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2017 (7) TMI 498
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.... been disposed of by the one bench of the Tribunal, by a common order, while the other six (6) appeals have been disposed of by another bench of the Tribunal via another common order. As a matter of fact, one member of the Tribunal is common to both orders. 2.1. Counsel for parties are agreed that there is a common thread and rationale running through the impugned orders of the Tribunal, which has left both sides aggrieved. 2.2. In order to give a synoptic view of the various assessment orders and orders-in-appeal passed, albeit, qua different periods by the authorities below, we have set forth the details pertaining to the same, in the form of a table set out hereafter: T.C.(A) Nos. Filed by Assessment year Assessment Order CIT(A) order Order of the Tribunal 533/2010 Revenue 2000-01 29.12.2006 31.7.2008 28.08.2009 534/2010 Revenue 2001-02 29.12.2006 31.7.2008 28.08.2009 535/2010 Revenue 2002-03 31.12.2007 31.7.2008 28.08.2009 536/2010 Revenue 2003-04 31.12.2007 31.7.2008 28.08.2009 537/2010 Revenue 2004-05 29.12.2006 31.7.2008 28.08.2009 538/2010 Revenue 2005-06 31.12.2007 31.7.2008 28.08.2009 787/2014 Revenue 2006-07 29.12.2008 29....
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....appeals. 5. The second aspect, which arises for consideration, is embedded in T.C.(A)Nos.1219 and 1220 of 2010. As regards this aspect, the Assessee is aggrieved by the fact that the Tribunal has upheld the computation of deduction under Section 80IA, by allowing for squaring off loss incurred by, one, Unit, albeit, for earlier years. This, according to the Assessee, is contrary to the judgment of the Tribunal rendered in : Rangamma Steels and Malleables V. Assistant Commissioner of Income Tax. 6. Before we proceed further, it may be relevant to cull out the questions of law, which have been framed qua the captioned appeals: T.C.(A)Nos. 533 to 538 of 2010: (i). Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the Assessing Officer cannot reconsider the issue of granting the deduction under Section 80IB after the lapse of time, even if there is a survey in the premises of the assessee and findings of the survey shows that the assessee has manipulated his profits so as to get maximum deduction under Section 80IB of the Act ? (ii). Whether on the facts and in the circumstances of the case, the Income Tax....
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....lowing broad facts are required to be noticed. The facts, which we have been able to glean from the records placed before us, are as follows: 8. The Assessee, it appears, at the relevant point in time, was in the business of manufacturing High Tensile Precision Fasteners (in short Fasteners), which are also referred to as "nuts" in the market. These nuts are extensively used in the automobile industry. 8.1. It appears that the Assessee, which is a partnership firm, comprised of one Mr.L.M.Shah and his son Mr.A.L.Shah. The Assessee firm was constituted in March, 1998. 8.2. During the period relevant for Assessment year (A.Y.) 1998-99, the Assessee purchased two Nut former machines. This was followed by the Assessee purchasing in May, 2002, one more Nut Former machine, though, via the import route. For the next five (5) years, relevant for A.Ys.1998-99 and 2002-03, the Assessee claimed deduction at the rate of 100% of the profits derived by it for conducting the business of manufacturing fasteners/nuts. 8.3. The Assessee claims that it set up a second Unit and, started commercial production qua the said Unit on 23.10.2003. Since, the second unit was set up, the Assessee claimed d....
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...., broadly, to stages/process involved in the manufacture of fasteners/nuts. While alluding to the manufacturing process, an attempt was made to link each process to an entity or entities, as the case may be. In this behalf, the record discloses the following: (i) Process of "wire rod pickling" and "phosphating" is carried on by BPL (ii) The next stage, which involves, "forging" is carried out by FX, FOX and the Assessee, by using Nut Former Machines. (iii) The third stage, which involves, "Nut Tapping" is also carried out by FX, FOX and the Assessee. (iv) The last stage, which involves plating of the goods, is carried out by BPL. 10.1. Besides the above, certain secondary operations, such as, "cap cutting", "curling" and "drilling" is carried out by FX, FOX and the Assessee. 10.2. The tools and dyes required in the carrying out of operations, such as, nut forging and nut tapping were, apparently, supplied by TPL, apart from other services, which were rendered by it. 10.3. This information, it appears, was culled out by the Revenue from documents including loose sheets seized in a survey carried out under Section 133A of the 1961 Act, in respect of the aforementioned entities....
