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2014 (3) TMI 808 - HC - Income TaxDeduction u/s 80IA of the Act – Set off of loss and depreciation - Whether the depreciation and losses of the eligible business can be set off against the profits earned by the eligible business for the period anterior to the claim for deduction put forth under Section 80IA – Held that:- An assessee is given the benefit of 100% deduction of the profits and gains from the eligible business - The quantum of deduction is to be calculated when the claim for deduction is made - For the purpose of determining the quantum of deduction u/s 80IA(5), the revenue cannot take into consideration the loss and depreciation which is already set off against the income of the assessee from other source and compute the profit u/s 80IA - the Assessing Authority and the Commissioner committed a serious error in setting off the profit earned by the assessee u/s 80IA against the losses and depreciation of the eligible business which is already set off from other source before such a claim is put forth - thus, there is no error committed by the Tribunal in setting aside the order passed by the Assessing Authority as well as the lower Appellate Authority. Both the Assessing Authority and the Appellate Authority proceeded on the basis that the initial claim for deduction is made in the assessment year 2006-07 - the assessee contends that the claim for deduction was put forth for the first time in the Assessment Year 2008-09 and therefore, it is his specific contention that loss and depreciation incurred by the eligible business was set off against the income of the assessee from other source - for the first time, when the claim was put forth for the Assessment Year 2008-09, the Assessing Authority was not justified in setting off the profit from eligible business against the loss and depreciation which had already been set off against the income of the assessee - this aspect has not been carefully looked into by either of the Authorities and the finding to be recorded is based on the finding of fact – thus, the matter remitted back to the Assessing Authority to consider the claim of exemption u/s 80IA of the Act – Decided in favour of Revenue.
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