ASSEAL India P. Ltd., Pune V. Assistant Commissioner of Income-tax,

ITA 1356/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1877 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 27-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Business income; Depreciation; Reason to believe; Unabsorbed depreciation
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , A M . / ITA NO. 1356 /PN/201 4 / ASSESSMENT YEAR : 20 0 7 - 0 8 AESSEAL INDIA PVT. LTD., GAT NO.85, AT POST VARVE, TALUKA BHOR, PUNE BANGALORE HIGHWAY, PUNE 41 2205 . / APPELLANT PUNE 41 2205 . / APPELLANT PAN: AA ECA1690F VS. THE ASST. COMMISS IONER OF INCOME TAX, CIRCLE 1(1) , PUNE . / RESPONDENT / APPELLANT BY : SHRI KISHORE PHADKE / RESPONDENT BY : SHRI S.K. RASTOGI, CIT / DATE OF HEARING : 0 3 . 0 5 .201 6 / DATE OF PRONOUNCEMENT: 05 . 0 5 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , PUNE , TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I , PUNE , DATED 0 3 . 02 .20 14 RELATING TO ASSESSMENT YEAR 20 0 7 - 0 8 AGAINST ORDER PASSED UNDER SECTION 1 4 3(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1 . THE LEARNED CIT (A) - I , PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNED A O IN SETTING OFF INCOME FROM STPI UNIT ( 10 A UNIT) AG AINST LOSS OF NON STPI UNIT. ITA NO. 135 6 /PN/20 1 4 AESSEAL INDIA PVT. LTD. 2 2 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN CONFIRMING THE VIEW OF THE LEARNED A O OF APPLICATION OF PROVISIONS OF SEC.32(2), 70, 71, 72 OF THE ITA, 1961 PRIOR TO APPLICATION OF PROVISIONS OF SEC. 10 A OF THE ITA, 19 61. 3 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN RELYING ON THE DECISION OF HON'BLE KARNATAKA HIGH COURT IN THE CASE OF HIMATSINGIKE SEIDE LTD. - 286 ITR 255, WHICH WAS BASED ON THE ERSTWHILE EXEMPTION SECTION, WHEREAS THE APPELLANT HAD CLAIME D DEDUCTION BASED ON THE PROVISIONS OF REVISED SEC. 10 A OF THE ITA, 1961. 4 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT FACTS PERTAINING TO THE CASE OF HIMATSINGIKE SEIDE LTD. (SUPRA) PERTAINS TO SET OFF OF BROUGHT FORWARD UN - ABSORBED DEPRECIATION AGAINST PROFIT OF ELIGIBLE BUSINESS. AS SUCH, THE RATIO OF THE SAID CASE CANNOT BE APPLIED IN THE CASE OF THE APPELLANT. 5 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING 5 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THAT PROVISIONS OF SEC. 2(45) OF TH E ITA, 1961 CANNOT BE IMPORTED FOR THE PURPOSE OF DETERMINING PROFITS TO BE DEDUCTED FROM THE TOTAL INCOME UNDER SEC. 10 A. 6 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE SUBMISSIONS MADE BY THE APPELLANT PERTAINING TO VARIOUS JUDICIAL PRECEDENTS WHEREIN FACTS IDENTICAL TO THE CASE THE APPELLANT HAVE BEEN DEALT. 7 . THE LEARNED CIT(A) - I, PUNE ERRED IN LAW AND ON FACTS IN IMPORTING THE PROVISIONS OF CIRCULAR NO.7/DV /2013 DATED 16/07/2013 WHEREAS THE SAID CIRCULAR WAS NOT AVAILABL E AT THE POINT OF FILING OF RETURN OF INCOME FOR AY 2007 - 08. 