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2021 (1) TMI 878 - AT - Income TaxDisallowance of the carry forward of loss pertaining to the demerged unit - restricting the losses at 84.5% on account of assets being retained by assessee i.e. proportionate allowance of losses by invoking the provisions of section 72A(4)(b) - HELD THAT:- The entire loss set off of by assessee pertains only to the Sinner Unit of EEPL that was demerged with the assessee. The effective date of demerger is 01.4.2013 by the order of Hon’ble High Court dated 01.08.2014. Accordingly, the expenses continued to be incurred by EEPL towards Sinner Unit after 31.03.2013 - since these expenses were not to be taken over by assessee, the same were charged to the continuing company and accordingly the Investment Division of EEPL incurred these expenses. Since these expenses do not pertain to the Investment Division in the computation of income of EEPL, the same has not been claimed as deduction. This fact is explained by assessee’s counsel by drawing our attention to the computation of income filed in assessee’s Paper Book. Computation of income of EEPL for AY 2013- 14 states that it had earned taxable income of ₹ 14,18,473/- and therefore, the loss finally available for set off in the hands of the assessee is ₹ 1,81,26,485/-. Even year-wise details of losses including the final loss available for set of in the hands of assessee after reducing the income for AY 2013-14 is available in assessee’s Paper Book in the shape of computation of income. Accordingly, we are of the view that the losses finally available to assessee of ₹ 1,81,26,485/- pertains only to Sinner Unit and not for EEPL Investment Division. Hence, we are of the view that the assessee is entitled for carry forward of the entire loss and we allowed the same. - Decided in favour of assessee.
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