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....nt of depreciation in the windmill business in the Asst. Year 2005-06. As per the provision of 80AB, the deduction shall be allowable only on the gross total income (i.e.,) after setting-off of the earlier losses. Accordingly, if the loss of the current Asst. Year (i.e.,) Asst. Year 2006-07 is adjusted (i.e., Rs. 1,31,20,482 - Rs. 33,85,137 = Rs. 97,35,345/-), the balance of Rs. 9,73,53,450/- is adjusted against the earlier years loss of Rs. 2,59,37,516/-, there will be no profit left for deduction u/s 80IA of the Income Tax Act. T.C.(A)No.1220 of 2010 (A.Y.2007-08): On the other hand, on perusal of records revealed that the assessee-firm has computed the amount eligible u/s 80-IA at Rs. 1,44,07,087/- to Wind Power Division-I and Rs. 86,93,342/- in Power Division-II. The provision of 80IA(4)(iv) of the Income Tax Act clearly states that the undertaking which is engaged in generation of Powerand hence, the profits have to be arrived for windmill division together as an undertaking and not as a individual division. Accordingly, the allowable deduction 80IA is restricted to Rs. 68,98,260/- as against Rs. 2,31,00,429/- claimed. ..... 15. Being aggrieved, the Assessee preferred ap....
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....econstruction of a business already in existence; (ii) It is not formed by the transfer to a new business of machinery or plant previously used for any purpose; (iii) It manufactures or produces any article or thing, not being any article or thing specified in the list in the Eleventh Schedule or operates one or more cold storage plant or plants, in any part of India. (iv) Where the industrial undertaking uses power, to aid in the manufacture or production of articles or things, it is required to employ 10 or more workers. In cases, where, manufacturing process is carried out without the aid of power, the number of workers employed should not be less than 20. 20.2. As would be evident, the first two attributes have negative connotations, while 3rd and 4th attributes are positive in nature. 20.3. Interestingly, in so far as the prohibition of forming an industrial undertaking by a transfer of machinery and plant, previously used, for any purpose to a new business is concerned, Explanation 2 contained in Section 80IB(2) provides some latitude. The Explanation indicates that the negative condition will not get kicked-in, if, the value of machinery, or plant, or a part thereof, so....
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....ation which will go against the spirit behind the provision granting the relief. 4.11.5. In order to see whether the appellant firm had been formed as a result of transfer of assets in a substantial manner from the other two concerns, M/s.Fastenex Pvt. Ltd. or Formex, it is necessary to analyse the assets position as well as the manner of functioning and the net profit results of these concerns, year-wise. As already indicated, the capital of these concerns remained intact when the appellant firm was formed. It is only that certain second-hand machinery items Tapping machines that were transferred to the firm through M/s.Toolex Pvt. Ltd. a quick glance of the profits of these two concerns for the accounting periods relevant for the assessment years 1999-2000 to 2005-06 will show that these concerns had been functioning in their own right independently. 4.11.5.1.On a study of the details furnished by the appellant's representative, it is seen that Fromex, the proprietory concern of Shri. A.L.Shah, is the only one that had been carrying on the activities of manufacturing nuts and it had been claiming deduction u/s 80-IB in respect of its profits. The year-wise break up details ....
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....e given below: Financial Year Service charges (Rs.) Sales under sales Tax Act (Rs.) New Profit (Rs.) 2004-05 1,80,12,180.22 ---- 44,84,865.96 2003-04 1,45,85,324.99 ---- 8,33,617.16 2002-03 1,52,46,764.62 8,49,957.80 5,36,238.68 2001-02 164,72,781.23 ---- 63,93,211.60 2000-01 4,52,989.33 4.11.7.Thus, even on an analysis of the affairs of the other concerns and in particular, the proprietory concern, Formex, nothing could be brought out in concrete terms to show that the formation of the appellant firm was by splitting up or by reconstruction of any of these connected concerns. The totality of the facts do indicate that there had been transactions between the connected concerned and the appellant firm in the sense that they had carried out certain processes involved in the manufacture of nuts and it is only the appellant firm which had taken credit for the entire sale of nuts ultimately over a period of years. But, still, going by the principles laid down by the Supreme Court in the cases of Textile Machinery Corporation Ltd. Vs. CIT and Bajaj Tempo Ltd. Vs. CIT, there is nothing in the affairs of the firm M/s.Leo Fasteners to i....