2007 - 08. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS SETTING OFF OF LOSSES AGAINST INCOME FROM STPI UNIT WHILE COMPUTING DEDUCTION UNDER SECTION 10A OF THE ACT. 4. THE LEARNED AUTHORIZED REPRESENTATIV E FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER OF TRIBUNAL IN M/S. KPIT CUMMINS INFOSYSTEMS LTD. VS. DCIT IN ITA NOS.1508 & 1509/PN/2011, RELATING TO ASSESSMENT YEARS 2005 - 06 & 2006 - 07 , ORDER DATED 30.11.2015. 5. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE WAS ENGAGED IN CARRYING ON OF TWO BUSINESS ACTIVITIES I.E. SOFTWARE DEVELOPMENT RELATING TO MECHANICAL SEALS AND ALSO MANUFACTURING OF MECHANICAL SEALS AND PARTS ITA NO. 135 6 /PN/20 1 4 AESSEAL INDIA PVT. LTD. 3 THERE OF. BOTH THE UNITS WERE SET UP AT DIFFERENT TIME INTERVALS. THE SOFTWARE DEVELOPMENT UNDERTAKING WAS REGISTERED UNDER STPI AND HAD CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT. IN THE RETURN OF INCOME FILED FOR INSTANT ASSESSMENT YEAR, THE ASSESSEE HA D CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT AGAINST THE PROFITS FROM SOFTWARE EXPORT ACTIVITY, WHICH WAS REGISTERED UNDER STPI. THE LOSS ARISING FROM THE MANUFACTURING ACTIVITY WAS CARRIED FORWARD TO BE ADJUSTED IN THE LATER YEARS. THE ASSESSING OFF ICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBJECTED TO THE SAID MANNER OF COMPUTATION OF INCOME BY NOT ADJUSTING THE LOSS FROM MANUFACTURING ACTIVITY AGAINST THE INCOME FROM STPI UNIT AND WAS OF THE VIEW THAT THE DEDUCTION UNDER SECTION 10A OF THE AC T IS TO BE ALLOWED ON THE SO CALLED ADJUSTED PROFITS OF STPI UNIT. THE ASSESSING OFFICER AFTER CONSIDERING THE EXPLANATION OF ASSESSEE IN THIS REGARD , REJECTED THE SAME AND RE - COMPUTED THE DEDUCTION ALLOWABLE UNDER SECTION 10A OF THE ACT AT RS.49,33,122/ - AS AGAINST THE CLAIM OF ASSESSEE AT RS. 1,71,39,375/ - . THE ASSESSING OFFICER DID NOT ALLOW CARRY FORWARD OF LOSSES. RS. 1,71,39,375/ - . THE ASSESSING OFFICER DID NOT ALLOW CARRY FORWARD OF LOSSES. 6. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER HOLDING THAT THE DEDUCTION UNDER SECTION 10A OF THE ACT WAS TO BE ALLOWED AFTER ADJUST ING LOSSES OF OTHER UNITS AGAINST INCOME FROM PROFITS & GAINS OF BUSINESS OF ELIGIBLE UNDERTAKING. THE CIT(A) FURTHER HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN NOT ALLOWING CARRY FORWARD OF THE CURRENT YEARS LOSS OF NON - 10A UNIT FOR SET OFF IN SUB SEQUENT YEARS. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 8. WE FIND THAT SIMILAR ISSUE OF CLAIM OF DEDUCTION UNDER SECTION 10A OF THE ACT BY ELIGIBLE UNIT AROSE BEFORE THE TRIBUNAL IN M/S. KPIT CUMMINS ITA NO. 135 6 /PN/20 1 4 AESSEAL INDIA PVT. LTD. 4 INFOSYSTEMS LTD. VS. DCIT (SUPRA) . IN THE FACTS OF THE SAID CASE, THE ASSESSEE WAS CLAIMING DEDUCTION UNDER SECTION 10A OF THE ACT IN RESPECT OF EXPORT OF SOFTWARE IN EIGHT UNITS AT DIFFERENT PLACES, OUT OF