first issue arising in this appeal is whether Revenue authorities were justified in holding that loss arising from Industrial Unit eligible for deduction under s. 10B of IT Act, 1961 ( Act ) cannot be set off against other income of assessee. Brief facts giving rise to this dispute are these. assessee was engaged in business of software development in Unit No. 35/38, Electronic Sadan No. 11, MIDC Bhosari Block, Pune. This unit was eligible unit under s. 10B of Act and assessee had been claiming benefit under this section up to asst. yr. 2000-01. For year under consideration, net profit as per P&L a/c amounted to Rs. 13,66,032. After making some adjustments regarding depreciation, preliminary expenses, deferred expenses and miscellaneous expenses, total income was computed by assessee at loss of Rs. 2,69,822. In course of assessment proceedings, it was noticed by AO that interest income of Rs. 57,31,948 was included in P&L a/c. It was also seen by AO from Form No. 56G that aforesaid industrial unit at Pune had shown loss of Rs. 43,65,916 and, therefore, income exempt under s. 10B was shown at nil. On other hand, it was seen that assessee had set off above loss against other incomes. AO was of view that if assessee wanted to have benefit of set off under s. 70 against other income not derived from industrial undertaking then assessee was required to file declaration in writing before due date of furnishing return under s. 139(1) to effect that provisions of s. 10B shall not be applicable for relevant assessment year. For this view he relied on provisions of s. 10B(8) of Act. Accordingly, assessee was asked to explain whether such declaration was filed by assessee. In reply dt. 15th March, 2004, assessee merely stated that provisions of s. 10B could not be applied since percentage of export turnover to total turnover was only 18.81 per cent. Therefore, no disallowance of loss could be made under s. 10B in view of provisions of sub-s. 2(ia) of s. 10B. AO again requested assessee to explain as to why Form No. 56G was filed if s. 10B was not applicable. In reply, assessee stated that Form No. 56G was filed only for sake of technical compliance of section. However, no exemption was claimed under said section as is also apparent from audit report. AO rejected explanation of assessee for reasons (i) that provisions of s. 10B(2)(ia) on which reliance was placed by assessee was no more applicable since omitted w.e.f. asst. yr. 2001-02. 100 per cent export oriented undertaking is defined as per cl. (iv) of Expln. 2 to s. 10B and this fact was not denied by assessee; (ii) since assessee had not filed any declaration under s. 10B(8), applicability of s. 10B could not be excluded and consequently, loss derived from industrial undertaking eligible for exemption under s. 10B could not be set off against other income under ss. 70 and 71 of Act. According to him, if such set off is allowed then it would amount to granting exemption in respect of other taxable income which is not permissible in law. matter was carried in appeal before CIT(A), before whom it was contended (i) there is no prescribed form of declaration to be made under s. 10B(8). Since it was mentioned in Form No. 56G that it did not have any income as per s. 10B, it could be implied that assessee had chosen not to be governed by s. 10B; (ii) provisions of s. 10B are applicable only where there is profit derived from industrial undertaking. Such provisions cannot be applied in case of loss; (iii) if provisions of s. 10B are not applicable then assessee cannot be fastened with any liability to tax. If assessee does not wish to avail benefit contemplated in Act then same cannot be forced upon it. Reliance was placed on various decisions i.e., decision of Hon ble Supreme Court in case of CIT vs. Mahendra Mills (2000) 159 CTR (SC) 381: (2000) 243 ITR 56 (SC) decisions of Tribunal i.e., in case of ITO vs. Expo Packaging (1995) 51 TTJ (Ahd) 174, Navin Bharat Industries Ltd. vs. Dy. CIT (2005) 92 TTJ (Mumbai)(TM) 1166: (2004) 90 ITD 1 (Mumbai)(TM); and (iv) even assuming that provisions of s. 10B are applicable to unit, assessee was entitled to adjust said loss against any other head of income as per provisions of ss. 70 and 71 of Act. only prohibition is that any loss which could not be set off cannot be carried forward to subsequent years as per provisions of s. 10B(6)(ii) of Act. There is no specific provision prohibiting operation of ss. 70 and 71 of Act. above contentions of assessee did not find favour with CIT(A). According to him, profits and gains derived from business eligible under s. 10B did not form part of total income and since profits and gains include s. 10B did not form part of total income and since profits and gains include losses also, neither profits nor loss from such business could be considered for purpose of computing total income. Consequently, losses arising from such unit could not be set off under provisions of ss. 70 and 71 of Act. He also endorsed view of AO that assessee had not exercised option to non-applicability of provisions of s. 10B by not filing declaration before due date of return as provided in sub-s. (8) of s. 10B and, therefore, assessee cannot be permitted to say that provisions of s. 10B are not applicable. On contrary it filed Form No. 