TaxTMI 
TaxTMI 
2019 (3) TMI 14
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....me Tax Appellate Tribunal, (in short, 'Tribunal') in respect of Assessment Year 2004-2005. 2. The substantial questions of law framed for determination in this appeal are as follows : "(1) Whether in the case where a company engaged apart from its regular business in the business of generation and distribution of power, owning more than one industrial undertaking, deduction under Section 80-1A of the Act is to be allowed to single industrial unit or to all the units taken together ? (2) Whether the Tribunal was right in holding that for the purpose of computing deduction under Section 80-1A, the assessee was entitled to exemption in respect of the unit situated in Karnataka for which claim was made even though o....
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....e profits earned by the eligible unit coming to the conclusion that the assessee had no positive profits after such set off and, as such, no deduction was liable to be granted under Section 80-1A of the Act. 6. The Commissioner of Income Tax (Appeals) before whom the assessee filed an appeal challenging the order of assessment dismissed the same. The argument of the assessee was that it had claimed the deduction only in regard to the 16 MW unit at Karnataka ('eligible unit') and the other two units were only co-generation units in respect of which no deduction had been claimed. Thus, there was no question, according to the assessee, of setting off the losses of the two units against the profits of the eligible unit. The CIT(A)....
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....rplus, after captive consumption, had been sold. Such undertakings, according to him, could not be treated as separate undertakings for the purpose of deduction under Section 80 I (A). 8. In this view of the matter he negated the submission of the assessee that the units were to be considered as separate units and concluded that all units were to be clubbed as a single generation unit. In fine, the assessee's appeal was dismissed as against which the assessee approached the Tribunal in second appeal. 9. The Tribunal, following the judgment of the Delhi High Court in the case of Commissioner of Income Tax v. Dewan Kraft System (P) Ltd., 297 ITR 305 (Del), held that the provisions of Section 80-1A of the Act would stand attracted on....
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....espect of the one undertaking of its choice. In fact, separate statements have been maintained by the assessee and filed before the Commissioner of Income Tax (Appeals) detailing separate project cost and source of finance in respect of each unit. The assessee has categorically exercised its claim before the Assessing Officer for deduction under section 80IA in respect of only the 16 MW unit at Karnataka. 13. We may, at this juncture, usefully refer to the provisions of section 80IB(5) of the Act which provides that in determining the quantum of deduction under section 80IA, the eligible business shall be treated as the only source of income of the assessee during the previous year relevant to the initial assessment year and to every ....
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....an amount equal to 20% has to be made. Section 80-I (1) lays down the broad parameters indicating circumstances under which an assessee would be entitled to claim deduction. On the other hand Section 80-I (6) deals with determination of the quantum of deduction. Section 80-I (6) lays down the manner in which the quantum of deduction has to be worked out. After such computation of the quantum of deduction, one has to go back to Section 80-I (1) which categorically states that where the gross total income includes any profits and gains derived from an industrial undertaking to which Section 80-I applies then there shall be a deduction from such profits and gains of an amount equal to 20%. The words "includes any profits'' use....
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....ns 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. As observed earlier Section 80-I(6) deals with actual computation of deduction whereas Section 80- I(1) deals with the treatment to be given to such deductions in order to arrive at the total income of the assessee and therefore while interpreting Section 80-I(1), which also refers to gross total income one has to read the expression 'gross total income' as defined in Section 80B(5). Therefore, this Court is of the opinion that the High Court was justified in holding that the loss from the oil divisio....