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....tain processes through its connected concerns, viz., Fastenex, Formex and Brigtenex, and the percentage of sales turnover were quite high when compared to the consumption of the raw materials for a number of accounting periods including the impugned year, the Assessing Officer was of the view that the appellant firm by itself had not carried on any manufacturing activities. He had observed as under in the impugned order : In addition, payments are also made to Toolex and Brightenex for Tools/Dies and pickling/phosphating & planting respectively. It is to be noted that M/.s.Toolex and M/s.Brightenex are also exclusively operating for the business of the group and do not have any transactions with outsiders. Thus, in the whole process what the assessee would claim is that tapping of the nuts is done by them and also work relating to cap cutting etc. if any. But, as we have already seen, machinery belonging to other concerns has been transferred using the conduit of Toolex to create tapping capacity in this concern. This kind of manipulation is the reason for such high profit margins whereas all other sister concerns who have actually done most of the processes involved, hardly discl....
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....ility value for the nuts and makes the products usable is being performed by M/s.Leo Fasteners. In case of certain special nuts, secondary operation like assembly, welding etc. is done which enhances the performance of the nuts and also creates greater value addition. These processes are also performed by the unit which effects the sale of nuts. Blanks are only semi-finished components and are not readily marketable. Also, the blanks do not have any utility value. They can only be used as a component from which nuts can be manufactured. Forgingis the process involving nut formers to produce blank nuts from the rods. This process is being carried out by Leo Fasteners (Both units), Fastenex P. Ltd. and Formex. This process can be considered crucial only from the investment/capacity angle. Thus only when the blanks are processed (tapped) properly, duly meeting the requisite precision level do they result in NUTS which are readily marketable. Nut tapping is the process involving tapping machines to produce nuts from the blanks. This clearly brings out the vitality of the tapping process vis-a-vis all other activities involved. This process had been carried on by Leo Fasteners wherev....
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....ity of nut tapping/threading which is crucial to produce a nut, is being done only by the appellant firm. It was also highlighted that after the stage of Nut tapping, the materials are subjected to further processes viz., crimping and welding which are carried out only by the appellant firm and further the process of plating the nuts are done by the connected concern, M/s.Brightenex Pvt. Ltd. But, however, all the nuts so manufactured are passed through quality control by the appellant firm only before they are brought out in the market." (emphasis is ours) 21.6. Clearly, on both counts, CIT(A) held in favour of the Assessee, which is that, it not only was not formed by splitting or reconstruction of an existing business, and that, it did carry out manufacturing activity, contrary to what the Assessing Officers have held. 22. In so far as Unit II is concerned, the CIT(A), in the very same order, while noticing that certain secondary operations were carried out in Unit II, and that, the Assessee had endeavoured to set up Unit II, with the object of enhancing the quality of the final product, i.e., fasteners and nuts and, in that behalf, had imported five (5) brand new nut former....
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.... carried on all the processes involved in the manufacturing of nuts." (emphasis is ours) 23.1. Furthermore, the Assessee relied upon its excise returns to establish that it was a new and separate undertaking involved in the manufacture of fasteners/nuts. 23.2. Despite the said record, the CIT(A) declined, as indicated above, to grant the benefit on the basis of the following rationale and reasoning. "....6.2.13.Thus, it is the contention of the appellant that it is mainly because certain improvisation of the already existing product had been made in Unit-II and new improved quality nuts were also being manufactured and additionally new items of plant and machinery had been installed, it has to be taken that the products turned out by Unit-II are commercially distinct from the products manufactured by Unit-I and for all these purposes, fresh capital had been inducted in Unit-II, this unit must be considered as a "new industrial undertaking" entitled for deduction u/s 80-IB in respect of its profits at 100% and not at 25%. 6.3. On a careful consideration of the facts brought out by the appellant's representative, it is clear that the formation of the Unit-II cannot be consi....