WHICH FIVE UNITS HAD DECLARED POSITIVE PROFITS AND BALANCE THREE UNITS HAD DECLARE D LOSSES FOR THE CAPTIONED ASSESSMENT YEARS. THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 10A OF THE ACT UNIT - WISE, WHEREAS THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID DEDUCTION UNDER SECTION 10A OF THE ACT IS TO BE ALLOWED TO THE ASSESSEE AFT ER SETTING OFF OF LOSSES OF THREE UNITS AGAINST THE PROFITS OF FIVE UNITS AND ON THE BALANCE, THE ASSESSEE WAS ENTITLED TO CLAIM THE SAID DEDUCTION. THE TRIBUNAL AFTER CONSIDERING THE ISSUE AND THE RATIO LAID DOWN BY VARIOUS DECISIONS OF HONBLE BOMBAY HI GH COURT, WAS OF THE VIEW THAT THE DEDUCTION UNDER SECTION 10A OF THE ACT IS UNIT SPECIFIC AND THE ASSESSEE WAS ENTITLED TO CLAIM THE DEDUCTION IN RESPECT OF PROFITS OF ELIGIBLE UNITS AND THE LOSSES SUSTAINED BY ANY UNIT HAD TO BE SET OFF AGAINST NORMAL BU SINESS PROFITS AND ARE TO BE CARRIED FORWARD. RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - FORWARD. RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN EXPORT OF SOFTWARE AND IT ENABLED SERVICES. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WAS RUNNING EIGHT UNITS AT DIFFERENT PLACES AND FIVE OF WHICH UNITS HAD DECLARED POSITIVE PROFITS AND THE BALANCE THREE UNITS DECLARED LOSSES FOR THE CAPTIONED ASSESSMENT YEAR. THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION U/S. 1 0A OF THE ACT IN RESPECT OF EXPORT OF SOFTWARE. THE ASSESSEE COMPUTED THE DEDUCTION U/S. 10A OF THE ACT BY TREATING EACH OF THE UNIT AS SEPARATE UNIT/UNDERTAKING AND CLAIMED THE DEDUCTION AT RS.24,55,53,914/ - . THE LOSSES FROM THREE UNITS AGGREGATING RS.4 ,55,31,667/ - WAS CARRIED FORWARD TO BE ADJUSTED IN THE SUCCEEDING YEARS. ON THE OTHER HAND THE REVENUE AUTHORITIES WERE OF THE VIEW THAT THE LOSSES EARNED BY THE ASSESSEE FROM SEPARATE UNIT HAVE TO BE ADJUSTED AGAINST THE PROFITS EARNED BY THE ASSESSEE IN SEPARATE UNITS AND AFTER MAKING THIS INTRA - HEAD SET OFF, THE DEDUCTION UNDER SECTION 10A OF THE ACT WERE TO BE ALLOWED TO THE ASSESSEE. IN THIS EXERCISE THE DEDUCTION UNDER SECTION 10A OF THE ACT WAS REDUCED TO RS.20,68,49,064/ - AND THERE WERE NIL CARRY FORWARD LOSS IN THE HANDS OF THE ASSESSEE. THE REASON FOR THE SAID ADJUSTMENT BY THE ASSESSING OFFICER AND COMMISSIONER OF INCOME TAX (APPEALS) WAS ON THE SURMISE THAT THE AMENDMENT BROUGHT TO SECTION 10A OF THE ACT W.E.F. 1 ST APRIL, 2001 UNDER WHICH DEDU CTION FROM INCOME WAS TO BE ALLOWED TO THE ASSESSEE AND NOT ANY EXEMPTION. FURTHER, THE ASSESSING OFFICER REFERRED TO THE PROVISIONS OF SECTION 70(1) AND OBSERVED THAT THE INTRA - HEAD ADJUSTMENT HAD TO BE MADE BEFORE CLAIMING THE DEDUCTION U/S. 10A OF THE ACT. