Sundaram Brake Linings Ltd., CHENNAI V. ACIT, CHENNAI

ITA 2093/CHNY/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4652 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 26-08-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: M BALASUBRAMANIYAM
• Keywords: Earning of tax free income; Services rendered outside India; Permanent establishment
• Section: 10AA; 14A; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A. NO. 2093/MDS/2012 (ASSESSMENT YEAR : 2009-10) M/S SUNDARAM BRAKE LININGS LTD., B-1, MTH ROAD, PADI, CHENNAI - 600 050. PAN : AADCS 4888 E (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(4), CHENNAI - 600 034. (RESPONDENT) APPELLANT BY : SHRI M. BALASUBRAMANIYAM, CA RESPONDENT BY : SHRI S. DAS GUPTA, JCIT DATE OF HEARING : 26.08.2013 DATE OF PRONOUNCEMENT : 29.08.2013 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, DIRECTED AG AINST ORDER DATED 14.9.2012 OF COMMISSIONER OF INCOME TAX (APPE ALS)-V, CHENNAI, IT HAS RAISED FOUR GROUNDS. 2. GROUND NO.1 ASSAILS DENIAL OF CLAIM FOR DEDUCTIO N UNDER SECTION 35(2AB) OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT' ). I.T.A. NO. 2093/MDS/12 2 3. ASSESSEE HAD IN ITS RETURN OF INCOME CLAIMED VER Y WEIGHTED DEDUCTION UNDER SECTION 35(2AB) OF THE ACT OF ` 1,33,04,000/-. THIS WAS DENIED BY THE A.O. FOR A REASON THAT ASSESSEE, THOUGH IT HAD FILED APPLICATION IN FORM NO.3CK, HAD FAILED TO SUBMIT AP PROVAL IN FORM NO.3CL. ASSESSING OFFICER HAD ASKED THE ASSESSEE T O FILE FORM NO.3CL ISSUED BY THE PRESCRIBED AUTHORITY, BUT, IT SEEMS THIS WAS NOT FURNISHED BY THE ASSESSEE. CLAIM OF ` 1,33,04,000/- WAS, THEREFORE, DISALLOWED. SUCH DISALLOWANCE WAS CONFIRMED BY THE CIT(APPEALS) FOR A REASON THAT FORM NO.3CL WAS NOT FILED BY THE ASSESSEE. 4. NOW BEFORE US, SHRI M. BALASUBRAMANIYAM, LEARNED A.R. FOR THE ASSESSEE, SUBMITTED THAT ASSESSEE HAD OBTAINED FORM NO.3CL ON 20.1.2012. AS PER LEARNED A.R., THE SAID FORM NO.3 CL, A COPY OF WHICH HAS BEEN PLACED AT PAPER-BOOK PAGES 37-38, HA D GIVEN RECOGNITION TO THE IN-HOUSE RESEARCH & DEVELOPMENT OF THE ASSESSEE AND ALSO GIVEN COST OF SUCH FACILITY ASSESSMENT YEA R WISE FOR BOTH 2009-10 AND 2010-11. RELIANCE WAS ALSO PLACED ON T HE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. SAND AN VIKAS (INDIA) LTD. (335 ITR 117). I.T.A. NO. 2093/MDS/12 3 5. PER CONTRA, SHRI S. DAS GUPTA, APPEARING FOR REV ENUE, SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 6. