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2016 (11) TMI 725 - HC - Income TaxClaim for deduction under Section 80 IA - whether ITAT was right in directing AO to compute the deduction u/s 80 IA by following the method in section 80 HHC (3) for working out profit/loss from trading goods? - AO came to the conclusion that the profit earned by the assessee's eligible unit was not only on account of its manufacturing activities but also from its trading activities - Held that:- The assessee admittedly carries on trading as well as manufacturing and export activities. Admittedly, the manufacturing activity is an eligible activity under Section 80 IA. The assessee is, therefore, entitled to the benefit of deduction under Section 80 IA. Finding of the CIT(A) is that the AO having accepted, on the basis of the assessee's books of account, that there was a loss in respect of the trading activities while dealing with the case under Section 80 HHC could not come to a contrary conclusion while dealing with the claim under Section 80 IA. The loss in the trading activities is still a loss. We are unable to hold that this finding which is essentially one of fact is perverse or absurd The Tribunal has upheld the findings of the CIT(A) on the same basis. Having done so, the Tribunal rightly remanded the issue to the AO to recalculate the deductions under Section 80 IA.
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