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2016 (11) TMI 1020 - HC - Income TaxReopening of assessment - Deduction under Section 32AB allowable with reference to the profits of the business as a whole and not in respect of the profit of any particular unit - assessee is a family trust - ITAT considering the profits of the business of the assessee as a whole and not in respect of the profit of Patel Detergents (Manufacturing Division) Held that:- Considering the provisions of Section 32AB prevailing at the relevant time, assessee is entitled to the deduction under Section 32AB of the Act equal to 20% of the profit from `eligible business or profession'. Therefore, it cannot be disputed that the profits of Patel Detergents (Manufacturing Division) can be said to be profits of `eligible business'. On and after the amendment in Section 32AB of the Act and after deletion of the word `eligible', for the purpose of computation of the deduction under Section 32AB of the Act, the profits of the business of the assessee as a whole is required to be considered. Under the circumstances, considering the provisions of Section 32AB of the Act prevailing for the year under consideration i.e. Assessment Year 1988-89 the assessee shall be entitled to the deduction under Section 32AB of the Act equal to 20% of the profits of Patel Detergents (Manufacturing Division) being the profits of `eligible business', and therefore, the Tribunal has committed a grave error in holding that the deduction under Section 32AB of the Act is allowable with reference to the profit of the business as a whole and not in respect of the profit of any particular unit. The present appeal succeeds and is allowed. The impugned judgment and order passed by the learned ITAT confirming the calculation made by the Assessing Officer confirmed by the learned CIT(A) with respect to the deduction under Section 32AB of the Act by holding that the deduction under Section 32AB of the Act is allowable with reference to the profit of the business as a whole and not in respect of profit of any particular unit is hereby quashed and set aside and it is held that the assessee shall be entitled to the deduction under Section 32AB of the Act with reference to the profits of Patel Detergents (Manufacturing Division) as claimed and granted by the Assessing Officer while passing the original order of assessment. - Decided in favour of assessee
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