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. NO DOUBT, ASSESSEE WAS UNABLE TO PRODUCE FORM NO.3C L DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR BEFORE THE CIT( APPEALS). HOWEVER, HON'BLE DELHI HIGH COURT IN THE CASE OF SA NDAN VIKAS (INDIA) LTD. (SUPRA) HAS CLEARLY HELD THAT DATE OF CERTIFICATE WAS NOT IMPORTANT INSOFAR AS CLAIM FOR WEIGHTED DEDUCTION U NDER SECTION 35(2AB) WAS CONCERNED. WE ARE, THEREFORE, OF THE O PINION THAT THE MATTER REQUIRES A FRESH LOOK BY THE A.O. WE THEREF ORE SET ASIDE THE ORDERS OF AUTHORITIES BELOW IN THIS REGARD AND REMI T THE ISSUE REGARDING CLAIM OF ASSESSEE UNDER SECTION 35(2AB) B ACK TO THE FILE OF THE A.O. FOR CONSIDERATION AFRESH IN THE LIGHT OF F ORM NO.3CL DATED 20 TH JANUARY, 2012 ISSUED BY DEPARTMENT OF SCIENTIFIC A ND INDUSTRIAL RESEARCH, GOVERNMENT OF INDIA. 7. GROUND NO.1 OF THE ASSESSEE IS TREATED AS ALLOWE D FOR STATISTICAL PURPOSES. 8. VIDE ITS GROUND NO.2, ASSESSEE IS AGGRIEVED ON D ISALLOWANCE UNDER SECTION 14A OF THE ACT. I.T.A. NO. 2093/MDS/12 4 9. ASSESSING OFFICER HAS MADE A DISALLOWANCE OF ` 1,16,291/- UNDER SECTION 14A OF THE ACT FOR A REASON THAT BORR OWED FUNDS WERE UTILIZED FOR MAKING INVESTMENT WHICH COULD GIVE RAI SE TO TAX-FREE INCOME. THOUGH THE ASSESSEE HAD NOT CLAIMED EXEMPT INCOME, ASSESSING OFFICER INVOKED SECTION 14A OF THE ACT. 10. ASSESSEES APPEAL BEFORE CIT(APPEALS) DID NOT M EET WITH SUCCESS. CIT(APPEALS), RELYING ON HIS OWN ORDER FO R THE PRECEDING YEAR 2008-09, HELD THAT THE ASSESSING OFFICER WAS J USTIFIED IN MAKING DISALLOWANCE UNDER SECTION 14A READ WITH RULE 8D OF INCOME-TAX RULES, 1962. ACCORDING TO HIM, FACTS OF THE CASE F OR THE IMPUGNED ASSESSMENT YEAR WERE SIMILAR TO THOSE FOR THE IMMED IATE PRECEDING ASSESSMENT YEAR. 11. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT THIS TRIBUNAL IN ASSES SEE'S OWN CASE FOR ASSESSMENT YEAR 2008-09 HAD REMITTED THE ISSUE REGA RDING DISALLOWANCE UNDER SECTION 14A OF THE ACT, BACK TO THE FILE OF THE ASSESSING OFFICER FOR CONSIDERATION AFRESH. A COPY OF THE ORDER OF THIS TRIBUNAL IN I.T.A. NO. 1434/MDS/2012 DATED 27 TH SEPTEMBER, 2012, WAS PLACED ON RECORD AT PAPER-BOOK PAGES 39 TO 48. I.T.A. NO. 2093/MDS/12 5 12. PER CONTRA, LEARNED D.R. STRONGLY SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 13. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. ON A SIMILAR DISALLOWANCE MADE FOR ASSESSMENT YEAR 2008-09, IT WAS HELD BY THIS TRIBUNAL AT PARA 6, AS UNDER:- 6. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. T HE CASE OF THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS INCU RRED INTEREST EXPENDITURE TOWARDS TERM LOANS AND OTHERS AND ACCOR DING TO HIM THE INTEREST EXPENDITURE WAS INCURRED ON BORROWINGS WHICH WERE USED FOR THE PURPOSE OF INVESTMENTS. THE LEARNED C IT(APPEALS) CONFIRMED THE SAME. ACCORDING TO THE ASSESSEE, NO BORROWINGS WERE USED FOR THE PURPOSE