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TMI Blog2019 (5) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... rg, Judicial Member And Smt. Annapurna Gupta, Accountant Member For the Assessee : Shri Parikshit Aggarwal, CA. For the Revenue : Smt.Chandrakanta, Sr. DR ORDER PER BENCH: All the above appeals have been preferred by the same assessee against the separate orders of the Commissioner of Income Tax (Appeals), Faridabad, (in short CIT(A) dated 2.11.2016, 2.11.2016 and 1.11.2016 pertaining to assessment years 2010-11, 2011-12 and 2012-13 respectively, passed u/s 250(6) of the Income Tax Act,1961 (hereinafter referred to as Act ) It was common ground that the issue involved in all the appeals was identical, therefore, these were all heard together and are being disposed off by this common, consolidated order for the sake of convenience. It was pointed out that the sole issue involved in all the appeals related to whether for the purpose of quantification of deduction u/s 80IC of the Act, the profits and losses of the eligible units were to be netted. 2. Drawing our attention to the facts of the case, it was pointed out that the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, on the other hand, was that the deduction was to be computed only on the profits and gains derived from industrial undertakings to which the benefit was granted and was not relatable to the gross total income of the assessee but only to the gross income from that particular industrial undertaking. On going through the order of the Hon'ble High Court in the case of Him Teknoforge Ltd. (supra), we find that the question of law before the Hon'ble Jurisdictional High Court was that whether deductions u/s 80HH/80IA of the Act were allowable on the profits of each unit separately. The Hon'ble High Court after considering the provisions of the Act and various judicial decisions in this regard, held that while calculating the deduction under Chapter VI-A, under which the deductions were allowed, only the profits of priority units, meaning thereby the eligible units, were to be taken into consideration. 14. The Hon ble High court analyzed the relevant provisions of chapter VI A ,specifically referring to section 80AB included therein and which dealt with deduction to be made with reference to income included in the gross total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd. (supra) and Induflex Products Pvt. Ltd. (supra), while dealing with the issue of deduction allowable u/s 80HHC, had held that section 80AB had a notwithstanding clause and thus had a overriding effect over all other sections in Chapter VIA, which included section 80HHC also. The Hon ble apex court noted in the said decision that section 80HHC did not provide that its provision would prevail over section 80AB or any provisions of the Act. Thus the Hon'ble Apex Court held that the section 80HHC would be ignored by 80AB and, therefore, as per section 80AB of the Act the amount of income eligible for deduction would have to be computed in accordance with the provisions of the Act which meant that the profits and losses of units would have to be set off against each other, since the section providing for set off of losses preceded the Chapter VI-A dealing with deduction under the Act. Following this proposition laid down by the Hon'ble Apex Court in the case of IPCA Laboratories Ltd. (supra) the Hon'ble High Court held that the Hon'ble Apex Court had clearly laid down the law in this regard that section 80AB would prevail over the other sections ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de. 80-IC [Special provisions in respect of certain undertakings or enterprises in certain special category States (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), 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, as specified in sub-section (3). 7) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section. 17. As per section 80IC(7), the provisions of section 80IA(5) have been made applicable to the undertaking or enterprises eligible for deduction u/s 80IC of the Act. And, section 80IA(5) begins with a notwithstanding clause . Thus when provisions of section 80IC are read alongwith the provisions of section 80AB of the Act, we find that section 80IC of the Act clearly provides that its provisions are to prevail over the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r hand, section 80IC(7) states that the provisions of section 80IA(5) would apply to eligible undertaking or enterprises meaning thereby that the word business used in section 80IA(5) is to be substituted with eligible undertaking. Therefore, for the purpose of section 80IC(7), we agree with the Ld. counsel for assessee, it is the profits of each eligible undertaking which are to be treated and taken separately as being the only source of the income during the impugned year and allowed deduction thereof as opposed to treating the eligible business of all eligible undertakings u/s 80IA(5) of the Act as being the only source of income for the impugned years as stipulated u/s 80IA(5) of the Act. 20. The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself. Every word of a statute has to be assumed to have been deliberately and consciously incorporated therein by the legislature and if the language of a statute is clear and explicit, effect must be given to each word. The Hon ble Apex court has time and again reinforced this rule of interpretation of statutes in its judgements, rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no netting of profits and losses of the eligible units was to be done for the purpose of calculating the deduction u/s 80iC of the Act and each unit for the said purpose had to be treated separately. It was pointed out that the I.T.A.T. had considered the judgment of the Hon'ble Jurisdictional High Court in the case of M/s Him Teknoforge Ltd. (supra) and distinguished the same. It was further pointed out that following the said decision the I. T.A.T. had allowed the assessee s appeals on identical issue in the case of Globe Precision Industries Pvt. Ltd. in I TA No.871 of 2017 dated 8.1.2019 and again in the case of M/s Him Teknoforge Ltd. in I TA Nos.1674 1675/2017 dated 13.3.2019. Copies of the orders were placed before us. 5. The Ld. DR fairly conceded that the issue involved in the impugned appeals had been adjudicated in favour of the assessee by the I. T.A.T. in the aforesaid cases, though she has heavily relied upon the judgment of the Hon'ble Jurisdictional High Court in the case of M/s Him Teknoforge Ltd. (supra). 6. We have heard both the parties. In view of the admitted fact that identical issue already stands ..... X X X X Extracts X X X X X X X X Extracts X X X X
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