TaxTMI 
TaxTMI 
2015 (12) TMI 625
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....nt year 1991-92. This appeal was admitted on 9.8.2007 to consider following substantial question of law:- "Whether on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in upholding the decision of CIT (A) directing the ITO to allow deductions under Section 80HH and 80I of the Income Tax Act, 1961 without adjusting the losses of other loss making industrial undertakings of the same assessee with the profit of eligible profit making units?" 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee company claimed deduction under sections 80HH and 80I of the Act at Rs. 1,09,43,158/- and Rs. 1,36,78,948/- respectively. During the co....
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....t the benefit under section 80I of the Act was referable to total income which was required to be worked out after taking into account the loss, if any. This view was upheld by the CIT(A) as well as the Tribunal. This Court while dismissing the appeal of the assessee held that in computing the quantum of deduction under section 80I of the Act, out of the profits and gains of unit No.1, the loss incurred in another independent unit No.2 should be set off against the profits of unit No.1. It was recorded as under:- "5. Learned counsel for the assessee submits that for computing the benefit admissible under Section 80-I, loss in another unit could not be taken into account. Reliance has been placed on judgment of Hon'ble Supreme C....
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.... case, exceed the gross total income of the assessee." xxx xxx xxx "80AB Where any deduction is required to be made or allowed under any section included in this Chapter under the heading "C-Deductions in respect of certain incomes" in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the ....
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....rved by Madras High Court in Macmillan Co.of India Ltd. if component of deduction under Section 80-I is to refer total income without excluding the loss therefrom, it will be against the statutory provisions. It will be appropriate to make a reference to the following observations in the said judgment:- "Learned counsel for the assessee, however, contended that the law to be applied is that laid down in the case of CIT V. Canara Workshops P. Ltd. (1986) 161 ITR 320 (SC). It was held in that case that for computing the profits for the purpose of deductions under section 80E of the Income-Tax Act, 1961, the loss incurred by the assessee in the manufacture of alloy Steels (a priority industry) could not be set off against the profits ....