56G which shows that assessee intended applicability of provisions of s. 10B. He also did not follow decisions of Tribunal in case of Navin Bharat Industries Ltd. (supra), delivered by Third Member for reasons given by him at p. 6 of order. Aggrieved by same, assessee has preferred appeal before Tribunal on this issue. Both parties have been heard at length. learned counsel for assessee has reiterated stand of assessee taken before lower authorities while learned Departmental Representative has relied on reasons given by Revenue authorities. Therefore, same need not be repeated. At outset, it may be mentioned that CIT(A) had proceeded on wrong footing that profits and gains (including loss) derived from industrial undertaking eligible under s. 10B do not form part of total income. It appears that CIT(A) was influenced by fact that s. 10B falls within Chapter III which gives title Income which do not form part of total income . It is settled legal position that marginal notes to section or heading or title given to particular section may be relevant in ascertaining intention of legislature but cannot control provisions of section if language is plain and unambiguous. language and scope of s. 10 and s. 10B are quite different though both sections fall under same head/chapter. Sec. 10 specifically provides that income falling within any of clauses mentioned therein would not be included in total income of assessee. But that is not legal requirement in s. 10A or s. 10B. For benefit of this order, sub-s. (1) of s. 10B is being reproduced as under: "10B. (1) Subject to provisions of this section, deduction of such profits and gains as are derived by hundred per cent export-oriented undertaking from export of articles or things or computer software for period of ten consecutive assessment years beginning with assessment year relevant to previous year in which undertaking begins to manufacture or produce articles or things or computer software, as case may be, shall be allowed from total income of assessee." (Emphasis supplied) perusal of above clearly reveals that deduction is allowed to assessee in respect of profits derived from undertaking eligible under this section from total income of assessee. That means total income of assessee would include profits or losses derived from such unit and if there is any profit, then eligible amount shall be deducted in computing total income. Accordingly, it is held that CIT(A) was not legally justified in holding that profits and gains of business eligible under s. 10B of Act do not form part of total income. view taken by us is also fortified by decision of Tribunal in case of Mindtree Consulting (P) Ltd. vs. Asstt. CIT (2006) 102 TTJ (Bang) 691. We also do not find merit in contention of learned counsel for assessee that on basis of Form No. 56G filed by assessee, it should be held that provisions of s. 10B are not applicable. obligation to file Form No. 56G arises from sub-s. (5) of s. 10B for claiming deduction under this section while sub-s. (8) permits assessee to file declaration in writing to effect that provisions of section need not be made applicable to him. Both are different obligations and benefits provided by statute. Therefore, filing of Form No. 56G cannot be equated with declaration to be filed under sub-s. (8) of s. 10B. purpose of both requirements is different. If assessee intends to avail benefit of provisions of s. 10B then it is required to file Form No. 56G duly certified by chartered accountant. On other hand, if assessee wants not to take benefit of s. 10B then it is required to file declaration as per provisions of sub-s. (8) of s. 10B. If such declaration is filed then concerned year shall be excluded in computing period of ten consecutive years for which deduction is allowable. If assessee does not file such declaration then this year would be included in period of ten consecutive years. In view of above discussion, contention of assessee that provisions of s. 10B would be inapplicable on basis of Form No. 56G cannot be accepted. Now question arises that whether loss incurred in business eligible under s. 10B can be set off against other incomes of assessee under s. 70 or 71 of Act. Having held that income from eligible business under s. 10B is to be taken into consideration in computing total income of assessee, we are of view that all provisions of Act would be applicable for purpose of computing total income of assessee unless expressly excluded by legislature. perusal of s. 10B reveals that sub-s. (6) is non obstante clause which provides that loss referred to in sub-s. (1) of s. 72 or sub-s. (1) or sub-s. (3) of s. 74, insofar as such loss relates to business of undertaking under s. 10B shall not be carried forward or set off where such loss relates to any of relevant assessment years ending before 1st April, 2001. Similarly, it also excludes application of certain other sections partially or totally in computing income of such business. However, it is pertinent to note that provisions of s. 70 or 71 have not been included in non obstante provisions and, therefore, it cannot be said that provisions of s. 70 or 71 cannot be applied in computing income of assessee. Had legislature intended that provisions of ss. 70 and 71 should not be applied in respect