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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 ..... s - Decided against revenue - ITA No. 6621/DEL/2013 - - - Dated:- 8-12-2015 - Shri J. S. Reddy, Accountant Member And Shri Chandramohan Garg, Judicial Member For the Appellant : Shri Ashis Mohanty, Sr. DR For the Respondent : Shri P.K. Jain, CA ORDER Per C. M. Garg, J.M. This appeal of the revenue for assessment year 2009-10 has been preferred against the order of CIT(A)-XVI, dated 09.09.2013 passed in first appeal No. 351/11-12 for Assessment Year 2009-10. 2. The grounds raised by the Revenue read as follows:- 1. On the facts in the circumstances of the case, the Ld. CIT(A) has erred in allowing in the appeal of the assessee directing the Assessing Officer to consider the profits gains of Roorkee Unit only for allowing deduction u/s 80IC of the Act and also to determine the losses of NOIDA Unit to be carried forward. 1.2 On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deciding the issue following the judgment of Hon ble High Court, Delhi without appreciating the fact that the said judgment has been overruled by the decision of the Apex Court vide Civil Appeal No. 4192-4193 of 2002 dated 13.03.2008 M/s S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that there is a decision of a Division Bench of this court in the case of Commissioner of Income-tax v. Dewan Kraft Systems P. Ltd: 297 ITR 305 (Delhi) which has considered the pari materia provisions of Section 80-IA(7) of the said Act and has held against the revenue. The learned counsel submits that though the decision of the Delhi High Court is against him, the latter decision of the Supreme Court in the case of Synco Industries Ltd. (supra) is clearly in his favour and, therefore, the question ought to be answered in favour of the revenue and against the assessee. 6. On the other hand, the learned counsel appearing on behalf of the assessee, submitted that the decision of this court in C.I.T. v. Dewan Kraft Systems (supra) is clearly in favour of the assessee and there is nothing in the Supreme Court decision in Synco Industries Ltd. (supra) which would enable us to detract from that position. Consequently, he submitted that the question be answered in favour of the assessee and against the revenue. 7. Section 80-I(1) reads as under:- 80-I. Deduction in respect of profits and gains from industrial undertakings after a certain date, etc. - (1) Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted after making all other adjustments of losses and carry forward losses ignoring the deductions available under Chapter VI-A. There is no dispute with this proposition. 8. It is further clear from a plain reading of the aforesaid provisions that the deduction under Section 80-I is to be made in case the gross total income includes any profits and gains derived from an industrial undertaking, etc.., in case such profits and gains are included in the gross total income of the assessee. The deduction in the case of a company, in view of the proviso to Section 80-I (1), is to be given to the extent of 25% of such profits and gains of such an industrial undertaking. It is also clear that in view of Section 80-I (6), which begins with a non-obstante clause, the quantum of deduction is to be computed as if the industrial undertaking were the only source of income of the assessee during the relevant years. In other words, each industrial undertaking or unit is to be treated separately and independently. It is only those industrial undertakings, which have a profit or gain, which would be considered for computing the deduction. The loss making industrial undertaking would not come ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of allowing deductions under Chapter VI-A would arise, but not otherwise. While doing so, the Supreme Court further made it clear that the gross total income must be determined by setting off business losses of earlier years before allowing deduction under Chapter VI-A and that if the resultant income is Nil , then the assessee cannot claim any deduction under Chapter VI-A. While coming to the aforesaid conclusion, the Supreme Court was also confronted with an argument which had been raised on the basis of the provisions of Section 80-I(6) that the profits of one industrial undertaking cannot be set off against the losses suffered by the other industrial undertaking. The Supreme Court was of the view that the provisions of Section 80-I (6) were only for the purposes of computing the quantum of deduction, whereas the gross total income was to be computed in terms of the Act as provided in Section 80-B(5). It is apparent that the Supreme Court distinguished the provisions of Section 80-I(6) which was for the purposes of computing the quantum of deduction from the provisions of Section 80-I (1) and Section 80-B(5) which deal with the manner in which the gross total income i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, emerging from the above discussion is that the gross total income of the assessee has first got to be determined after adjusting losses, etc., and if the gross total income of the assessee is nil the assessee would not be entitled to deductions under Chapter VI-A of the Act. (underlining added) 11. From the above extract, it is apparent that the Supreme Court did not at all hold that while computing the deduction under Section 80-I(6), the loss of one eligible industrial undertaking is to be set off against the profit of another eligible industrial undertaking. All that the Supreme Court said was that in computing the gross total income of the assessee, the same has to be determined after adjusting the losses and that, if the gross total income of the assessee so determined turns out to be Nil‟, then the assessee would not be entitled to deduction under Chapter VI-A of the said Act. 12. We agree with the submissions made by the learned counsel for the assessee that there is nothing in the decision in the case of Synco Industries Ltd (supra) which would enable us to detract from the position indicated by this court in Dewan Kraft Systems (supra) and, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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