TaxTMI 
TaxTMI 
2021 (10) TMI 572
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....elating to deduction u/s 80IA of the Act in AY 2013-14. The assessee is engaged in the business of generation of transmission of electric power through Hydal and Solar Renewable energy sources. The assessee runs and operates 5 distinct undertakings engaged in power generation. Out of the above said 5, Unit No.4 is eligible for deduction u/s 80IA(4)(iv) of the Act. 4. The assessment for the assessment year 2013-14 was completed by the A.O. u/s 143(3) of the Act. In the return of income, the assessee had claimed deduction u/s 80IA of the Act to the extent of Rs. 1,09,84,906/- and accordingly returned Nil income. The A.O. determined the total income at Rs. 52,92,989/- after making disallowance u/s 14A of the Act to the extent of Rs. 1,15,54,108/-. The assessee challenged the disallowance made u/s 14A of the Act by filing appeal before Ld. CIT(A), who granted partial relief to the assessee. The A.O. thereafter, passed the order giving effect to the order passed by Ld. CIT(A), wherein the deduction u/s 80IA was granted at Rs. 1,72,46,025/-. 5. The A.O. subsequently noticed that the assessee has declared loss under the head "income from business" and it has earned interest income o....
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.... (5.1 The First ground of the appellant is regarding the claim u/s 80-IA against the action of the AO in adjusting the loss of non 80-IA unit with the profit of 80-IA unit, before computing the deduction u/s. 80-IA on the netted of profit. The appellant in support of its claim has relied on various case laws viz. 2927 ITR 305 in the case of Dewan Kraft System Ltd (2010), Canara Workshop P.L. (1986) 161 ITR 3201, etc., [2012] 26 taxmann.com 317 (Bang.) in the ITAT BANGALORE BENCH 'B' Jindal Aluminium Ltd. In IT APPEAL NO. 1021 (BANG.) OF 2011. In the Jindal Aluminium Ltd. The Hon'ble ITAT BANGALORE has held as under: "Section 80-IA of the Income-tax Act, 1961 - Deductions - Profits and gains from infrastructure undertakings - Computation of deduction - Assessment year 2004-05 - Assessee claimed unit-wise deduction without deducting losses of other eligible units - Gross total income of assessee was positive and more than deduction claimed under section 80-IA - *Whether deduction was to be allowed as claimed - Held, yes [Para 13]". [1986]27 Taxman 262 (SC) SUPREME COURT OF INDIA Commissioner of Income-tax v. Canara Workshops (P.) Ltd CIV....
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....pter IV of Act and not at stage of computation of total income under Chapter VI of Act - Held, yes" The issue involved in the present appeal is regarding the methodology of computation of the deduction U/s. 80(I)A of the Act. The appellant made a claim u/s 80-IA against the action of the AO in adjusting the loss of non 80- IA unit with the profit of 80-IA unit, before computing the deduction u/s. 80- IA on the netted of profit. The judicial precedents cited by the appellant particularly, Dewan Kraft System (P.) Ltd(supra) and in the ITAT BANGALORE BENCH 'B' Jindal Aluminium Ltd in IT APPEAL NO. 1021 (BANG.) OF 2011[2012] 26 taxmann.com317 (Bang.), support the view that no adjustment of the loss of non 80-IA unit with the profit of -IA unit is to be made before computing the deduction u/s. 80-IA. Thus, it is an ted method to compute the deduction u/s. 80-IA unit-wise without ting losses of other eligible units. Respectfully, following binding judicial precedents I allow the claim of the appellant for computing the deduction U/s. 80-IA unit-wise without deducting losses of other eligible units. In the result the AO is directed to re-compute the said deduction under S....
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....ustrate, the 'gross total income' of the Assessee for the assessment year 2002-03 is less than the quantum of deduction determined under Section 80-IA of the Act. The Assessee contends that income from all other heads including 'income from other sources', in addition to 'business income', have to be taken into account for the purpose of allowing the deductions available to the Assessee, subject to the ceiling of 'gross total income'. The Appellate Authority was of the view that there is no limitation on deduction admissible under Section 80-IA of the Act to income under the head 'business' only, with which we agree. 13. The other contention of the Revenue is that sub-section (5) of Section 80-IA refers to computation of quantum of deduction being limited from 'eligible business' by taking it as the only source of income. It is contended that the language of sub-section (5) makes it clear that deduction contemplated in sub-section (1) is only with respect to the income from 'eligible business' which indicates that there is a cap in sub-section (1) that the deduction cannot exceed the 'business income'. On the other hand, it is the case of the Assessee that sub-section (5) ....
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....ery subsequent assessment year up to and including the assessment year for which the determination is to be made." It was held in Synco Industries (supra) that for the purpose of calculating the deduction under Section 80-I, loss sustained in other divisions or units cannot be taken into account as sub-section (6) contemplates that only profits from the industrial undertaking shall be taken into account as it was the only source of income. Further, the Court concluded that Section 80- I(6) of the Act dealt with actual computation of deduction whereas Section 80-I(1) of the Act dealt with the treatment to be given to such deductions in order to arrive at the total income of the assessee. The Assessee also relied on the judgment of this Court in Canara Workshops (P) Ltd., Kodialball, Mangalore (supra) to emphasize the purpose of sub-section (5) of Section 80-IA. In this case, the question that arose for consideration before this Court related to computation of the profits for the purpose of deduction under Section 80-E, as it then existed, after setting off the loss incurred by the assessee in the manufacture of alloy steels. Section 80-E of the Act, as it then existed, perm....
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....ble u/s 80IA of the Act. The assessee claimed deduction of Rs. 3,85,82,607/- u/s 80IA of the Act. The assessee had declared interest income of Rs. 2,24,64,911/- also under the head Income from business and accordingly declared income of Rs. 5,78,25,345/- under the head Income from Business. The assessee declared loss under the head Income from Capital gains and the same was carried forward. The income declared under the head income from other sources was claimed as exempt. Hence the Gross total income came to be computed at Rs. 5,78,25,345/-. The AO took the view that the deduction u/s 80IA is not allowable on the interest income of Rs. 2,24,64,911/-. Accordingly, he reduced the deduction u/s 80IA to the extent of interest income. The Ld CIT(A) deleted the disallowance as done in AY 2013-14. 12. We heard the parties on this issue and perused the record. There is no dispute with regard to the fact that the eligible amount of deduction u/s 80IA was Rs. 3,85,82,607/-. Even, if the interest income is reduced from business income and shown under other sources, the gross total income would remain the same, i.e. Rs. 5,78,25,345/-. Hence, as per the decision rendered by Hon'ble Supreme ....