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2016 (8) TMI 226 - GUJARAT HIGH COURTCalculation of deduction under Section 80IA - forfeiture of advance - income ‘derived from’ from the running of eligible industrial undertaking - Held that:- Advances were taken from the customers and on receipt of advance deposit, the assessee company commences manufacturing of such specific equipments for which expenditure in excess of the advance deposit received has to be incurred by the assessee company. In case, when the customer fails to take the delivery due to his inability to pay the balance price of equipment manufactured, the assessee company has already incurred huge expenditure for manufacturing such equipments which cannot be sold to any other customer for the reasons that the same has been manufactured as per specific requirement of the customer who has placed order. The assessee had to incur loss in this regard. If the expenses are not allowed, it will be contrary to well settled principles. He must get the deduction from the expenses for which he has received the advance. Further, the decisions which have been relied upon by learned advocate for the revenue will not apply in the facts of the present case since the amount which has been received by the assesse is for the same unit of which they have commenced manufacturing. Having heard learned advocates for the revenue and the question posed for consideration for us reproduced hereinabove and considering the decisions cited, the question which is raised in the present appeal is required to be answered in favour of the assessee.
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