Industrial Undertaking
This query is : Resolved
01 July 2011
Call center service is regarded as manufacture of computer software vide notification no 11521 dated 26/09/2000 for the purpose of section 10A, 10B and 80HHE.
Can the same definition for manufacture of computer software be considered for the purpose of section 72A also.
If yes, then please provide any relevant case law, if any...
Can the same definition for manufacture of computer software be considered for the purpose of section 72A also.
If yes, then please provide any relevant case law, if any...
01 July 2011
THE EXPRESSION IND UNDERTAKING IS CLEARLY DEFINED FOR THE PURPOSE OF SECTION 72A WHICH INCLUDE MFR OF COMP SOFTWARE
NOW FOR SECTION 10A SCOPE OF COMP SOFTWARE HAS BEEN WIDEDNED
U CAN USE THAT NOTIFICATION IN UR CASE
CA MANOJ GUPTA
JODHPUR
09828510543
NOW FOR SECTION 10A SCOPE OF COMP SOFTWARE HAS BEEN WIDEDNED
U CAN USE THAT NOTIFICATION IN UR CASE
CA MANOJ GUPTA
JODHPUR
09828510543
01 July 2011
The notification is given specifically for 10A, 10B and 80HHE..
How can we use this for the purpose of 72A..
How can we use this for the purpose of 72A..
01 July 2011
U/s 72A no definition of Computer software has been given, but it has been given in Section 10A to which the notification is related.
We have to borrow a thing from our relatives or friends when we do not have it. In case they also do not have, they may manage and give to us.
I also support the view of expert Mr Gupta.
We have to borrow a thing from our relatives or friends when we do not have it. In case they also do not have, they may manage and give to us.
I also support the view of expert Mr Gupta.
02 July 2011
I completely agree with both of you sir, but then in that case we can go by the definition given in 10A and 10B alone, why will we refer to any other board circular, if it has not been expressly said so.
Additionally definition of IU was in effect from 1-4-2000, where as the circular came on 26-9-2000.
Additionally definition of IU was in effect from 1-4-2000, where as the circular came on 26-9-2000.
01 August 2024
The interpretation of definitions and provisions related to industrial undertakings (IU) for different sections of the Income Tax Act can be nuanced. Let’s address your specific queries about Section 72A and its relationship with the definitions provided under Section 10A, 10B, and 80HHE, particularly in the context of call center services and computer software.
### **1. **Understanding Section 72A**
**Section 72A** deals with the carry-forward and set-off of accumulated losses and unabsorbed depreciation of an industrial undertaking in the case of a company taking over another company. This section provides the conditions under which accumulated losses and unabsorbed depreciation can be carried forward and set off.
### **2. **Definition of Industrial Undertaking (IU)**
The definition of an industrial undertaking (IU) under various sections of the Income Tax Act can vary:
- **Section 10A, 10B, 80HHE:** These sections provide specific definitions for industrial undertakings involved in the manufacture or production of computer software or information technology-enabled services (ITES). The notification you referred to (Notification No. 11521 dated 26/09/2000) clarifies that call center services are considered as the manufacture of computer software for the purpose of these sections.
- **Section 72A:** This section does not explicitly define what constitutes an industrial undertaking. Instead, it focuses on the carry-forward and set-off of losses and depreciation when there is a takeover of an undertaking.
### **3. **Applicability of Definitions for Section 72A**
**Using Definitions from 10A, 10B, and 80HHE for Section 72A:**
- **Consistency:** If the definitions and criteria used for determining what constitutes an IU under Section 10A, 10B, and 80HHE are well-established, they might be used as a reference point for interpreting similar terms under other sections, including Section 72A.
- **Case Law and Circulars:** If there is no direct provision in Section 72A about what constitutes an IU, courts or tax authorities may look at definitions used in other sections, provided those definitions are consistent with the legislative intent.
- **Relevance of Circulars:** Notifications and circulars issued by the CBDT (Central Board of Direct Taxes) or other authorities can provide interpretative guidance. However, their applicability to different sections needs careful consideration, especially if the definitions are not expressly adopted by other sections.
