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TMI Blog2025 (1) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the losses from other eligible undertakings. Also in the case of CIT vs. Dewan Craft Systems Pvt. Ltd. [ 2007 (2) TMI 149 - DELHI HIGH COURT] held in view of overriding provisions of sub-s. (7) of s. 80-IA, deduction u/s 80-IA cannot be restricted by adjusting the profits of the eligible unit against the losses of other units of the assessee. Thus, we direct the AO to allow deduction u/s 80IC @ 30% on the profit of eligible unit without any set off. - Shri Narendra Kumar Billaiya, Hon ble Accountant Member And Sunil Kumar Singh, Hon ble Judicial Member For the Assessee : Shri Deepak Tikekar, C.A. Shri Ashish Thakurdesai, C.A., A/Rs For the Revenue : Shri Bhangepatil Pushkaraj Ramesh, Sr. D/R ORDER PER NARENDRA KUMAR BILLAIYA, AM: This appeal by the assessee is preferred against the order dated 04/07/2024 by the NFAC, Delhi, [hereinafter the ld. CIT(A) ], pertaining to AY 2017-18. 2. The grievance of the assessee reads as under:- 1. On facts, in circumstances of the case and in law, the learned CIT-A erred in confirming reworking of deduction u/s 80-IC at Rs. 2,38,28,650/- by the assessing officer, ignoring the consistent basis followed by the appellant in the past and accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in the past. Hence there is no reason to deviate from this rational basis in the current year even assuming it suits revenue in one year/E TAX DEPAR Kind attention of learned A.O. is drawn to decision of Hon'ble Delhi High Court reported in C/Tvs. EHPT India (P) Ltd. (2013) 350 ITR 41 in which it was held that Where the AO has accepted the head-count method adopted by the assessee for allocation of indirect expenses between STP unit and non-STP unit in the past but has rejected it only for the years under appeal, it would disturb or distort the profits; method adopted by the assessee has been consistently accepted by the Departmental authorities and there being no just cause for abandoning the same it could not be disturbed . The ratio of decision in this case that method of allocation of expenses consistently followed by the assessee and accepted by the department in past should not be disturbed, applies to the facts of the case of the assessee squarely. In Principal CIT v Quest Investment Advisors Pvt Ltd (2018) 304 CTR 0637 (Bom) Hon'ble Bombay High Court has held that If Revenue Authorities consistently over for 10 years and in subsequent 4 years accepted the prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing the deduction u/s 80IC of the Act. The Co-ordinate Bench in the case of Milestone Gears Private Limited vs. The ACIT in ITA Nos. 883 to 885/Chd/2017, had considered such issue and held as under:- 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 of section 80AB of the Act which was absent in the case of section 80HHC, as noted by the Hon ble Apex Court in the case of IPCA Laboratories Ltd. (supra). Therefore, the proposition laid down by the Hon ble Jurisdictional High Court in the case of Him Teknoforge Ltd. (supra) that the profits and losses of the priority units are to be clubbed for calculating eligible deduction under Chapter VI A having been borrowed from the law laid down by the Hon ble Apex Court in the case of IPCA Laboratories Ltd. (supra), which is clearly distinguishable from the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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, right from Padmasundara Rao vs State of TN 255 ITR 147(SC), Mohammad Vs CWT 224 ITR 672(SC) Pandian Chemicals Ltd. vs CIT 262 ITR 278(SC).In view of the same since the words used in section 80IC categorically state that the provisions of sub section 5 to section 80IA shall apply to the eligible undertaking or enterprise, they have to be read as such and applied to each undertaking, meaning thereby that the profits of each eligible undertaking has to be treated as if it were the only source of income of the assessee. 21. Further as rightly pointed out by the Ld. counsel for assessee that if the interpretation given in the case of Him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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