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2017 (1) TMI 1326 - AT - Income TaxEligibility to deduction u/s 80IC - Held that:- We find that the CIT (A) had called for a remand report and on the basis of the remand report has accepted that the assessee has filed the original return of income on 30.09.2011 and thereafter the return filed on 30.03.2011 is the revised the return of income and hence the assessee has satisfied the condition for claiming deduction u/s 80IC. Therefore, we do not see any reason to interfere with the findings of the CIT (A) on this issue. As regards the computation of deduction u/s 80IC we find that the assessee has accepted that the profit attributable to smaller components of the sale kit is not eligible for deduction u/s 80IC of the Act and has worked out the disallowance at ₹ 80.00 lakhs and accordingly apportioned it amongst the three eligible units. The Revenue is challenging the said allocation on the ground that the AO has not been given an opportunity to verify the said allocation. We find that during the assessment proceedings itself, the assessee had given the computation, but the AO has not gone into the said computation and the allocation on the ground that the assessee is not eligible for deduction u/s 80IC as it has filed the return after the stipulated time u/s 139(1). Therefore, we remit the issue of computation of allocation of both the common expenditure and also the profit attributable to the smaller components of the eligible unit to the AO for verification and allowance thereafter in accordance with law. Whether the losses of the earlier years which has already been set off against the other incomes can be notionally brought forward and set off from the income of the eligible unit before allowing the deduction u/s 80IA is covered in favour of the assessee by the decision of the Hon'ble Madras High Court in the case of Velayudhaswamy Spinning Mills Private Limited vs. ACIT, reported in [2010 (3) TMI 860 - Madras High Court ]
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