In Brief
The Supreme Court clarified the true meaning of Section 10A of the Income Tax Act, 1961 following amendments by the Finance Act 2000 and 2003. While Section 10A, as amended, provides for deductions (not exemptions) from income of eligible export-oriented undertakings, the critical holding is that such deductions must be computed at the stage of determining the undertaking's gross income under Chapter IV of the Act, not at the later stage of computing total income under Chapter VI. This prevents losses from other units being set off against Section 10A undertakings' profits before the deduction is applied. Each eligible unit is treated independently for purposes of the deduction, without reference to other units of the same assessee."
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