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TMI Blog2008 (11) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. That the learned CIT(A) ought to have appreciated the facts that as per the provision of sec.10B, deduction has to be allowed from the 'total income' as per the amendment to sec.10B w.e.f. 01.04.2001. 3. The assessee company is engaged in the business of manufacture of pharmaceutical products. The assessee company is a 100% EOU Unit. The assessee company claimed exemption u/s 10B of the IT Act, in respect of the export profits in the EOU Unit and also in respect of domestic profits thereon. The assessee claimed the set off the business losses incurred in the other units and the net loss of the other units were carried forward. The AO while concluding the assessment had given the set off of losses of other units again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case before it and those pertaining in the case of CIT vs. Himatasingake Seide Ltd., 286 ITR 255 (Kar.) and has held that the deduction u/s 10A be allowed without setting off brought forward and current year losses of non-10A Unit. The relevant portion of the decision is as follows; We have noticed from the language of the section 10A that a deduction of such profits and gains as are derived by an undertaking qualifying for exemption u/s 10A is to be given form to the total income. The legislature has used the profits and gains as are derived by an undertaking. The assessee may have more than one undertaking, and in that case, one has to consider the profits and gains of that undertaking which qualifies for deduction u/s 10A. Sim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 57. Similarly, the deduction u/s 10A is not to be restricted to the total income of the assessee computed before allowing deduction u/s 10A. The only interpretation, which is possible, in respect of 10A is that deduction of the unit qualifying for exemption is to be given to the extent of income computed in respect of that unit as per the provisions of the Act. It is an accepted principle of interpretation of that beneficent provision should be liberally construed . 4.1 As has been mentioned earlier, the facts of the appellant are similar to those pertaining in the cases before the Hon'ble ITAT cited above. Therefore, respectfully following the said decisions, the AO is directed to compute and allow the deduction u/s 10B in respe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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