ITAT, BENCH `C’ [SPECIAL BENCH] CHENNAI
Scientific Atlanta India Technology Pvt. Ltd. Vs. ACIT,
Appeal No.:, ITA Nos. 229/Mds/2007 & 362/Mds/ 2008,
Decided on: February 5, 2010
ORDER
PER N. BARATHVAJA SANKAR. VICE PRESIDENT:
The Honourable President, Income Tax Appellate Tribunal, vide orders dated 24.04.2009 and 08.05.2009 constituted the present Special Bench to dispose of the captioned appeals as well as to adjudicate the following question of law:-
“Whether the business losses of a non eligible unit, whose income is not eligible for deduction under section 10A of the Act, have to be set off against the profits of the undertaking eligible for deduction under section 10A for the purposes of determining the allowable deduction under section 10A of the Act?”
2. The brief facts are that the assessee is a private limited company incorporated on July 17, 2000. In respect of assessment year 2003-04, the assessee filed a return claiming relief under section 10A of the Income-tax Act. During the years under appeal, the assessee had carried out business from two locations, viz. Chennai and Delhi. The Chennai Unit is eligible unit which was situated at Tidel Park, Taramani and registered with Software Technology Parks of India, was engaged in the business of software development. The Delhi Unit of the assessee carried out trading activities of various products in the field of video communication. For the assessment year 2003-04, the profit as per the memo of total income of the eligible unit (Chennai Unit) amounts to Rs.3,23,43,230/-. The trading Unit (Delhi Unit) reported a loss of Rs. 61,25,224/-. The assessee’s computation of deduction under section 10A was as under-
