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2005 (11) TMI 176 - AT - Income TaxClaimed inter-head set off of business loss against income from other sources as permissible u/s. 71 - exemption u/s 10B - HELD THAT:- Admittedly, in this case, there was loss in the unit eligible for deduction u/s. 10B. The business income of such unit is computed at Rs. 13,40,575 whereas the loss itself is Rs. 4,26,73,854. Thus, the business income can be computed only after set off of business loss against the business income in the same year as per provisions of s. 70 of the Act. Similarly, after setting off of the business loss against the business income, there is still a loss and such loss has to be set off against income from other sources in the same year as per the provisions of s. 71 of the Act. The decision of the Tribunal in the case of Navin Bharat Industries Ltd.[2004 (3) TMI 318 - ITAT BOMBAY-E] also supports our view that the income of unit eligible for deduction u/s 10B is merely a deduction from income and not exemption. Accordingly, the assessee is eligible to set off the loss of such unit under ss. 70 and 71 of the Act. The AO is accordingly directed to set off the loss and compute the income. In the result, the appeal is allowed.
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