Standalone computation of section 80IC deduction barred netting losses of one eligible unit against profits of another.

For deduction under section 80IC, each eligible undertaking had to be computed on a standalone basis as if it were the only source of income. The Tribunal held that section 80IC, read with section 80IC(7) and section 80IA(5), did not permit clubbing profits and losses of different eligible units, and distinguished the Revenue's reliance on section 80IA authorities because the statutory language differed materially. Losses of one eligible unit could not be set off against profits of another eligible unit for calculating the deduction.

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Issues: Whether, for the purpose of deduction under section 80IC, the profits and losses of multiple eligible units were required to be netted or whether each eligible unit had to be treated separately on a standalone basis.

Analysis: The deduction under section 80IC, read with section 80IC(7) and section 80IA(5), was held to require computation of the eligible undertaking's profits as if that undertaking were the only source of income. The Tribunal distinguished the decision relied upon by the Revenue, noting that the statutory language of section 80IC differed materially from section 80IA and did not support clubbing the profits and losses of different eligible undertakings. On that construction, losses of one eligible unit could not be adjusted against profits of another eligible unit for quantifying the deduction.

Conclusion: The assessee was entitled to deduction under section 80IC on the profits earned from the eligible units without setting off the losses of other eligible units.

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