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2005 (9) TMI 272 - AT - Income TaxDisallowed deduction u/s 80-I - Profits And Gains From Industrial Undertaking - setting off brought forward notionally unabsorbed losses and depreciation from earlier years - HELD THAT:- On a careful consideration of facts and circumstances of the case we are of the view that the issue is not debatable in nature. Because of non obstante clause contained in section 80-I(6) the provisions will have overriding effect over other provisions of the Act. Section 80-I(6) does enact a legal fiction providing that the profits and gains of new industrial undertaking shall be computed as if the new industrial undertaking were the only business of the assessee from the date of its establishment and the past years depreciation and losses are to be set off against the income of assessee from the undertaking. Therefore, the new industrial undertaking is retrospectively quarantined or isolated from the other income-producing activity for determining the profits and gains for the purpose of eligibility u/s 80-I. Hence, the order passed by the Assessing Officer giving effect to the order of CIT(A) allowing deduction u/s 80-I without setting off unabsorbed losses from assessment year 1991-92 against the income for assessment years 1992-93 and 1993-94 was erroneous as well as prejudicial to the interests of revenue. The ld. CIT was, therefore, justified in setting aside the assessment. In the result, the appeal of the assessee is dismissed.
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