S. 80-IA(5) – Absorbed losses pre ‘initial assessment year’ need not be set off

From a plain reading of the sub-section (5) of section 801A, it can be gathered that it is a non­ obstante clause which overrides the other provisions of the Act and it is for the purpose of determining the quantum of deduction under section 801A, for the assessment year immediate(y succeeding the initia( assessment year or any subsequent assessment year to be computed as if the eligible business is the only source of income. Thus, the fiction created is that the eligible business is the only source of income and the deduction would be allowed from the initial

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