Section 80IA deduction for each eligible unit must be computed independently, with eligible business treated as the only source of income.

Deduction under section 80IA was to be computed by treating the eligible business as the only source of income for quantification, and each eligible power-generating unit had to be considered independently as a separate and distinct unit. The court applied the earlier binding Division Bench ruling involving the same assessee and statutory setting, and distinguished computation of deduction from computation of gross total income. On that basis, the Revenue's objection that the deduction had to be confined differently was rejected, and the assessee's claim to section 80IA deduction was upheld.

---

---

Issues: Whether the assessee was entitled to deduction under section 80IA of the Income-tax Act, 1961 in respect of the eligible power-generating unit, notwithstanding the existence of other industrial units and the Revenue's contention that the deduction had to be confined differently.

Analysis: The appeal was decided by following the earlier binding Division Bench ruling on the same assessee and the same statutory setting. The applicable principle was that, for computing deduction under section 80IA, the eligible business is to be treated as the only source of income for the purpose of quantification, and each eligible unit has to be considered independently as a separate and distinct unit. The reasoning also recognised the distinction between computation of the quantum of deduction and the computation of gross total income, and applied the settled view that the claim could not be denied on the basis urged by the Revenue.

Conclusion: The question of law was answered against the Revenue and in favour of the assessee. The assessee was held entitled to the deduction under section 80IA.

---