OF INVESTMENTS ON SHARES AND THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON PAGES 44 & 45 OF THE PAPER BOOK AND SUBMITTED THAT NO BORROWINGS WERE US ED FOR THE PURPOSE OF INVESTMENTS. AFTER CAREFUL CONSIDERATIO N OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE A SSESSING OFFICER HAS NOT EXAMINED THE PAPER BOOK FILED BY TH E ASSESSEE BEFORE US, PARTICULARLY PAGES 44 & 45. WE THEREFOR E SET ASIDE THE ORDER PASSED BY THE LEARNED CIT(APPEALS) AND RE MIT THE MATTER BACK TO THE ASSESSING OFFICER TO EXAMINE THE PAPER BOOK AT PAGES 44 & 45 AND DECIDE THE ISSUE AFRESH IN ACC ORDANCE WITH LAW. THIS GROUND OF APPEAL FILED BY THE ASSESSEE I S THEREFORE ALLOWED FOR STATISTICAL PURPOSES. LD. CIT(APPEALS) HAS CLEARLY GIVEN A FINDING THAT F ACTS RELATING TO THE ISSUE WERE VERY SIMILAR TO THAT OF ASSESSMENT YEAR 2008-09. THEREFORE, IN THE INTEREST OF JUSTICE, FOR THE IMPU GNED ASSESSMENT YEAR ALSO, WE SET ASIDE THE ORDERS OF AUTHORITIES B ELOW IN REGARD TO THE I.T.A. NO. 2093/MDS/12 6 ISSUE OF DISALLOWANCE UNDER SECTION 14A OF THE ACT, BACK TO THE FILE OF THE A.O. FOR CONSIDERATION AFRESH, IN ACCORDANCE WI TH DIRECTIONS GIVEN FOR ASSESSMENT YEAR 2008-09. 14. GROUND NO.2 OF THE ASSESSEE IS ALLOWED FOR STAT ISTICAL PURPOSES. 15. VIDE ITS GROUND NO.3, GRIEVANCE RAISED BY THE A SSESSEE IS THAT A DISALLOWANCE OF ` 86,84,000/- MADE UNDER SECTION 40(A)(IA) OF THE AC T ON EXPORT COMMISSION PAID TO ITS AGENTS ABROAD WITH OUT DEDUCTING TAX AT SOURCE, WAS CONFIRMED BY THE CIT(APPEALS). 16. ASSESSEE, DURING THE RELEVANT PREVIOUS YEAR, PA ID FOLLOWING PAYMENTS TO VARIOUS OVERSEAS AGENTS, WHO HAD PROCUR ED ORDERS FOR ASSESSEE ABROAD:- SL.NO. NAME OF THE PAYEE COMMISSION ( ` ) 1. M/S TOM NEID, USA 60,45,661 2. M/S V.C. EDWART, SINGAPORE 8,51,263 3. M/S TVS AUTO PARTS, SRI LANKA 5,21,171 4. M/S MANSONS OVERSEAS, BANGLADESH 3,72,924 5. M/S SPARTAN SERVICES, CANADA 3,06,271 6. M/S DAHAL TRADING, MAURITIUS 1,74,562 7. M/S BABU VARSANI, KENYA 1,73,146 8. M/S INTERNATIONAL DIESEL SERVICES, KUWAIT 1,66,572 9. M/S WISCOM INTERNATIONAL, SINGAPORE 72,754 TOTAL 86,84,324 I.T.A. NO. 2093/MDS/12 7 ASSESSING OFFICER WAS OF THE OPINION THAT ASSESSEE WAS BOUND TO DEDUCT TAX AT SOURCE, SINCE BY VIRTUE OF EXPLANATIO N TO SECTION 9(2) OF THE ACT, IT WAS NOT NECESSARY FOR AGENTS ABROAD TO HAVE A BUSINESS CONNECTION IN INDIA OR PERMANENT ESTABLISHMENT IN I NDIA. AS PER THE A.O., ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE AS SP ECIFIED UNDER SECTION 195 OF THE ACT. HE MADE A DISALLOWANCE UND ER SECTION 40(A)(IA) OF THE ACT. LD. CIT(APPEALS) CONFIRMED T HE DISALLOWANCE PLACING RELIANCE ON HIS OWN ORDER FOR ASSESSMENT YE AR 2008-09 IN ASSESSEE'S OWN CASE. 17. