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2011 (12) TMI 414 - AT - Income TaxSet off of loss of the undertaking eligible for deduction u/s 10A against profit of the undertaking eligible for deduction u/s 80HHE – AO stated that while two units were eligible for deduction u/s 10A, the assessee could not claim deduction u/s 10A in respect of its Hyderabad Unit since there was a taxable loss in it – appeal allowed by CIT(A) – Held that:- uphold the order of the CIT(A) by deciding this issue in favour of the assessee as relied upon the case CIT LTU vs. M/s. Yokogawa India Ltd. and others (2011 - TMI - 211353 - Karnataka High Court) stating that deduction under section 10A has to be excluded from the total income of the assessee the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise - against revenue. Deleting the addition being the provision for gratuity while determining the book profits u/s 115JB of the Act - CIT(A) allowed the assessee's claim by holding that the provision for gratuity could not be added back under the Explanation (1c) to sec.115JB while determining the book profits – revenue appeal – Held that:- no infirmity in the order of the CIT(A) who made the decision relying on Bharat Earth Movers vs. CIT (2000 - TMI - 5816 - SUPREME Court) case stating that if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date – against the revenue.
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