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TMI Blog2012 (11) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... o all the Sections falling in Chapter VI-A. They impose a ceiling on the total amount of deduction and therefore the non-obstante clause in Section 80-I(6) cannot restrict the operation of Sections 80A(2) and 80B(5) which operate in different spheres. As observed earlier Section 80-I(6) deals with actual computation of deduction whereas Section 80- I(1) deals with the treatment to be given to such deductions in order to arrive at the total income of the assessee and therefore while interpreting Section 80-I(1), which also refers to gross total income as defined in Section 80B(5) - loss from the oil division was required to be adjusted before determining the gross total income and as the gross total income was 'Nil' the assessee was not ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed u/s 143(3) was erroneous and prejudicial to the interests of revenue and accordingly issued show cause notice to the assessee. After hearing the assessee s representative and considering the written submissions filed, for the reasons stated in the 263 order, he set aside the assessment order being erroneous and prejudicial to the interests of revenue and directed the AO to pass fresh order after considering the contents of the 263 order. 3. Aggrieved, the assessee is in appeal before us with the following effective grounds of appeal: 2. The learned CIT erred on facts and in law in exercising revisionary powers under section 263 of the Act without satisfying the twin conditions in relation to the assessment order (i.e.) being (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing officer. 4. At the time of hearing, learned counsel for the assessee placed on record paper book containing pages 1 to 16. He also placed on record the decision of this Tribunal dated 2-2-2012 in ITA No.292/Bang/2011 in the case of DCIT vs. M/s.VRL Logistics Ltd. and submitted that the point at issue on merits is totally covered by the said order in favour of the assessee and the direction given in 263 order cannot stand. 5. We have also heard learned Departmental Representative and considered the facts and materials on record. The Tribunal s order in the case of M/s.VRL Logistics Ltd. (supra) has dealt with the provisions of sec.80IA(5) of the Act and, as rightly contended by the learned counsel for the assessee, that would cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of exception, should be construed in a reasonable and purposive manner so as to advance the objects of the provision. It is a generally accepted principle that the deeming provision of a particular section cannot be breathed into another section. Therefore, the deeming provision contained in section 80IA(5) cannot override the section 70(1) of the Act. CIT(A) s observation on this regard that the specific provisions of section 80IA(5) have overriding effect is not acceptable. In the given case, the assessee incurs loss after claiming eligible depreciation. Hence section 80IA becomes insignificant, since there is no profit from which this deduction can be claimed. At this stage, section 70(1) comes to the rescue of the assessee, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contention that under Section 80-I (6) the profits derived from one industrial undertaking cannot be set off against loss suffered from another and the profit is required to be computed as if profit making industrial undertaking was the only source of income, has no merits. Section 80-I (1) lays down that where the gross total income of the assessee includes any profits derived from the priority undertaking/unit/division, then in computing the total income of the assessee, a deduction from such profits of an amount equal to 20% has to be made. Section 80-I (1) lays down the broad parameters indicating circumstances under which an assessee would be entitled to claim deduction. On the other hand Section 80-I (6) deals with determination of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 80A(2) of the Act nugatory and therefore the interpretation canvassed on behalf of the appellant cannot be accepted. It is true that under Section 80-I(6) for the purpose of calculating the deduction, the loss sustained in one of the units, cannot be taken into account because Sub-Section 6 contemplates that only the profits shall be taken into account as if it was the only source of income. However, Section 80A(2) and Section 80B (5) are declaratory in nature. They apply to all the Sections falling in Chapter VI-A. They impose a ceiling on the total amount of deduction and therefore the non-obstante clause in Section 80-I(6) cannot restrict the operation of Sections 80A(2) and 80B(5) which operate in different spheres. As observed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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