TaxTMI 
TaxTMI 
2012 (11) TMI 507
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.... Commercial generation of WM-I started in financial year 1997-98. WM-II started commercial generation in financial year 2002-03. Commercial generation of WM-III started in the financial year 2003-04. 3. The assessee filed its original return under section 139(1) of the IT Act, 1961 on 28-10-2004, returning taxable income of Rs. 4,05,47,015/- and with a tax liability of Rs. 1,59,06,0-89/- under section 115J of the Income Tax Act, 1961. In the computation of taxable income profit & loss of each unit was as follows; Aluminium extrusion Rs. 11,08,40,976 Wind Mill I (4.14 MW) Rs. 4,72,28,143 Wind Mill II (6.6 MW) (-) Rs. 2,51,53,887 (Unab.Depreciation) Wind Mill III (1.9 MW) (-) Rs. 4,35,88,634 (Unab.Depreciation) The assessee has been claiming deduction u/s 80IA of IT Act in respect of its WM-I Unit, since assessment year 2000-01. The same was allowed by the Assessing Officer. In the current assessment year also, the assessee claimed deduction u/s 80IA amounting to Rs. 4,72,28,143/- (being the 5th year of claim) in respect of the said unit and the same was allowed by the Assessing Officer in her order u/s 143(3) dated 29-12-2006. 4. On 16-12-2008 CIT....
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....d the issue is contentious. Even the High Courts have different views that the Supreme Court. For e.g. In the case of Meera Cotton, the Hon'ble Mumbai High Court had given a different decision distinguishing the facts of that case from Synco Case decided by Supreme Court. In this case, the ld. ITAT has held the case in favour of the assessee on the basis of its finding in the case of- M/s Karnataka Power Corporation Ltd v. CIT in ITA No. 294/Bang/2009 dated 10-07-2009 In that case, the assessee was having seven units, all generating power. In this case, the business is from two different sources viz. power sale and aluminium sale. Besides, in the case of M/s Karnataka Power Corpn. Ltd., (AY: 2007-08) In ITA No.140/AC-11(5)/A-1/10-11 dated: 09-08-2011 I have decided such issue of claim u/s 80IA against the appellant elaborating the reasons therein and I still hold on to that and therefore, following the same reasoning, it is also held against the appellant. In fact, I find in that case too the case of Syno has not been discussed which in clear terms explains the binding provisions of Sec. 80IA of IT Act. The facts of the case of Synco Industries Ltd. v....
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....ons. Moreover, in that case there was a brought forward loss from the eligible industrial undertaking, which is not so in the present case". In fact, on a similar analysis of fats of the case in hand and that of Meera Cotton cited by the AR. I find the aggregation of profits from the three undertakings of eligible business of generation of power through Wind Mill is loss or negative. The ratio of Syno case and not Meera Cotton case is applicable to the facts of the case on hand. Therefore, it is held that the AO's action of disallowance of claim u/s 80IA is held justified. The grounds of appeal Nos.2 to 9 are dismissed". 7. Aggrieved by the order of the CIT(A) the assessee has preferred the present appeal before the Tribunal. We have heard the rival submissions. The learned DR relied on the order of the CIT(A). The learned counsel for the Assessee reiterated submissions as were made before the AO. 8. We have considered the rival submissions. In Synco Industries Ltd. v. Assessing Officer (Income-tax) [2008] 299 ITR 444, the facts were that the assessee was engaged in the business of oil and chemicals. It had a unit for oil division in Sirohi and a unit for chemica....
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....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. To say that under section 80-I(6) the profits derived from one industrial undertaking cannot be set off against loss suffered from another and that the profit is required to be computed as if the profit making industrial undertaking was the only source of income would almost render the provisions of section 80A(2) of the Act nugatory. Sections 80A(2) and 80B(5) are declaratory and 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. 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. 9. The Mumbai Bench of the Tribunal in the case of Meera Cotton & Synthetic Mills (P.) Ltd. (supra) had an occasion to deal with a case simil....
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....B on the profit derived by it from eligible unit No. 3 at Rs. 100.13 lakhs. 10. The Mumbai Bench of ITAT in the case of Meera Cotton & Synthetic Mills (P.) Ltd. (supra) distinguished the decision of the Hon'ble Supreme Court in the case of Synco Industries Ltd. (supra) as follows: "At this juncture it will be relevant to consider the judgment of the Hon'ble Bombay High Court relied upon by the authorities below in Synco Industries Ltd. v. Assessing Officer [2002] 254 ITR 608 which now stands approved by the Hon'ble apex court in Synco Industries Ltd. v. Assessing Officer [2008] 299 ITR 444. The facts of this case are that the assessee had a unit for oil division and also another unit for chemical division. The assessee earned profits in both the units in the year in question. However it had suffered losses in the oil division in the earlier years. The assessee claimed deductions under sections 80HH and 80-I by claiming that each unit should be treated separately and the losses suffered by the oil division in earlier years be not adjusted against the profits of the chemical division while considering the question of granting deductions under sections 80HH and....
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....ep for considering the grant of deductions under Chapter VI-A is to determine the gross total income, which, in turn, is computed by aggregating the income from all the sources in this year after adjusting the losses of the current year under any head. The brought forward loss or unabsorbed depreciation etc. are also reduced. The resultant figure is determined as gross total income. To put it simply gross total income is the income avail- able at the disposal of the assessee immediately before allowing deductions under Chapter VI-A. If the gross total income is say Rs. 100 and the assessee is entitled to deduction under section 80-IB at Rs. 150, then the amount of deduction under section 80-IB will be restricted to Rs. 100 as per the mandate of section 80A which provides that the deductions shall be allowed from the gross total income and the aggregate amount of all the deductions shall not in any case exceed the gross total income of the assessee. If however the amount of eligible relief under section 80-IB is say Rs. 90, then full amount will be eligible for deduction because the amount of the eligible relief does not exceed the gross total income. Therefore it is mandatory to wo....
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.... 208162611 47422928 39615151 9211366 304412058 Less: Capital gain (Considered separately) 61980319 0 0.00 0.00 61980319 Less: Depreciation as per Income-tax Act 35054316 194785 64769038 52800000 152818139 Less: Deduction u/s 35AC 287000 287000 110840976 47228143 -25153887 -43588634 89326598 Income from Business Capital gains As per Annexure' "A" (.....Long term capital loss Rs. 49,17,717 C/F 0 Less: Deed. Under/Chapter VIA 89326598 1551440 Deed. u/s 80HHC 48779583 47228143 Taxable Income 40547015 12. As can be seen from the computation of total income at the stage of aggregation of income under same head of income as well as under different heads of income, the losses intra head as well as inter head have to be adjusted. It therefore follows that the primary step for considering the grant of deductions under Chapter VI-A is to....