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2012 (3) TMI 193 - AT - Income TaxExemption u/s 10B - Set off of loss of EOU Unit brought forward against profit of the eligible business unit - held that:- Had the Legislature intended that the provisions of sections 70 & 71 should not be applied in respect of loss incurred in eligible business, it could have specifically provided so. According to us, the assessee is therefore entitled to set off the loss incurred in an eligible Industrial Unit against the other incomes earned by him (Sovika Info Tech Ltd.). In short, section 10B(6)(ii) restricts carry forward and set off of loss u/s. 72 and u/s. 74, but does not provide or restrict anything regarding intra-head set off u/s. 70 or inter-head set off u/s. 71. Admittedly, there was a loss in the Unit eligible for deduction u/s. 10B and there was a business income in an another Unit. Therefore, while computing the total income; the business income can be computed only after set off of business loss as per section 70 and if after such set off, still there is a business loss, such loss can be set off against other sources as per section 71 of the I.T. Act, though this is not the present case. Double benefit of adjustment - held that:- for the A.Y. 2008-09 it ought not to be a double disallowance because for A.Y. 2007-08, we have already directed to allow the set off of loss. Once the loss shall be adjusted in A.Y.2007-08, consequence our above decided appeal there should be a direct effect on the computation of income for A.Y. 2008-09. We therefore revert this matter back to the stage of the AO for re-computation of the eligible profit of the said Unit.
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