TaxTMI 
TaxTMI 
2017 (4) TMI 1357
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....d depreciation of Section10B exempted units from the profits of Section 10B exempted unit and secondly, set off losses of Section 10B units with non exempted income of such units. 3. The assessee company is engaged in the business of software development and registered under STPI, Noida. The assessee was having three units and the income of all the three units were exempt u/s 10B. In two of these units, located at Noida & Mayapuri, there were profit of Rs. 2,12,62,269/- and Rs. 51,85,974/- respectively while in the third unit located in Delhi there was a loss of Rs. 1,24,63,505/- on account of depreciation. The AO has set off the business loss of Rs. 1,24,63,505/- of Delhi unit with the income of the other two units and has reduced the e....
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....ade an addition as the loss of eligible Section 10B exempted units has to be set off with the profit of eligible Section 10B exempted units. The Ld. DR submits that the Karnataka High Court decision does not apply in this case as the same is related to Section 10A. 8. The Ld. AR submits that the issue related to Section 10B exempted unit has been settled by the Hon'ble Supreme Court of India in the case of CIT Vs. M/s Yokogawa India Ltd. vide order dated 16th December, 2016 in which Section 10A which is more similarly to Section 10B has been taken into consideration and it is held that from the reading of the relevant provisions of Section 10A, the deductions contemplated therein is qua the eligible undertaking of the assessee standi....
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....ked out at a future point of time, namely, after the expiry of period of tax holiday. 10. The Ld. AR submits that in assessee's appeal issue related to disallowance u/s 14A is not pressed. 11. The Ld. DR after reading the judgment of the Hon'ble Supreme Court submits that he is relying only on the order of Assessing Officer. 12. We have heard both the parties and perused the material available on record. The Hon'ble Supreme Court in case of Yokogawa India Ltd. held as under:- "15. Sub-section 4 of Section 10A which provides for pro rata exemption, necessarily involving deduction of the profits arising out of domestic sales, is one instance of deduction provided by the amendment. Profits of an eligible unit pertaini....
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.... aspect of the case which we would now like to turn to. 16. From a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee. This is also more than clear from the contemporaneous Circular No. 794 dated 9.8.2000 which states in paragraph 15.6 that, "The export turnover and the total turnover for the purposes of sections 10A and 10B shall be of the undertaking located in specified zones or ....
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....n Section 10A as 'total income of the undertaking'. 18. For the aforesaid reasons we answer the appeals and the questions arising therein, as formulated at the outset of this order, by holding that though Section 10A, as amended, is a provision for deduction, the state of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the state of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly." Thus, the issues contested in the present appeal are squarely covered by the Hon'ble Apex Court decision in case of Yokogawa India Ltd. as Section 10A as well as Section 10B of the Income Tax Act, 1961 are provisions relati....