Case Law Details
Undisputedly, the assessee has claimed business loss of Rs.3,90,35,968/- from MEPZ Unit at Chennai, eligible for deduction u/s 10AA. It is also not in dispute that assessee has claimed set off of this loss against the income from other units. AO proceeded to hold that loss from MEPZ unit at Chennai, which is eligible for deduction u/s 10AA, was not eligible to be set off against the profits from other units. However, ld. CIT (A) granted the relief to the assessee by relying upon the decision rendered by Hon’ble Bombay High Court in M/s. Hindustan Unilever Ltd. vs. DCIT – 325 ITR 102 (Bom.), ITAT, Bangalore Bench in Mindtree Consulting P. Ltd. vs. ACIT – 102 TTJ 691, Navin Bharat Industries Ltd. vs. DCIT – (2004) 90 ITD 1 (Mum.)(TM), ITAT, Delhi Bench in Honeywell International (India) P. Ltd. vs. DCIT – 108 TTJ 924 (Del.) and CBDT Circular No.7/DV/2013 dated 16.07.2013, that the provisions of section 10A is not in the nature of exemption and as such, the assessee was entitled to set off of losses sustained by eligible unit u/s 10A against the normal business income.
Keeping in view the fact that section 10AA makes the assessee eligible for deduction in the same manner, the deduction prescribed u/s 10A and 10B and it cannot be treated in the nature of exemption and as such, the loss suffered by the assessee in the unit eligible for deduction u/s 10AA can be set off against the normal business income.
FULL TEXT OF THE ITAT ORDER IS AS FOLLOWS:-
The appellant, Deputy Commissioner of Income-tax (LTU), New Delhi (hereinafter referred to as ‘the Revenue’) by filing the present appeal, sought to set aside the impugned order dated 28.02.2014 passed by Ld. CIT (Appeals)-LTU, New Delhi qua the assessment year 2008-09 on the grounds inter alia that :-
“1. On the facts and circumstances of the case and in law 14. CIT(A) has erred in deleting the addition of Rs.3,90,35,968/- made by AO on account of disallowance of set off of loss of MEPZ (10M) unit against income of taxable units.
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