of loss incurred in business eligible under s. 10B, it could have specifically provided so as provided in respect of s. 72 or s. 74. view taken by us is also fortified by unreported decision of Third Member in case of Navin Bharat Industries Ltd. (supra), wherein it has been held that provisions of s. 70 or 71 are applicable even in respect of loss incurred in business eligible, under s. 10B or 10A. In view of above discussion, it is held that assessee is entitled to set off loss incurred in industrial unit at Pune which is eligible under s. 10B of Act against other incomes earned by him. order of CIT(A) is, therefore, set aside on this issue and consequently, AO is directed to allow set off of business loss incurred by assessee in aforesaid unit against other incomes. next issue arising in this appeal relates to treatment of interest income of Rs. 57,31,948, training fees Rs. 30,000 and income from sale and purchase of software. According to assessee, these incomes form part of income derived from industrial unit eligible under s. 10B of Act while according to Revenue these incomes were independent incomes earned by assessee and, therefore, could not be considered as income derived from such unit. After hearing both parties, we find that issue relating to interest income and training income came up before Tribunal in assessee s own case pertaining to asst. yrs. 1998-99 and 2000-01. Tribunal vide order dt. 26th July, 2007 (ITA Nos. 3007 and 3008/Mum/2004) held that training income was to b e treated as income derived from industrial unit under s. 10B while interest income could not be said to be derived from industrial unit under s. 10B though such income was in nature of business income. Therefore, following said decision it is held that interest income is to be treated as business income but cannot be treated as derived from industrial unit eligible under s. 10B of Act. However, training income would be considered as income from unit eligible under s. 10B. As far as profit on purchase and sale of software is concerned, learned counsel for assessee has not been able to submit as to how such income could be treated as income derived from industrial unit under s. 10B. Sec. 10B applies only to income which is derived from export of articles or things or computer software which are manufactured or produced in said unit. Therefore, in our opinion, profit arising from purchase and sale of software cannot be treated as income derived from industrial unit under s. 10B of Act. order of CIT(A) is, therefore, modified accordingly. next issue relates to disallowance of Rs. 15,83,328 under s. 35D of Act. assessee had incurred expenditure of Rs. 79,31,642 which was amortised over period of five years and thus 1/5th of such expenditure was claimed as deduction under s. 35D of Act. AO disallowed claim under s. 35D as such expenditure did not fall under aforesaid provisions. He also rejected alternate plea of assessee that such expenditure should be considered under s. 37(1) of Act. According to him, such expenditure being considered under s. 37(1) of Act. According to him, such expenditure being capital in nature could not be allowed as deduction in view of Hon ble Supreme Court judgment in case of Brooke Bond India Ltd. vs. CIT (1997) 140 CTR (SC) 598: (1997) 225 ITR 798 (SC), which has been upheld by CIT(A). Both parties have been heard. learned counsel for assessee has not been able to point out as to how such expenditure would fall within ambit of s. 35D. However, alternatively, it has been contended by him that claim of assessee under s. 37 should be adjudicated. On other hand, learned Departmental Representative has relied on order of lower authorities. In our view, alternate contention of assessee requires fresh adjudication as AO had disallowed same without ascertaining nature of expenditure. AO in summarily manner held that expenditure was capital in nature without giving any reasons. Accordingly, we set aside order of CIT(A) on this issue and remit matter to file of AO for fresh adjudication after ascertaining real nature of expenditure incurred by assessee. last issue relates to working of book profit under s. 115JB of Act. AO has added back expenditure of Rs. 83,79,303 to net profit as per P&L a/c by applying provisions of cl. (f) of Explanation to s. 115JB. However, working of same is not clear from order of AO. According to assessee, it is only expenditure relating to earning of income under s. 10A or 10B can be added and not loss. In our opinion, gross injustice has been caused to assessee by not applying provisions of s. 115JB correctly. AO has conveniently added expenditure relating to s. 10B unit but failed to ignore provisions of cl. (ii) of said Explanation which provides that income relating to such unit credited to P&L a/c should also be reduced. Accordingly, we are of view that matter requires fresh adjudication. order of CIT(A) is, therefore, set aside on this issue and matter is remitted to file of AO for fresh adjudication after applying provisions of Explanation to s. 115JB correctly as observed by us. quantum of expenditure relatable to s. 10B unit shall be reworked out after giving fair opportunity of being heard to assessee. In result, appeal is partly allowed. *** SOVIKA INFOTEK LTD. v. INCOME TAX OFFICER