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF ASSESSING OFFICER, WHICH HAS BEEN UPHELD BY THE COMMISSIONER OF INCOME TAX (APPEALS). ITA NO. 135 6 /PN/20 1 4 AESSEAL INDIA PVT. LTD. 5 13. UNDOUBTEDLY, AFTER THE AMENDMENT W.E.F. 1 ST APRIL, 2001 UNDER THE PROVISIONS OF SECTION 10A OF THE ACT, T HE ASSESSEE IS NOW ENTITLED TO DEDUCTION. PRIOR TO THE AMENDMENT THE ASSESSEE WAS ENTITLED TO EXEMPTION OF THE SAID INCOME. IN OTHER WORDS THE SAID INCOME DID NOT FORM PART OF THE TOTAL INCOME AND WAS EXCLUDED AT THE ENTITY LEVEL ITSELF. THE QUESTION WH ICH ARISES FOR ADJUDICATION IS WHETHER IN VIEW OF THE AMENDED PROVISIONS OF SECTION 10A OF THE ACT, UNDER WHICH DEDUCTION CAN BE CLAIMED BY AN ENTERPRISES, WHETHER THE INTRA HEAD ADJUSTMENT OF LOSSES OF CERTAIN UNITS IS TO BE MADE AGAINST THE PROFITS OF OT HER UNITS OF THE SAME ASSESSEE, BEFORE COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE ACT. 14. THE HON'BLE BOMBAY HIGH COURT IN HINDUSTAN UNILEVER LTD. VS. DCIT & ANR. (SUPRA) IN AN APPEAL RELATING TO ASSESSMENT YEAR 2004 - 05 WHERE REASSESSMENT PROCEED INGS WERE INITIATED UNDER SECTION 147/148 OF THE ACT ON SEVERAL ISSUES, CONSIDERED THE REASON TO BELIEVE RECORDED BY THE ASSESSING OFFICER WITH REGARD TO SET OFF OF LOSS INCURRED BY UNIT ELIGIBLE FOR DEDUCTION U/S. 10B OF THE ACT. THE ASSESSING OFFICER HA D REOPENED THE ASSESSMENT ON THE SURMISE THAT SINCE THE INCOME OF THE CRAB STICK UNIT WAS EXEMPTED FROM TAX UNDER SECTION 10B, THE LOSS OF THAT UNIT WAS WRONGLY SET OFF AGAINST THE NORMAL BUSINESS INCOME. THE HON'BLE HIGH COURT NOTED THAT AFTER THE SUBSTI TUTION OF SECTION 10B OF THE ACT BY THE FINANCE ACT OF 2000, THE PROVISIONS PROVIDED FOR DEDUCTION OF SUCH PROFIT OR GAINS AS WERE DERIVED BY 100% EOU FOR THE PERIOD PRESCRIBED UNDER THAT SECTION. THE HON'BLE HIGH COURT THUS HELD THAT THE BASIS ON WHICH T HE ASSESSMENT WAS SOUGHT TO BE REOPENED WAS BELIED BY A PLAIN READING OF THE PROVISIONS AND THE ASSESSING OFFICER WAS IN ERROR IN PROCEEDING ON THE BASIS THAT BECAUSE THE INCOME WAS EXEMPTED, THE LOSS WAS NOT ALLOWABLE. THE HON'BLE HIGH COURT FURTHER CONS IDERED THAT ALL THE FOUR UNITS OF THE ASSESSEE WERE ELIGIBLE UNDER SECTION 10B, OUT OF WHICH THREE UNITS HAD RETURNED PROFITS DURING THE COURSE OF THE ASSESSMENT YEAR, WHILE THE CRAB STICK UNIT HAD RETURNED A LOSS. THE HIGH COURT FURTHER HELD THAT THE AS SESSEE WAS ENTITLED TO A DEDUCTION IN RESPECT OF THE PROFITS OF THE THREE ELIGIBLE UNITS WHILE THE LOSS SUSTAINED BY THE FOURTH UNIT COULD BE SET OFF AGAINST THE NORMAL THE LOSS SUSTAINED BY THE FOURTH UNIT COULD BE SET OFF AGAINST THE NORMAL BUSINESS INCOME. IN THESE CIRCUMSTANCES, THE HON'BLE HIGH COURT HELD THAT THE BASIS O N WHICH THE ASSESSMENT WAS SOUGHT TO BE REOPENED WAS CONTRARY TO THE PLAIN LANGUAGE OF SECTION 10B. 15. THE HON'BLE BOMBAY HIGH COURT IN CIT VS. BLACK & VEATCH CONSULTING PVT. LTD. (SUPRA) ALSO OBSERVED THAT SECTION 10A WAS A PROVISION WHICH WAS IN THE NATURE OF A DEDUCTION AND NOT AN EXEMPTION. THE HON'BLE HIGH COURT FURTHER HELD THAT THE DEDUCTION UNDER SECTION 10A, IN OUR VIEW, WAS TO BE GIVEN EFFECT TO AT