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....Crores by purchasing manufactured nut blanks from Unit-I to the extent of Rs. 3.16 Crores. Apart from these purchases, Unit-II might be involved in manufacturing nuts of different quality on its own and it could have been performing all the operations right from stage one. But, all the activities put together will only lead to the conclusion that Unit-II had also been manufacturing only nuts, but, perhaps, of a different quality used in the automobile industry. The commercial use of the products manufactured by both the units is one and the same. So, when there had been inter-unit transactions and also the products are the same, Unit-II not having an independent legal status, it cannot be said to be a 'new industrial undertaking' in its own right or it cannot be said to be a separate unit apart from Unit-I. Therefore, there is not enough merit in the plea of the appellant's representative that Unit-II must be treated as a 'new industrial undertaking'. 6.4. From the data furnished in the tables in paragraph No.6.2.9 and 6.2.9.3 above, the following points are clear : (i).In order to form Unit-II, the partners of the appellant firm had contributed funds in the f....
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.... diversion of funds and stock of Unit-I. 6.6. As seen from the copy of the order in No.6346/99/B1/CTD dated 6.8.2003 of the Deputy Commercial Tax Officer, Puducherry, wherein the tax holiday period had been extended for a further period of 4 years from 18.3.2003 to 17.3.2007, there is no mention of the existence of two units in the appellant firm or the manufactured product being different commercially in Unit-II. 6.7. Whatever investments that had been made by the appellant firm during the financial year 2003-04 from the funds brought in in the form of capital contributions as well as loans from partners and banks etc. no doubt, can be said to have been made for expanding its business activity of manufacturing nuts which the firm had all along been carrying on. The partners had made investment in the firm M/s.Leo Fasteners only for expanding their business. But the investment had been split and had been diverted as towards Unit-II. The whole lot of investments made in Unit-II can be considered only as splitting up or reconstruction of the already existing unit of the firm. In fact, from the details of plant and machinery as on 31.3.2004 given in respect of Unit-I, it is seen tha....
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.... by this process, the firm had tried to claim double advantage. The sale of nut blanks to Unit-II had been included in the computation of the profits of Unit-I for the purposes of claiming deduction u/s 80-IB at 25% for the impugned accounting period. And also, in addition to the above, the profits arising on sale of the nuts which had been produced from the nut blanks of Unit-I were also included in the profits of Unit-II for the purpose of claiming higher deduction at 100% u/s 80-IB. This situation is not permissible in law. 6.8.1 In view of the foregoing discussion, it is held that Unit-II which is not an integrated unit by itself cannot be considered as a 'new industrial undertaking' whose profits would qualify for deduction u/s 80-IB at 100%. 6.9 To sum up, the following are the inferences to be drawn from the discussions in the above paragraphs: (i).Having accepted the stand that the firm M/s.Leo Fasteners is a valid partnership formed in the year 1998 and it had gone into commercial production of nuts in that year, the Assessing Officer was not correct in questioning or doubting its very formation while dealing with its claim for deduction u/s 80-IB for the assess....
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....ferent product. (ii). That Unit II could be considered as an expansion of Unit I. This improvisation on the product could have been brought about in Unit I. The fact that fasteners/nuts manufactured in Unit No.II were qualitatively different from those manufactured in Unit I, will not make any difference. (iii). That Unit II, in the given period, was able to generate a turnover of Rs. 6.44 crores by purchasing nut blanks from Unit I, to the extent of Rs. 3.16 crores. The commercial use of the products manufactured by Units I and II are one and the same. (iv). That the Deputy Commercial Tax Officer, Puducherry, who, vide order dated 06.08.2003 extended the tax holiday for a period of four (4) years, spanning between 18.03.2003 and 17.03.2007, made no mention of the existence of two units or, that, the product manufactured in Unit II was commercially different. (v). The fact that partners had made investment in the form of capital and loan for expanding their business, would not help the cause of the Assessee as "investment had been split and had been diverted (sic as) towards Unit No.II". The whole investment made in Unit II "can be considered only as splitting up or reconstruct....
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....l from outside agencies. The Assessee had maintained separate accounts. In this case too, no old assets were used in the aforementioned two divisions. The Tribunal, in the said case, had allowed the claim for deduction made by the Assessee under Section 15C, but, it had been reversed by the High Court on the ground that it involved reconstruction of the old business. 24.4. The Supreme Court, while dealing with the issue of, whether or not in the given facts, the Assessee was disentitled to deduction, made the following apposite observations : Again, the new undertaking must not be substantially the same old existing business. The third excluded category mentioned above significant. Even if a new business is carried on but by piercing the veil of the new business it is found that there is employment of the assets of the old business, the benefit will be not available. From this it clearly follows that substantial investment of new capital is imperative. The words "the capital employed" in the principal clause of section 15C are significant, for fresh capital must be employed in the new undertaking claiming exemption. There must be a new undertaking where substantial investment of ....
