TaxTMI 
TaxTMI 
2015 (3) TMI 455
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....lowing deduction u/s 80 IA on profits of the new eligible industrial unit without setting off the losses of other unit against the profit of the new industrial undertaking in view of the specific provisions contained to the contrary in Section 80 AB and Section 80B(5) of the Income Tax Act, 1961?" 3. The year of assessment involved in this appeal is 1995-96. The assessee claimed deduction of a sum of Rs. 47,59,806/- being 30% of gross profit Rs. 1,58,66,020/- under Section 80 IA of Income Tax Act, 1961 (hereinafter referred to as the "Act, 1961"). The assessee claimed that amount of Rs. 1,58,66,020/- represents the income of new unit called C.V. Cable Unit, i.e., Continuous Vulcanization Process Unit. It was claimed that said unit became f....
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....o as to result in an overall loss which is prohibited u/s 80A(2). It is, therefore, held that the deduction u/s 80 IA is to be computed on the profit of such industrial undertaking which, in the present case, is Rs. 1,58,66,020/-. The deduction admissible on this profit @ 30% is Rs. 47,59,806/-. Since the gross total income as computed by the A.O. is more than this deduction, the deduction u/s 80 IA is admissible as a whole out of the gross total income so computed by the A.O. Accordingly, the deduction under section 80 I is admissible to the assessee at Rs. 47,59,806/- as against allowed by the A.O. at Rs. 22,33,156/-. The A.O. should allow necessary relief to this extent. This ground of appeal is, therefore, allowed." 5. The Revenue pref....
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....High Court was justified in holding that gross total income must be determined, by setting off against the income, the business losses of earlier years, before allowing deduction under Chapter VI-A and if the resultant income is 'Nil', then the Assessee cannot claim deduction under Chapter VI-A. 12. The contention that under Section 80-I (6) the profits derived from one industrial undertaking cannot be set off against loss suffered from another and the profit is required to be computed as if profit making industrial undertaking was the only source of income, has no merits. Section 80-I (1) lays down that where the gross total income of the assessee includes any profits derived from the priority undertaking/unit/division, then in co....
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....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, cannot be taken into account because Sub-section contemplates that only the profits shall be taken into account as if it was the only source of income. However, Section 80A(2) and Section....
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....shna Agrawal, learned counsel appearing for assessee could not dispute that in view of the Apex Court's decision in Synco Industries Ltd. vs. Assessing Officer, Income Tax, Mumbai (supra) and this Court's decision in Commissioner of Income Tax Vs. Arif Industries Ltd. (supra), the substantial question of law formulated in this appeal has to be answered in favour of Revenue. Though he placed reliance on a decision of Andhra Pradesh High in Commissioner of Income Tax Vs. Visakha Industries Ltd., (2001) 251 ITR 471 and Delhi High Court's decision in Commissioner of Income Tax Vs. Dewan Kraft System P. Ltd., (2008) 297 ITR 305 but did not dispute that both these judgments were rendered before Apex Court's decision in Synco Indus....