2013 (3) TMI 663

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....s on two units i.e. STP Rajkot Unit and Rajkot Unit. 1.2 For the Assessment Year 2007-2008, the assessee filed its return of income declaring loss of Rs. 47,57,672/-. The profit of Rs. 35,64,021/- was shown in respect of STP Unit and loss of Rs. 73,53,842/- from non-STP Unit. The Assessing Officer, on noticing that the assessee claimed deduction under Section 10A of the Act in respect of STP Rajkot Unit without setting off the unabsorbed depreciation and business loss, disallowed the deduction of the said amount. The Assessing Officer was of the opinion that the brought forward loss and loss of other units were more than the profit of STP Unit which was eligible for deduction under Section 10A and as total income of the respondent- asses....

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....s of earlier years and reduce the long-term capital gain after giving appeal effect to the order of the assessment year in which the appellant's claim has been allowed?" 3. We heard learned counsel Mr. Pranav Desai for the appellant-revenue extensively who has fervently argued that both CIT(Appeals) and the Tribunal have committed an error in holding that the assessee eligible for deduction under Section 10A of the Act in as much as the brought forward loss/unabsorbed loss of other units were much more than the total profit of STP Unit eligible for deduction under Section 10A and the total income being negative after setting off of loss, no deduction ought to have been permitted. It can be noted from the order of the CIT(Appeals) tha....

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....ot an exemption. This was emphasised in a judgement of a Division Bench of this court, while construing the provisions of section 10B, in Hindustran Unilever Ltd. vs. Deputy CIT [2010] 325 ITR 102 (Bom) at paragraph 24. The submission of the Revenue placed its reliance on the literal reading of section 10A under which a deduction of such profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years is to be allowed from the total income of the assessee. The deduction under section 10A, in our view, has to be given effect to at the stage of computing the profits and gains of business. This is anterior to the application of the provisions of secti....