INCOME TAX ACT, 1961

Section 80-IA

Deduction under section 80-IA - Computation - AO set off losses of another units against profit of eligible unit -

Assessee claimed deduction under section 80-IA in respect of profit of eligible unit to the extent of gross total income available as per section 80A(2). AO held that while computing eligible profit for deduction under section 80-IA, loss of another units had to be adjusted with profit of eligible unit and deduction had to be allowed in respect of net profit under the head 'Profit and gain' of business/profession of its assessee. Held: For computing deduction under section 80-IA, profit of eligible units had only to be considered subject to upper limit of gross total income and loss of the other non-eligible unit could not be set off against profit of eligible unit. In the instant case, two/three undertakings had been mentioned as eligible, in certificate No. 10CCB. Therefore, matter was remanded back to AO to verify as to whether loss-making unit was also eligible for deduction under section 80-IA and if so, the claim of deduction under section 80-IA had to be computed for both eligible units.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2012-13

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