TaxTMI 
TaxTMI 
2020 (10) TMI 80
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....ed. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming the action of Ld. AO in restricting the claim of deduction u/s. 80IA of the Act only to the extent of income from business and profession on the alleged ground that deduction u/s. 80IA shall be allowed to the extent of business income only and not from the gross total income. The Appellant therefore prays that the Ld. AO be directed to allow the claim of deduction u/s. 80IA of the Act against the gross total income. 3* On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not adjudicating the ground of disallowance u/s. 14A r.w.r. 8D of the Act on the alleged ground that disallowance u/s 14A r.w.r. 8D was made in the order passed u/s. 143(3) of the Act and such order was not the subject matter of appeal. The Appellant therefore prays that the action of the Ld. CIT(A) be quashed and disallowance u/s. 14A r.w.r. 8D of the Act be deleted. 4* On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not adjudicating the ground of taxability of dividend income as "income from other sources" on the alle....
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....business profit and therefore, there is a mistake apparent from record which needs rectification. In response to the said notice, the assessee submitted that the deduction u/s 80IA is available from the gross total income which has been correctly allowed during the assessment proceedings. But the AO was not convinced and he recomputed the income by restricting the deduction u/s 80IA to the business income/loss only. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the AO u/s 154. As regards the assessee's challenge to the applicability of section 154 to deduction u/s 80IA, the CIT (A) held that there is no debatable issue and hence can be rectified u/s 154 of the Act. Thus, he upheld the initiation of proceedings u/s 154 and also final order u/s 154 of the Act. Aggrieved, the assessee is in second appeal before us. 6. The learned Counsel for the assessee submitted that this issue had come up before the Tribunal in the assessee's own case for the earlier A.Y wherein the Tribunal has considered relevant provisions of the Act to hold that deduction u/s 80IA is allowable from the Gross Total Income of the assessee for the relevant A.Y. He has....
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....ion order under section 154". 9. In the case of T.S Balaram, ITO vs. Volkart Brothers (Supra), the Hon'ble Supreme Court has held as under: "Section 17(1) of 1922 Act can apply to a 'person'. The expression 'person' is defined in section 2(9) of 1922 Act to include a HUF and a local authority. Unless a firm can be considered as a 'person', section 17(1) of the 1922 Act cannot govern the assessment of the assessee-firm. In the 1961 Act the expression 'person' is defined differently. It is a matter for consideration whether the definition contained in section 2(31) of the 1961 Act is an amendment of the law or is merely declaratory of the law that was in force earlier. To pronounce upon this question, it may be necessary to examine various provisions in the Act as well as its scheme. Thus, the question whether section 17(1) was applicable to the case of the assessee-firm was not free from doubt. Therefore, the ITO was not justified in thinking that on that question there could be no two opinions. It was not open to the ITO to go into the true scope of the relevant provisions of the Act in a proceeding under section 154 of the 1961....
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.... an eligible unit on a standalone basis i.e. as if it is the only source of income to the assessee. This is for the reason that an assessee is eligible for deduction u/s 80IA for a period of 10 years and the first of these ten years can be selected by the assessee. 12. In the case of CIT vs. Dewan Kraft Systems () Ltd (2008) 297 ITR 305, the hon'ble Delhi High Court has clearly brought out that loss of eligible unit cannot be set off against the profits of another eligible unit. Relevant paragraphs of the Hon'ble Delhi High Court decision are as under: "13. Perusal of the above provision shows that it is a distinct and separate deeming provision which lays down the special method of computing the profits and gains entitled to deduction under section 80- IA of the Act. Moreover, this provision is of overriding nature providing specifically that during each of the assessment years in the tax holiday, period in which the assessee is entitled to deduction under section 80- IA of the Act, this provision will be applied as if the industrial unit is an independent unit and is the one and only source of income possessed by the assessee. 14. It is clear th....
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....separate unit eligible for deduction u/s 80IA of the Act. Considering the facts and circumstances of this case, we are of the considered view that the assessee's claim of deduction u/s 80IA is in accordance with the provisions of section 80IA(5) of the Act and also in consonance with the decisions of ITAT, Ahmedabad special Bench and ITAT, Bangalore decision. Hence, we direct the AO to allow deduction claimed u/s 80IA of the Income Tax Act, 1961. 14. In the case of Jindal Aluminium Ltd (Supra), in similar circumstances it was held as under: "13. Coming back to the facts of our case we observe that the gross total income of the assessee is at Rs. 8,03,26,598 lakhs after adjusting the losses suffered by it in the eligible as well as profits of the non-eligible units. There are no brought forward losses or unabsorbed depreciation. The claim of deduction under section 80-IA was in respect of eligible unit 4.14 MW wind energy division at Rs. 4,72,28,143 and the deduction u/s.80HHC of the Act was claimed in respect of other units at Rs. 15,51,440. Even if both the deductions are added the sum total is obviously less than the gross total income. In our considered opi....
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....dance 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 the assessee. If however the amount of eligible relief under section 80-IB is say Rs. 90, then full amount will be eligi....
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....1] 251 ITR 471/118 Taxman 777 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 an other unit cannot be set off against the profits of eligible unit. 21. 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 ITA No 2146 of 2017 NSL Renewable Power P Ltd Hyderabad other two 'projects viz. 'Shreyas' and 'Coimbatore'. There are no brought forward losses or unabsorbed depreciation. The claim of deduction u/s 80IB in respect of the two eligible units viz. 'Spandhana' and 'Samruddhi' of Rs. 2,23,22,237/- is obviously less than the gross total income. In our considered opinion, the Assessing Officer as well as the ld. CIT(A) erred in interpreting the relevant provisions when they held that the losses suffered by the assessee from two projects, viz. 'Shreyas' and 'Coimbatore' be reduced from the profits of the other t....