Case Law Details
Wipro Limited Vs ACIT (ITAT Bangalore)
ITAT Bangalore held that the loss arising in eligible SEZ/STPI undertakings are not required to be adjusted against the profits arising from other SEZ/STPI undertakings and the said loss can be adjusted against profits arising from non-SEZ/non-STPI units.
Facts- Assessee contested the action of the AO in setting off the loss arising from SEZ units against income earned by non-tax holiday units. During the course of assessment proceedings the AO noted that the assessee has various SEZ units at different locations. Among SEZ units all are not profit making and the assessee had incurred losses on the six SEZ units as tabulated by the AO. The AO noted that the assessee has set-off the losses of the six SEZ units from other taxable units and other divisions. The AO after discussing the relevant provisions did not allow set–off the losses of the six SEZ units and added back in to the total income of the assessee to the extent of Rs. 90.66 crores.
One of the allegation of the assessee to the eligibility of the assessee to claim deduction u/s 10AA of the Act for deemed exports, i.e., sales made to own units located in SEZs and Indian subsidiaries of Foreign MNCs. The claim of the assessee was rejected by the AO.
Conclusion- Held that the loss arising in eligible SEZ/STPI undertakings are not required to be adjusted against the profits arising from other SEZ/STPI undertakings and the said loss can be adjusted against profits arising from non-SEZ/non-STPI units. Accordingly, this issue is decided in favour of the assessee.
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