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT SIMI LAR ISSUE REGARDING DISALLOWANCE UNDER SECTION 40(A)(IA) HAD COME UP BEFORE THIS TRIBUNAL IN PRECEDING ASSESSMENT YEAR AS WELL. AS PER LEARNED A.R., IT WAS HELD BY THIS TRIBUNAL THAT THERE WAS N O LIABILITY FOR THE ASSESSEE TO DEDUCT TAX AT SOURCE. 18. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS O F AUTHORITIES BELOW. 19. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE CIT(APPEALS) CONFIRMED THE DISALLO WANCE WITH SPECIFIC NOTING THAT FACTS RELATING TO THE DISALLOW ANCE WERE VERY SIMILAR I.T.A. NO. 2093/MDS/12 8 TO THAT OF PRECEDING ASSESSMENT YEAR 2008-09. IT W AS HELD BY THIS TRIBUNAL AT PARAS 11 AND 12 OF ITS ORDER, AS UNDER: - 11. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURE OF FRICT ION MATERIALS. IT HAD PAID AGENCY COMMISSION TO THE FOREIGN AGENTS AMOUNTING TO ` 32.93 LAKHS. THE ASSESSEE HAS NOT DEDUCTED ANY T DS. ACCORDING TO THE ASSESSING OFFICER AND THE LEARNED CIT(APPEALS) TDS HAS TO BE DEDUCTED. THE ASSESSING OFFICER HAS NOT DISCUSSED ANYTHING AS TO HOW THE ASSESSEE HAS TO DE DUCT TDS. NOTHING WAS BROUGHT ON RECORD. THERE IS NOTHING IN THE ASSESSMENT ORDER THAT THERE IS A BUSINESS CONNECTIO N AND THAT THE ASSESSEE HAS TO DEDUCT TDS U/S 195 OF THE ACT. UND ER SIMILAR CIRCUMSTANCES, THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. EON TECHNOLOGY P. LTD. (343 ITR 366) HAS HELD AS UN DER: HELD, DISMISSING THE APPEAL, THAT THE ASSESSING OFF ICER HAD NOT DEALT WITH OR EXAMINED WHETHER THE COMMISSION I NCOME ACCRUED OR AROSE DIRECTLY OR INDIRECTLY FROM ANY BU SINESS CONNECTION IN INDIA BUT HAD MERELY RECORDED THAT TH E PAYMENT MADE TO THE U.K. COMPANY WAS TAXABLE IN IND IA BECAUSE OF ITS BUSINESS CONNECTION. THE ASSESSIN G OFFICER DID NOT ELABORATE OR HAD NOT DISCUSSED ON WHAT BASI S HE HAD COME TO THE CONCLUSION THAT BUSINESS CONNECTION A S ENVISAGED UNDER SECTION 9(1)(I) EXISTED. THE ASSES SEE HAD SUBMITTED THAT THE U.K. COMPANY WAS A NON-RESIDENT COMPANY AND DID NOT HAVE ANY PERMANENT ESTABLISHMENT IN IND IA. THE U.K. COMPANY WAS NOT RENDERING ANY SERVICE OR PERFO RMING ANY ACTIVITY IN INDIA ITSELF. THESE FACTS WERE NOT AND COULD NOT BE DISPUTED. THE STAND OF THE REVENUE WAS CONTRARY TO THE TWO CIRCULARS ISSUED BY THE CBDT IN WHICH IT WAS CL EARLY HELD THAT WHEN A NON-RESIDENT AGENT OPERATES OUTSIDE THE COUNTRY NO PART OF HIS INCOME ARISES IN INDIA, AND SINCE PA YMENT WAS REMITTED DIRECTLY ABROAD, MERELY BECAUSE AN ENTRY I N THE BOOKS OF ACCOUNT WAS MADE, IT DID NOT MEAN THAT THE NON- RESIDENT HAD RECEIVED ANY PAYMENT IN INDIA. THIS F ACT ALONE I.T.A. NO. 