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.... are, by themselves, identifiable units being marketable commodities and the undertaking can exist even after the cessation of the principal business of the assessee, it cannot be anything but a new and separate industrial undertaking to qualify for appropriate exemption under section 15C. The principal business of the assessee can be carried on even if the said two additional undertakings cease to function. Again, the converse is also true. The fact that the articles produced by the two undertakings are used by the Boiler Division of the assessee will not weigh against holding that these are new and separate undertakings. On the other hand the fact that a portion of the articles produced in these two new industrial undertakings had been sold in the open market to others is a circumstance in favour of the assessee that the new industrial units can function on their own. Use of the articles by the assessee is not decisive to deny the benefit of section 15C. Section 15C partially exempts from tax a new industrial unit which is separate physically from the old one, the capital of which and the profits thereon are ascertainable. There is no difficulty to hold that section 15C is appli....
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....reserve it in some form, and to do so, not by selling it to an outsider who shall carry it on--that would be a mere sale--but in some altered form to continue the undertaking in Such a manner as that the persons now carrying it on will substantially continue to carry it on. It involves, I think, that substantially the same business shall be carried on and substantially the same persons shall carry it on. But it does not involve that all the assets shall pass to the new company or resuscitated company, or that all the shareholders of the old company shall be shareholders in the new company or resuscitated company. Substantially the business and the persons interested must be the same". The Delhi High Court also in Commissioner of Income-tax v. Gangs Sugar Corporation Ltd.(a), accepted the above concept of 'reconstruction' in the following passage :- "We have given the matter our earnest consideration and are of the view that in the reconstruction of business, as in the reconstruction of a company, there is an element of transfer of assets and of some change, however partial or restricted it may be, of ownership of the assets. The transfer, however, need not be of all the as....
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....ndertaking will not be denied the benefit of section 15C simply because it goes to expand the general business of the assessee on some directions. As in the instant case, once the new industrial undertakings are separate and independent production units' in the sense that the commodities produced or the results achieved are commercially tangible products and the undertakings can be carried on separately without complete absorption and losing their identity in the old business, they are not to be treated as being formed by reconstruction of the old business." 25. Therefore, having regard to the principles of law laid down by the Supreme Court, which, to summarize, are that, the fact that an existing unit has been substantially expanded, would not disentitle an Assessee for claiming deduction under Section 80IB of the 1961 Act. 26. In the instant case also, to examine whether there is an substantial expansion, one would have to look at the following indices: (i) Is there an investment to substantiate fresh capital in the concerned industrial undertaking. (ii) Is there employment of requisite labour. (iii) Whether or not, the undertaking manufactures or produces articles or ....
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.... 20% of the total value of plant and machinery, it cannot be viewed as violation of the conditions prescribed under Section 80IB of the 1961 Act for claiming deduction. However, when it came to putting to test the said proposition, vis-a-vis Unit II, the Authorities below construed such transfer as manipulation, only to claim deduction under Section 80IB of the 1961 Act, by keeping the value of the transferred machinery below the permissible limit of 20% of the total value of the plant and machinery of the recipient unit, i.e, Unit II. 27.1. According to us, this objection is without any basis. There is no discussion, either in the order of the Tribunal, or in the order of the CIT(A)s, as to how this would amount to manipulation, as long as the machinery transferred to Unit II was within the permissible limit of 20%, as set out in Explanation 2 to sub-section (2) of Section 80IB. This could not, in our view, form the basis for declining the deduction claimed by the Assessee. 27.2. In raising this objection, the Authorities below have ignored the fact that the condition stipulated in sub-clause (ii) of sub-section (2) of Section 80IB disentitle the Assessee from claiming a deducti....
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....ion under Section 15 C of the 1922 Act. The Supreme Court, as indicated above, ruled in favour of the Assessee by stressing on the fact that it is not a mere transfer of machinery and plant, which was used, previously, for other purpose, that would deprive an Assessee from claiming deduction, but what would, in fact, disentitle the Assessee from claiming deduction, if, transfer enables the formation of new business qua which deduction is claimed. The Court held that the provisions of the like nature, which are incorporated in the Statute by the Legislature to give a fillip to industrialization, should, in case of doubt and/or ambiguity, be interpreted in a manner, which favours the Assessee. In other words, such provisions should liberally construed. 29. The second objection, which the Authorities below have taken qua Assessee vis-a-vis his claim for deduction in respect of Unit II is that, it had purchased nut blanks from Unit I. In this context, one may note that in respect of financial year 2003-04, nut blanks, worth Rs. 3,14,26,875/- were purchased, while in financial year, 2004-05, nut blanks, worth Rs. 8,98,39,763/- were purchased. Based on this, it was concluded by the CIT(....
