Commissioner of Income Tax vs Torry Harris Sea Foods (P) Ltd.

C.N. Ramachandran Nair, J.—Heard standing counsel appearing for the Appellant and advocate Sri P. Balakrishnan appearing for the Respondent-Assessee.

The question raised is whether the Assessee which has not furnished declaration u/s 10B(8) opting out of exemption available to it under the said provision before filing of the return can claim the benefit of carry forward of business loss for the next year u/s 10B(6) of the Income Tax Act. The Assessee was 100 per cent EOU that was claiming the benefit of Section 10B until the asst. yr. 1999-2000. However, for the asst. yr. 1999-2000, Assessee filed return of loss without making any claim for deduction u/s 10B. In the absence of prior intimation in terms of Section 10B(8) the AO declined the benefit of carry forward of loss claimed by the Assessee. Even though first appeal was rejected, Tribunal on second appeal held that non-filing of the declaration u/s 10B(8) was only a rectifiable mistake and accordingly Assessee was given opportunity to furnish declaration in terms of Section 10B(8) of the Act. The Assessee''s claim for computation of current year''s loss and the carry forward of the same in the subsequent year was allowed by the Tribunal on this ground. It is against this order the Revenue has filed this appeal.

After hearing both sides and after going through the records, we find that Respondent had forfeited the claim u/s 10B because they were debonded by the Development Commr. initially on provisional basis and thereafter through final order passed on 21st Oct., 1999. The Assessee in fact was well aware of the withdrawal of the benefit by the Development Commr., and so much so in the IT return filed for 1999-2000 they had not claimed the benefit of deduction u/s 10B. In view of these facts, we do not think the technicality of non-compliance of Section 10B(8) should deprive the Assessee from claiming the benefit of carry forward of business loss computed for that year. We therefore do not find any merit in the appeal filed against Tribunal''s order. Consequently appeal is dismissed.