2093/MDS/12 9 DID NOT ESTABLISH BUSINESS CONNECTION. IN CIRCULAR NO. 786, DATED FEBRUARY 7, 2000, IT HAD BEEN STATED THAT IN SUCH CASES, THE INDIAN ASSESSEE WAS NOT LIABLE TO DEDUCT TAX AT SOURCE UNDER SECTION 195 FROM THE COMMISSION AND OT HER RELATED CHARGES PAYABLE TO SUCH A NON-RESIDENT HAVI NG RENDERED SERVICE OUTSIDE INDIA. THE ASSESSING OFFI CER DID NOT MAKE OUT A CASE OF BUSINESS CONNECTION AS STIPU LATED IN SECTION 9(1)(I) OF THE ACT. HE HAD NOT MADE ANY FO UNDATION OR BASIS FOR HOLDING THAT THERE WAS BUSINESS CONNECTIO N AND, THEREFORE, SECTION 9(1)(I) OF THE ACT WAS APPLICABL E. THE APPELLATE AUTHORITIES, ON THE BASIS OF MATERIAL ON RECORD, HAD RIGHTLY HELD THAT BUSINESS CONNECTION WAS NOT EST ABLISHED. 12. WE FIND THAT THE FACTS IN THE PRESENT CASE ARE IDENTICAL TO THE FACTS IN THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. EON TECHNOLOGY P. LTD. (SUPRA). THE HONBLE DELHI HIGH COURT WHILE CONSIDERING SECTION 40(A)(IA) OF T HE ACT AND THE CBDT CIRCULAR NO. 23 DATED 23-7-1969 AND CIRCULAR N O. 786 DATED 7-2-2000 HAS HELD THAT BUSINESS CONNECTION WAS NOT ESTABLISHED AND THEREFORE NO TDS HAS TO BE DEDUCTED. IN THE PR ESENT CASE ALSO, THE ASSESSING OFFICER HAS FAILED TO ESTABLISH THE BUSINESS CONNECTION. WE, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF EON TEC HNOLOGY P. LTD. (SUPRA) HOLD THAT THE ASSESSEE HAS NO LIABILITY TO DEDUCT TDS. 20. RESPECTFULLY FOLLOWING THE ABOVE ORDER OF THIS TRIBUNAL, WE ARE OF THE OPINION THAT SUCH DISALLOWANCE IS TO BE DELE TED. 21. GROUND NO.3 OF THE ASSESSEE IS ALLOWED. 22. VIDE ITS GROUND NO.4, GRIEVANCE RAISED BY THE A SSESSEE IS THAT SET OFF OF LOSS RELATING TO THE UNIT ON WHICH ASSES SEE COULD CLAIM DEDUCTION UNDER SECTION 10AA OF THE ACT, WAS NOT AL LOWED. I.T.A. NO. 2093/MDS/12 10 23. ASSESSEE HAD, DURING THE RELEVANT PREVIOUS YEAR , SET OFF LOSS OF ` 11,66,000/- OF AN SEZ UNIT, WITH THE PROFITS OF A TAXABLE UNIT. ASSESSING OFFICER WAS OF THE OPINION THAT SECTION 1 0AA WAS AN EXEMPTION PROVISION AND THEREFORE, LOSSES OF A UNIT , WHICH WAS EXEMPT FROM TAX, COULD NOT BE ALLOWED FOR SET OFF A GAINST PROFITS OF OTHER UNITS. APPEAL OF THE ASSESSEE BEFORE CIT(APP EALS) DID NOT MEET WITH ANY SUCCESS. 24. NOW BEFORE US, LEARNED A.R., STRONGLY ASSAILING THE ORDER OF CIT(APPEALS), SUBMITTED THAT MINISTRY OF FINANCE, V IDE ITS CIRCULAR DATED 16 TH JULY, 2013, HAD CLEARLY SPECIFIED THAT INCOME/LOSS FROM VARIOUS SOURCES, WHETHER ELIGIBLE OR INELIGIBLE UNI TS, ARE TO BE AGGREGATED IN ACCORDANCE WITH SECTION 70 AND 71 OF THE ACT. A COPY OF THE CIRCULAR DATED 16 TH JULY, 2013 WAS PLACED ON RECORD AT PAPER- BOOK PAGES 49 TO 52. RELIANCE WAS ALSO PLACED ON T HE DECISION OF MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE OF CAPGEM INI INDIA (P) LIMITED V. CIT (2011) 46 SOT 195 (MUM.). 25. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS O F AUTHORITIES BELOW. I.T.A. NO. 2093/MDS/12 11 26. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF SET O FF OF LOSS OF SEZ UNIT WITH PROFITS OF OTHER UNITS, CONSIDERING SEZ U NIT TO BE ONE ON WHICH ASSESSEE COULD CLAIM EXEMPTION UNDER SECTION 10AA OF THE ACT. WE FIND THAT MUMBAI BENCH OF THIS TRIBUNAL IN THE CASE OF CAPGEMINI INDIA (P) LTD. (SUPRA) HAD HELD THAT SECT ION 10A WAS A DEDUCTION PROVISION AND NOT AN EXEMPTION PROVISION. WE ARE OF THE OPINION THAT THIS WOULD APPLY TO SECTION 10AA AS WE LL. CIRCULAR OF MINISTRY OF FINANCE (SUPRA) RELIED ON BY THE ASSESS EE, PLACED AT PAPER-BOOK PAGES 49 TO 52, HAS CONSIDERED IN DETAIL THE APPLICABILITY OF SECTION 10A/10AA/10B/10BA OF THE ACT, AS WELL. PARA 5.2 OF THE CIRCULAR DATED 16 TH JULY, 2013, IS REPRODUCED HEREUNDER:- 5.2 THE INCOME COMPUTED UNDER VARIOUS HEADS OF INCO ME IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER IV OF THE I.T. ACT SHALL BE AGGREGATED IN ACCORDANCE WITH THE PROVISIO NS OF CHAPTER VI OF THE I.T. ACT, 1961. THIS MEANS THAT FIRST TH E INCOME/LOSS FROM VARIOUS SOURCES, I.E. ELIGIBLE OR INELIGIBLE U NITS, UNDER THE SAME HEAD ARE AGGREGATED IN ACCORDANCE WITH THE PRO VISIONS OF SECTION 70 OF THE ACT. THEREAFTER, THE INCOME FROM HEAD IS AGGREGATED WITH THE INCOME OR LOSS OF THE OTHER HEA D IN ACCORDANCE WITH THE PROVISIONS OF SECTION 71 OF THE ACT. IF AFTER GIVING EFFECT TO THE PROVISIONS OF SECTION 70 AND 7 1 OF THE ACT THERE IS ANY INCOME (WHERE THERE IS NO BROUGHT FORW ARD LOSS TO BE SET OFF IN ACCORDANCE WITH THE PROVISIONS OF SEC TION 72 OF THE ACT) AND THE SAME IS ELIGIBLE FOR DEDUCTION IN ACCO RDANCE WITH THE PROVISIONS OF CHAPTER VI-A OR SECTION 10A, 10B ETC. OF THE I.T.A. NO. 2093/MDS/12 12 ACT, THE SAME SHALL BE ALLOWED IN COMPUTING THE TOT AL INCOME OF THE ASSESSEE. 27. IN THESE CIRCUMSTANCES, WE ARE OF THE OPINION T HAT ASSESSEE WAS ENTITLED TO CLAIM SET OFF OF LOSS OF SEZ UNIT W ITH THE PROFITS OF OTHER UNITS. ORDERS OF AUTHORITIES BELOW ARE SET ASIDE A ND ASSESSING OFFICER IS DIRECTED TO ALLOW THE SET OFF CLAIMED BY THE ASSESSEE. 28. GROUND NO.4 OF THE ASSESSEE IS ALLOWED. 29. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D PRO TANTO . ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 29 TH OF AUGUST, 2013, AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 29 TH AUGUST, 2013. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-V, CHENNAI-34 (4) CIT, CHENNAI-III, CHENNAI (5) D.R. (6) GUARD FILE