF THE ASSESSEE), HAD DECIDED THE ISSUE AGAINST THE ASSESSEE. IN VIEW OF THE ABOVE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT, THE COMPUTATION OF DEDUCTION U/S 10B BY THE ASSESSEE, IS ERRONEOUS AND THE CIT IS JUSTIFIED IN INVOKING HIS REVISI ONARY ITA NO . 203/C/2016 8 JURISDICTION U/S 263 OF THE A CT. THEREFORE, WE UPHOLD THE SAME AS CORRECT AND IS IN ACCORDANCE WITH LAW. 7 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF NOV 2016. SD/ - SD/ - ( B P JAIN ) ( GEORGE GEORGE K ) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN: DATED 9 TH NOV 2016 RAJ* COPY TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT, 5 . DR 6 . GUARD FILE BY ORDER ASSISTANT REGISTRAR ITAT, COCHIN