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....a its orders dated 28.08.2009 and 12.11.2010. 30.2. Therefore, no reconsideration of material was required, as suggested by the Revenue. Consequently, this contention of the Revenue is rejected based on the facts and circumstances emerging in this case. 31. This brings us to the discussion qua the other aspect of the matter, i.e., the computation made by the Assessing Officer in respect of deduction claimed by the Assessee under Section 80IA of the 1961 Act. 31.1. This issue arises, as indicated hereinabove, only in T.C.(A)Nos.1219 and 1220 of 2010. 31.2. The Assessee is aggrieved by the fact that in computing the deduction, which ought to have been made available to it, the provisions of Section 80IA(4)(iv) have been wrongly construed. 31.3. For this purpose, our attention has been drawn to that part of the Assessment Order dated 29.12.2008, which has been passed in respect of A.Y.2006-07, and Assessment Order dated 18.12.2009, which has been passed in respect of A.Y.2007-08. We have already extracted the relevant parts of the two Assessment Orders. 31.4. A careful perusal of the extracts, which are contained in Paragraph 14.1. would show that the Assessing Officer has done ....
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....sions. The Supreme Court further observed in the said judgment that sub-section (5) of section 80-IA provides for manner of computation of profits of an eligible business. Accordingly such profits are to be computed as if such eligible business is the only source of income of the assessee. 15.Section 80-IA reads as follows: 80-IA. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business) there shall, in accordance with and subject to the provisions of this section, be allowed in computing the total income of the assessee, a deduction of an amount equal to hundred per cent, of the profits and gains derived from such business for ten consecutive assessment years. (2) The deduction specified in sub-section (1) may, at the option of the assessee, be claimed by him for any ten consecutive assessment years out of fifteen years beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure facility or starts providing telecommunication service or devel....
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....fined in sub-section (4). Sub-section (2) provides option to the assessee to choose 10 consecutive assessment years out of 15 years. Option has to be exercised, if it is not exercised, the assessee will not be getting the benefit. Fifteen years is outer limit and the same is beginning from the year in which the undertaking or the enterprise develops and begins to operate any infrastructure activity, etc. Sub-section (5) deals with quantum of deduction for an eligible business. The words initial assessment year are used in sub-section (5) and the same is not defined under the provisions. It is to be noted that initial assessment year employed in sub-section (5) is different from the words beginning from the yearreferred to in sub-section (2). The important factors are to be noted in sub-section (5) and they are as under: (1) It starts with a non obstante clause which means it overrides all the provisions of the Act and other provisions are to be ignored; (2) It is for the purpose of determining the quantum of deduction; (3) For the assessment year immediately succeeding the initial assessment year; (4) It is a deeming provision; (5) Fiction created that the eligible business is....
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.... 340 ITR 477 (Madras), wherein, quite clearly, after analysing the provisions of Section 80IA(5), it has come to the conclusion that a fiction has been created to the effect that, the eligible business is required to be considered as the only source of income. 32.2. Therefore, the approach adopted by the Assessing Officer in the two Assessment Orders of treating two separate power generating divisions as a single undertaking is, according to us, not the right approach. 33. As a matter of fact, in the matter of Commissioner of Income Tax V. Dewan Kraft Systems Pvt. Ltd. dated 27.02.2007 in I.T.A.Nos.977 of 2005 and 186 of 2006, the Division Bench of the Delhi High Court, has dealt with some what similar circumstances. 33.1. The Assessee, in that case, was engaged in the business of fabrication and supply of equipments and technical items. The Assessee had business units, located at Kalamb in Himachal Pradesh, and also, business units in Delhi and Noida, in the State of Uttar Pradesh. The Assessee claimed deduction under Section 80IA of the 1961 Act vis-a-vis Kalamb unit. In the case of Unit situated at Delhi, since, there was a loss, no deduction was claimed. The Assessing Office....