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TMI Blog2015 (12) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the decision of the Apex Court vide Civil Appeal No. 4192-4193 of 2002 dated 13.03.2008 M/s Synco Industries Vs AO." 3. We have heard arguments of both the sides and carefully perused the relevant material placed on record before us. Ld. DR supporting the stand and action of the Assessing Officer submitted that deduction u/s 80IC of the Income Tax Act, 1961 can only be allowed after arriving at the gross total income by combining the income of both the units i.e. Noida unit and Roorkee unit and excess deduction claimed by the assessee was rightly denied to him. 4. Learned counsel of the assessee strongly supported the impugned order and submitted that the CIT(A) after properly considering the ratio laid down by Hon'ble High Court of Delhi in the case of CIT vs Sona Koyo Steering Systems Ltd. order dated 10.2.2010 in I.T.A. No. 1279/2008 and other connected appeals rightly allowed claim of the assessee. 5. On careful consideration of above, at the very outset, from the order of the Hon'ble High Court in the case of CIT vs Sona Koyo (supra) it is amply clear that after considering and referring to the propositions laid down by Hon'ble Apex Court in the case of Sync ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from industrial undertakings after a certain date, etc. - (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof: Provided that in the case of an assessee, being a company, the provisions of this sub-section shall have effect in relation to profits and gains derived from an industrial undertaking or a ship or the business of a hotel as if for the words "twenty per cent", the words "twenty- five per cent" had been substituted." Section 80-I (6) reads as under:- "(6) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an industrial undertaking or a ship or the business of a hotel or the business of repairs to ocean-going vessels or other powered craft to which the provisions of sub-section (1) apply shall, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oss making industrial undertaking would not come into the picture at all. The plain reading of the provision suggests that the loss of one such industrial undertaking cannot be set off against the profit of another such industrial undertaking to arrive at a computation of the quantum of deduction that is to be allowed to the assessee under Section 80-I (1) of the said Act. 9. In this regard, we may refer to the decision of this court in the case of Dewan Kraft Systems (supra), which considered the pari materia provisions of Section 80-IA(7) of the said Act. In that case, the question arose with respect to computation of the deduction in relation to three units - the Kalamb Unit, the Delhi Unit and the Noida Unit. This court held that while computing the deduction under Section 80-IA of the said Act, the profits and gains of the Kalamb unit for the purposes of determining the quantum of deduction under Section 80-IA(5) was to be computed as if such eligible business of the said unit was the only source of income of the assessee. This court observed that the Assessing Officer had erroneously mixed the profits of the Delhi and Noida units and had thereby restricted the deduction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manner in which the gross total income is to be considered. The Supreme court observed as under:- "13. ...While computing the quantum of deduction under Section 80-I(6), the Assessing Officer, no doubt, has to treat the profits derived from an industrial undertaking as the only source of income in order to arrive at the deduction under Chapter VI-A. However, this court finds that the non obstante clause appearing in Section 80-I(6) of the Act, is applicable only to the quantum of deduction, whereas, the gross total income under Section 80B(5) which is also referred to in section 80-I(1) is required to be computed in the manner provided under the Act which presupposes that the gross total income shall be arrived at after adjusting the losses of the other division against the profits derived from an industrial undertaking. If the interpretation as suggested by the appellant is accepted it would almost render the provisions of 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, canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dewan Kraft Systems (supra) and, as indicated by us above. In fact, the Supreme Court clearly held that while computing the quantum of deduction under Section 80-I(6), the Assessing Officer, no doubt, has to treat the profits derived from an industrial undertaking as the only source of income of the assessee in order to arrive at a deduction under Chapter VI-A. The Supreme Court also held that under Section 80-I(6), for the purposes of calculating the deduction, the loss sustained in one of the units is not to 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. 13. The above discussion makes it absolutely clear that the Supreme Court decision sought to be relied upon by the learned counsel for the appellant / revenue, rather than deciding the issue in favour of the revenue, clinches the matter in favour of the assessee. In view of the foregoing discussion, the substantial question of law, referred to above, is decided in favour of the assessee and against the revenue." 6. From the impugned order, it is vivid that CIT(A), following the dicta laid down by Hon'ble High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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