Case Law Details
Pragati Power Corporation Ltd Vs ACIT (ITAT Delhi)
ITAT Delhi held that eligible unit deduction u/s 80IA of the Income Tax Act has to be granted on gross basis treating that is the only undertaking with the assessee without set off losses of other industrial units of the assessee.
Facts- The matter involved in the present case is that according to assessee deduction u/s. 80IA has to be computed in respect of the profit of the eligible unit only in terms of section 80-IA(5) of the Act, which according to the assessee is Rs.203,36,83,278/-. But according to the section 80A(2), deduction under Chapter VIA has to be restricted to the extent of the gross total income. According to the assessee, the gross total income for the year under consideration, being Rs.187,58,66,703/-, the deduction u/s. 80-IA of the Act was accordingly restricted to Rs.187,58,66,703/- and net taxable income of nil was declared in the return of income.
But, according to the Revenue for computing eligible profit for deduction u/s. 80IA the Act, loss of non-eligible units should be first adjusted with the profit of the eligible unit and deduction should be allowed in respect of net profit under the head profit and gain of the business/profession of the assessee.
Thus, the dispute is whether any loss of non-eligible unit should be adjusted with the profit of the eligible unit for determining profit eligible for deduction under section 80IA of the Act.
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