THE STAGE OF COMPUTING THE PROFITS AND GAINS OF BUSINESS. THIS IS ANTERIOR TO THE APP LICATION OF THE PROVISIONS OF SECTION 72 WHICH DEALS WITH THE CARRY FORWARD AND SET OFF OF BUSINESS LOSSES. THE HON'BLE HIGH COURT HELD THAT THE DEDUCTION UNDER SECTION 10A HAS TO BE GIVEN AT THE STAGE WHEN THE PROFITS AND GAINS OF BUSINESS ARE COMPUTED I N THE FIRST INSTANCE. THE ISSUE BEFORE THE HON'BLE HIGH COURT WAS WITH REGARD TO THE ADJUSTMENT OF BROUGHT FORWARD UNABSORBED DEPRECIATION AND LOSS OF THE UNIT, WHICH WERE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT AND IT WAS HELD THAT THE SA ME COULD NOT BE SET OFF AGAINST THE CURRENT PROFIT OF THE ELIGIBLE UNITS WHILE COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE ACT. 16. THE CASE OF THE REVENUE BEFORE US ON THE OTHER HAND IS THAT RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN SYNCO IN DUSTRIES LTD. VS. ASSESSING OFFICER, INCOME TAX, MUMBAI (SUPRA) IS TO BE APPLIED WHILE COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE ACT. IN THE FACTS OF THE CASE BEFORE HON'BLE SUPREME COURT THE ASSESSEE HAD CLAIMED DEDUCTION FROM THE PROFITS AND GAIN S OF THE BUSINESS UNDER SECTION 80HH R.W.S. 80 - I AND 80B OF THE ACT. THE HON'BLE SUPREME COURT HELD THAT WHILE WORKING OUT GROSS TOTAL INCOME OF THE ASSESSEE, ITA NO. 135 6 /PN/20 1 4 AESSEAL INDIA PVT. LTD. 6 LOSSES SUFFERED BY IT IN EARLIER YEARS HAVE TO BE ADJUSTED AND IF GROSS TOTAL INCOME OF ASSESSEE IS NIL THEN THE ASSESSEE WOULD NOT BE ENTITLED TO DEDUCTION UNDER CHAPTER VI - A. 17. THE AUTHORITIES BELOW HAVE FURTHER PLACED RELIANCE ON THE PROVISIONS OF SECTION 70(1) FOR THE PROPOSITION OF SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME. THE PROVISIONS OF SECTION 10A AND 10B OF THE ACT ARE PARA MATERIA. IN SUCH A SITUATION THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN HINDUSTAN UNILEVER LTD. VS. DCIT & ANR. (SUPRA) ARE TO BE APPLIED. THE HON'BLE HIGH COURT HAD HELD THAT WHERE THREE UNITS OF THE ASSESSEE HAD RETURNED PROFIT DURING THE COURSE OF ASSESSMENT YEAR AND ONE UNIT HAD RETURNED THE LOSS, THE ASSESSEE WAS ENTITLED TO DEDUCTION IN RESPECT OF THE PROFITS OF THREE ELIGIBLE UNITS, WHILE THE LOSS SUSTAINED BY THE FOURTH UNIT COULD BE SET OFF AGAINST NORMAL BUSINESS INCOME. APPLYING THE SAID RATIO TO THE FACTS OF THE PRESENT CASE WE ARE OF THE VIEW THAT THE DEDUCTION U/S. 10A AND 10B ARE UNITS SPECIFIC IN CONTRADICTION TO BE ASSESSEE SPECI FIC. THE ASSESSEE WHILE CLAIMING THE DEDUCTION U/S. 10A OF THE ACT IN RESPECT OF EACH OF ITS UNIT HAS TO SATISFY THE CONDITIONS VIZ - A - VIZ EACH UNIT/UNDERTAKING. EVEN THE QUANTIFICATION OF AMOUNT OF DEDUCTION HAS TO BE WORKED OUT INDEPENDENTLY IN EACH UNI T. THE ASSESSEE BEFORE US HAS FURNISHED ON RECORD THE AUDIT REPORT IN FORM NO. 56F IN RESPECT OF EACH OF THE UNIT AGAINST WHICH IT HAS CLAIMED THE DEDUCTION UNDER SECTION 10A OF THE ACT. THE QUANTIFICATION