### **4. **Relevant Case Laws and Interpretations**
While there might not be a specific case law directly addressing the use of definitions from Section 10A and 10B for Section 72A, you can refer to general case laws that interpret similar provisions:
- **Case Law:** Look for judgments where the courts have interpreted terms like "industrial undertaking" and their applicability to various sections of the Income Tax Act. Cases interpreting similar definitions under one section could potentially offer insights into how these definitions might apply to other sections.
- **Circulars:** Circulars issued by the CBDT might also offer guidance on how definitions are to be interpreted across different sections. While the circular might not be explicitly binding, it can be persuasive in the absence of clear legislative provisions.
### **5. **Recommendations**
1. **Consult Tax Professionals:** Given the complexity and nuances involved, consulting a tax professional or legal expert familiar with the latest case laws and interpretations can provide tailored advice.
2. **Refer to Latest Circulars:** Check for any updates or recent circulars issued by the CBDT that might clarify the applicability of definitions across different sections.
3. **Consider Judicial Precedents:** Review judicial precedents where courts have interpreted definitions and their applicability to various tax provisions.
In conclusion, while definitions under Section 10A and 10B may provide a useful reference, the specific applicability to Section 72A should be considered in the context of judicial interpretations and relevant tax authorities' guidance.
### **1. **Understanding Section 72A**
**Section 72A** deals with the carry-forward and set-off of accumulated losses and unabsorbed depreciation of an industrial undertaking in the case of a company taking over another company. This section provides the conditions under which accumulated losses and unabsorbed depreciation can be carried forward and set off.
### **2. **Definition of Industrial Undertaking (IU)**
The definition of an industrial undertaking (IU) under various sections of the Income Tax Act can vary:
- **Section 10A, 10B, 80HHE:** These sections provide specific definitions for industrial undertakings involved in the manufacture or production of computer software or information technology-enabled services (ITES). The notification you referred to (Notification No. 11521 dated 26/09/2000) clarifies that call center services are considered as the manufacture of computer software for the purpose of these sections.
- **Section 72A:** This section does not explicitly define what constitutes an industrial undertaking. Instead, it focuses on the carry-forward and set-off of losses and depreciation when there is a takeover of an undertaking.
### **3. **Applicability of Definitions for Section 72A**
**Using Definitions from 10A, 10B, and 80HHE for Section 72A:**
- **Consistency:** If the definitions and criteria used for determining what constitutes an IU under Section 10A, 10B, and 80HHE are well-established, they might be used as a reference point for interpreting similar terms under other sections, including Section 72A.
- **Case Law and Circulars:** If there is no direct provision in Section 72A about what constitutes an IU, courts or tax authorities may look at definitions used in other sections, provided those definitions are consistent with the legislative intent.
- **Relevance of Circulars:** Notifications and circulars issued by the CBDT (Central Board of Direct Taxes) or other authorities can provide interpretative guidance. However, their applicability to different sections needs careful consideration, especially if the definitions are not expressly adopted by other sections.
### **4. **Relevant Case Laws and Interpretations**
While there might not be a specific case law directly addressing the use of definitions from Section 10A and 10B for Section 72A, you can refer to general case laws that interpret similar provisions:
- **Case Law:** Look for judgments where the courts have interpreted terms like "industrial undertaking" and their applicability to various sections of the Income Tax Act. Cases interpreting similar definitions under one section could potentially offer insights into how these definitions might apply to other sections.
- **Circulars:** Circulars issued by the CBDT might also offer guidance on how definitions are to be interpreted across different sections. While the circular might not be explicitly binding, it can be persuasive in the absence of clear legislative provisions.
### **5. **Recommendations**
1. **Consult Tax Professionals:** Given the complexity and nuances involved, consulting a tax professional or legal expert familiar with the latest case laws and interpretations can provide tailored advice.
2. **Refer to Latest Circulars:** Check for any updates or recent circulars issued by the CBDT that might clarify the applicability of definitions across different sections.
3. **Consider Judicial Precedents:** Review judicial precedents where courts have interpreted definitions and their applicability to various tax provisions.
In conclusion, while definitions under Section 10A and 10B may provide a useful reference, the specific applicability to Section 72A should be considered in the context of judicial interpretations and relevant tax authorities' guidance.
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