Loss of a unit not eligible for any tax holiday cannot be set off against profits of the eligible unit for the purpose of computing deduction

The tax payer is carrying on business in two units. The unit engaged in software development was registered with the Software Technology Park of India and was claiming tax holiday under section 1 0A of the Income Tax Act, 1961 (Act) (“eligible unit”) and the other unit was engaged in trading activity (“non eligible unit”). The eligible unit had profits while the non eligible unit had incurred a loss during the relevant year. The tax payer had claimed tax holiday under section 10A of the Act for the eligible unit treating it as an independent unit without reducing the loss of non eligib...