OF THE DEDUCTION UNDER SECTION 10A OF THE ACT IS TO BE WORKED OUT INDEPENDENTLY FOR EACH ELIGIBLE UNIT AND IN CASE AFTER THE DEDUCTION SO CLAIMED UNDER SECTION 10A OF THE ACT, THERE ARE PROFITS IN THE HANDS OF THE ASSESSEE FOR SUCH UNIT THEN THE SAME CAN BE SET OFF AGAINST THE LOSSES, IF ANY, INCURRED B Y THE ASSESSEE IN ANY OTHER UNIT. THERE IS NO MERIT IN FIRST AGGREGATING THE PROFITS OF EACH OF THE ELIGIBLE UNIT AND SETTING OF THE LOSSES OF OTHER UNITS AND ON THE NET PROFITS, IF ANY, THE DEDUCTION UNDER SECTION 10A OF THE ACT TO BE COMPUTED. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN CIT VS. BLACK & VEATCH CONSULTING PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD THAT THE DEDUCTION UNDER SECTION 10A OF THE ACT HAS TO BE GIVEN AT THE STAGE WHEN THE DEDUCTION UNDER SECTION 10A OF THE ACT HAS TO BE GIVEN AT THE STAGE WHEN THE PROFITS AND GAINS OF THE BUSINESS ARE COMPUTED IN THE FIRST INSTANCE. IN VIEW THEREOF WE REVERSE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD. 18. NOW COMING TO THE RELIANCE PLACED BY THE LD. DR FOR THE REVENUE OF THE HON'BLE SUPREME COURT IN SYNCO INDUSTR IES LTD. VS. ASSESSING OFFICER, INCOME TAX, MUMBAI (SUPRA) WHEREIN THE HON'BLE SUPREME COURT HAD CONSIDERED THE PROVISIONS OF SECTION 80HH R.W.S. 80 - I AND 80B OF THE ACT. IN VIEW OF THE SPECIFIC PROVISIONS OF 80B(5) PROVIDED UNDER CHAPTER VIA THEN THE DED UCTION UNDER SECTION 80HH HAS TO BE COMPUTED IN LINE THEREOF. HOWEVER IN THE ABSENCE OF ANY SUCH PROVISION BEING PROVIDED IN SECTION 10A OF THE ACT, WE FIND NO MERIT IN THE SAID RELIANCE PLACED UPON BY THE LD. DR FOR THE REVENUE. SECTION 10A OF THE ACT EN TITLED THE UNDERTAKINGS FOR DEDUCTION FROM ITS PROFITS IN CASE THE CONDITIONS ARE FULFILLED. WE REITERATE THAT THE SAID DEDUCTION UNDER SECTION 10A OF THE ACT IS TO BE COMPUTED UNIT/UNDERTAKING WISE AND NOT FOR THE ASSESSEE IN TOTALITY. REVERSING THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS), WE ALLOW THE GROUNDS OF APPEAL NO. 3 RAISED BY THE ASSESSEE IN BOTH THE ASSESSM ENT YEARS 2005 - 06 AND 2006 - 07. 9. THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE BEFORE THE TRIBUNAL IN M/S. KPIT CUMMIN S INFOSYSTEMS LTD. VS. DCIT (SUPRA) AND FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM THE DEDUCTION ITA NO. 135 6 /PN/20 1 4 AESSEAL INDIA PVT. LTD. 7 UNDER SECTION 10A OF THE ACT IN RESPECT OF ITS STPI UNIT AND THE LOSSES FROM NON - STPI UNITS ARE TO BE CARRIED FORWA RD TO THE SUCCEEDING YEARS. REVERSING THE ORDER OF CIT(A), WE ALLOW THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 5 TH DAY OF MAY , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 5 TH MAY , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLA NT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I , PUNE ; 3. ( ) / THE CIT (A) - I , PUNE ; 4. / THE CIT - I , PUNE ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE