2018 (4) TMI 199 - SCH - Income Tax

Deduction u/s 80IB - Held that - SLP dismissed. HC order confined 2017 (7) TMI 498 - MADRAS HIGH COURT HC has held the mere fact that nut blanks were purchased from Unit I cannot be a reason to deny deduction under Section 80IB, vis-a-vis Unit II. The deduction is made available to the Assessee, vis-a-vis Unit II, as it fits the attributes of an industrial undertaking and not to the Assessee per se. As long as the Assessee has invested a substantial amount in setting up an industrial undertaking, which is separate and distinct, it is entitled to claim the said deduction. CIT(A)s as well as the Tribunal were wrong in concluding that the Assessee could not claim deduction under Section 80IB of the 1961 Act vis-a-vis Unit II. For Computation made in respect of deduction claimed by the Assessee under Section 80IA in computing the deduction claimed by the Assessee under Section 80 IA of the 1961 Act, the Assessing Officer ought to have treated the two power divisions as a separate undertakings and furthermore, desisted from setting off the losses of earlier years against the profits of the Assessment Years in issue, by bringing them forward notionally, despite the fact that they had already been set off, as claimed by the Assessee in the earlier years.