TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 363
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....tances of the case, ld. CIT(A) has erred in directing the AO to allow deduction in respect of income of Luxury group only without setting off losses of Efficiency and Comfort Housing Project." 3. Briefly stated facts are that the assessee claimed deduction u/s. 80IB of the Act in respect to housing project named Luxury (HIG) at New Town, Rajarhat, Kolkata. According to AO, assessee has claimed deduction u/s. 80IB of the Act in respect to housing project namely, HIG (Luxury) but the assessee has also incurred loss in LIG (Efficiency) and MIG (Comfort) but not claimed in the return of income. According to AO, the approval for this project Utsa-the-Condoville was granted vide single approval letter No. 638/Hidco/Ping/141/(2001) dated 23.10.2002. According to AO, in this letter, while granting approval, it is written that approval is in respect of development proposal of 5 acre of land in Block AG of New Town, Rajarhat, Kolkata by Bengal Ambuja Housing Board. He also noted that following drawings for development of 5 acre of land in this block are provisionally approved as under: 1. 0600/C/01 Plans of HIG 2. 0600/C/02 Plans and Sections of HIG 3. 0600/C/03 Elevations....
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....hould have been considered by the AO. 6.12 In so far as A.Y. 2005-06 the Assessing Officer has given an additional reason for disallowing the deduction u/s. 80IB(10). As per the amendment effected by the Finance (No.2) Act 2004; which came into force from A. Y.2005-06; an eligible housing project could not contain commercial area of more than 2000 sq.ft. According to AO; appellant's housing project contained "Utsa Centre" which had commercial area of 5000 sq.ft and this was more than the specified limit. However on reference to Site Plan and the registered Sale-Deeds it appeared that the "Utsa Centre" was part of Efficiency Comfort housing project; set up on demarcated 2 Acres land and the same did not form part of "Utsa-The Condoville Luxury" housing project in respect of which the deduction was claimed. 6.13 For the reasons discussed hereinabove therefore I hold that the assessee was entitled to claim deduction u/s. 80IB(10) with reference to profits derived by "Utsa the Condoville Luxury" housing project and AO was not justified in aggregating loss of "Utsa the Condoville- Efficiency- Comfort" housing project with such profit. The AO is accordingly directed to re-compu....
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....roduct and customer base intended to be served by undertaking or project are common or same. But if the business objective, the quality of product, the customer base intended to be served fundamentally the same can be said to be one and the same undertaking. According to him, there are different purpose, objective, product and customer base in the present case for all the three projects. Ld. Counsel for the assessee drew our attention to the primary condition required to be fulfilled for claiming deduction u/s. 80IB(10) of the Act, for the relevant AY 2004-05, which are as follows: "a) The undertaking was engaged in developing and construction of a housing project, b) The Housing project was constructed on land area exceeding 1 Acre, c) Residential unit comprised in the housing project did not exceed 1500 sq. ft., d) The local authority had sanctioned the project after 1st April, 1998." 6. Ld. Counsel for the assessee also argued that the conduct of the assessee and W.B. Housing Board and the legal documents executed by the parties from time to time indicated that since beginning the assessee consciously planned and executed two separate housing projects. The purpose a....
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....er requisite conditions making the assessee eligible for deduction. On a cursory look at sub-section (4), it is apparently borne out that the amount of deduction is available in respect of the profits and gains derived from an industrial undertaking. If there is no profit from an industrial undertaking obviously there cannot be any question of allowing deduction under this section. Equally if there is a loss in an industrial undertaking in that case again there will not be any point in claiming deduction under this section. As this sub-section provides for granting deduction on the profits and gains derived from "such industrial undertaking", it is clear pointer for granting deduction in respect of profit earned by each of such eligible industrial undertakings separately. If there is a profit derived from such industrial undertaking, the deduction under section 80-IB will follow. The loss from such eligible industrial undertaking will go out of reckoning. There is no warrant for reducing the loss of one eligible undertaking from the profit of the other eligible undertaking. Such an interpretation will lead to violence to the unambiguous language of section, which otherwise talks of....
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....e of the assessee. The gross total income has been defined under section 80B (5) to mean 'the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter.' It therefore follows that the primary step 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 available 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 ....
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....tion 80E, the loss incurred by the assessee in the manufacture of alloy steels (a priority industry) could not be set off against the profits of the manufacture of automobile ancillaries (another priority industry) and hence the assessee was entitled to deduction at the specified rate on the entire profits of the automobile parts industry included in the total income without deducting there from the loss in the alloy steel manufacture. Facts involved in the instant appeal are mutatis mutandis similar. 16. The Hon'ble Andhra Pradesh High Court in the case of CIT v. Visakha Industries Ltd. [2001] 251 ITR 4711 has also taken the similar view by holding that the deductions contemplated under section 80HH and 80-I are to be allowed with reference to the profits of the particular industrial undertaking and not with reference to the total income of the assessee and therefore loss in another unit cannot be set off against the profits of eligible unit. 17. In the instant case, we observe that gross total income of the assessee is Rs. 2,56,37,975/- after adjusting losses suffered by the assessee in the other two 'projects viz. 'Shreyas' and 'Coimbatore'. There are no brought forward lo....