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2015 (4) TMI 678 - KARNATAKA HIGH COURTDeduction u/s 80IA - Calculation of the profits from the eligible business - Deduction of losses set off against the profits from other business is to be taken into consideration as held by Tribunal - whether in view of provision of Section 80-IA(5) the profit from the eligible business for the purpose of deduction under Section 80-IB of the Act has to be computed after deduction of notional brought forward losses of eligible business even though they have been allowed to set off against other income in the earlier years as held by Tribunal? - Held that:- The non-obstante clause in sub-section (5) means it over-rides all the provisions of the Act and other provisions are to be ignored. In the absence of non obstante clause, what the judgment of the Madras Court in Velayudhaswamy Spinning Mills P. Ltd. [2010 (3) TMI 860 - Madras High Court] states is the legal position, because of the non obstante clause, the set off amount against other income of the assessee has to be ignored and because of the fiction created in the sub-section notionally, the set losses is to be treated as "losses being carried forward and after deducting the said losses, the profit prior to business is to be calculated. Eligible business were the only source of income, during the previous year relevant to initial assessment year and every subsequent assessment years. When the assessee exercises the option, the only losses of the years beginning from initial assessment year alone are to be brought forward and no losses of earlier years which were already set off against the income of the assessee. Looking forward to a period often years from the initial assessment is contemplated. It does not allow the Revenue to look backward and find out if there is any loss of earlier years and bring forward notionally even though the same were set off against other income of the assessee and the set off against the current income of the eligible business. Once the set off is taken place in earlier year against the other income of the assessee, the Revenue cannot rework the set off amount and bring it notionally - Decided in favour of revenue.
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