M/s Alliance India, V. Deputy Commissioner Of Income Tax, Parwanoo

ITA 1453/CHANDI/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4251 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 02-05-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 27-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANDRA KANTA
• Keywords: Question of law
• Section: 80HHC; 80IA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! '# $ % & '# , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NOS.1451 TO 1453/CHD/2016 /ASSESSMENT YEARS : 2010-11 TO 2012-13 M/S ALLIANCE INDIA, KHASRA NO.1348, HILLTOP INDUSTRIAL AREA, VILLAGE- BHATOLI KALAN, JHARMAJARI, BADDI. THE D.C.I.T., PARWANOO. ./PAN NO: AAKFA8946P /ASSESSEE BY : SHRI PARIKSHIT AGGARWAL, CA. / REVENUE BY : SMT.CHANDRAKANTA, SR. DR ! ' /DATE OF HEARING : 02.05.2019 #$%& ' /DATE OF PRONOUNCEMENT: 10.05.2019 /ORDER PER BENCH: ALL THE ABOVE APPEALS HAVE BEEN PREFERRED BY THE SA ME ASSESSEE AGAINST THE SEPARATE ORDERS OF THE COMMISS IONER OF INCOME TAX (APPEALS), FARIDABAD, (IN SHORT CIT(A) DATED 2.11.2016, 2.11.2016 AND 1.11.2016 PERTAINING TO ASSESSMENT YEARS 2010-11, 2011-12 AND 2012-13 ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 2 RESPECTIVELY, PASSED U/S 250(6) OF THE INCOME TAX A CT,1961 (HEREINAFTER REFERRED TO AS ACT) IT WAS COMMON GROUND THAT THE ISSUE INVOLVED IN AL L THE APPEALS WAS IDENTICAL, THEREFORE, THESE WERE ALL HE ARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON, CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. IT WAS POINTED OUT THAT THE SOLE ISSUE INVOLVED IN ALL THE APPEALS RELATED TO WHETHER FOR THE PURPOSE OF QUANT IFICATION OF DEDUCTION U/S 80IC OF THE ACT, THE PROFITS AN D LOSSES OF THE ELIGIBLE UNITS WERE TO BE NETTED. 2. DRAWING OUR ATTENTION TO THE FACTS OF THE CASE, IT WAS POINTED OUT THAT THE ASSESSEE WAS A MANUFACTURE R OF SOAPS CARRYING OUT ITS OPERATIONS IN TWO UNITS, BOTH OF WHICH WERE ELIGIBLE FOR DEDUCTION OF PROFITS U/S 80IC OF THE ACT. DURING THE IMPUGNED ASSESSMENT YEAR ONE UNIT SHOWED PROFITS WHILE THE OTHER HAD SHOWN NET LOSS. THE A.O. HAD ADJUSTED THE LOSS OF ONE ELIGIBL E UNIT AGAINST THE PROFITS OF THE OTHER ELIGIBLE UNIT AND ALLOWED DEDUCTION U/S 80IC OF THE ACT ON THE BALANC E AMOUNT. THE LD.CIT(A) UPHELD THE ORDER OF THE A.O. FOLLOWING THE DECISION OF THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF M/S HIM TEKNOFORGE LTD. V S. ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 3 DCIT, REPORTED IN 256 CTR 293. THE ASSESSEE HAS CHALLENGED THIS ORDER OF THE LD.CIT(A) BEFORE US IN THE IMPUGNED APPEALS FILED. 3. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR ASSESS EE POINTED OUT THAT IDENTICAL ISSUE HAS BEEN DEALT WIT H BY THE ITAT CHANDIGARH BENCH IN GROUP OF APPEALS IN M/ S MILESTONE GEARS PVT. LTD. VS. DCIT IN ITA NO.883 TO 885/CHD/2017 DATED 6.12.2018. COPY OF THE ORDER WAS PLACED BEFORE US. OUR ATTENTION WAS DRAWN TO THE FINDINGS OF THE I.T.A.T. AT PARAS 12 TO 22 OF THE O RDER AS UNDER: 12. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES CAREFULLY AND HAVE EVEN CAREFULLY GONE THROUGH THE ORDERS OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF HIM TEKNOFORGE LTD. (SUPRA) WHICH HAVE BEEN HEAVILY RELIED UPON BY THE REVENUE IN SUPPORT OF THE ORDER OF THE LOWER AUTHORITIES ON THE PROPOSITION THAT THE PROFITS AND LOSSES OF ALL THE ELIGIBLE UNDERTAKINGS ARE TO BE NETTED AND ON THE BALANCE OF PROFITS THE DEDUCTION IS TO BE CALCULATED U/S 80IC OF THE ACT. 13. THE FACTS BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT WERE THAT THE ASSESSEE WAS HAVING SEPARATE UNITS, SOME OF WHICH WERE ENTITLED TO BENEFIT IN TERMS OF SECTION 80HH AND 80IA OF THE ACT AND WHICH WERE REFERRED TO AS PRIORITY UNITS. I N ALL THE CASES NONE OF THE PRIORITY UNITS WERE RUNNING IN LOSSES AND THE REVENUE HAD CONTENDED THAT THE LOSSES OF THE NON PRIORITY UNITS HAD ALSO TO BE TAKEN INTO CONSIDERATION FOR WORKING OUT THE INCOME OF PRIORITY UNITS FOR THE PURPOSE OF CALCULATION OF DEDUCTION U/SS 80HH AND 80IA OF THE ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 4 ACT. IT WAS THE CONTENTION OF THE REVENUE THAT THE INCOME WHETHER POSITIVE OR NEGATIVE OF ALL THE UNI TS PRIORITY OR NON PRIORITY WERE TO BE CLUBBED TOGETHE R FOR WORKING OUT GROSS TOTAL INCOME FOR THE PURPOSE OF GRANT OF TAX BENEFITS. THE CONTENTION OF THE ASSESSEE, ON THE OTHER HAND, WAS THAT THE DEDUCTION WAS TO BE COMPUTED ONLY ON THE PROFITS AND GAINS DERIVED FROM INDUSTRIAL UNDERTAKINGS TO WHICH THE BENEFIT WAS GRANTED AND WAS NOT RELATABLE TO THE GROSS TOTAL INCOME OF THE ASSESSEE BUT ONLY TO THE GROSS INCOME FROM THAT PARTICULAR INDUSTRIAL UNDERTAKING. ON GOING THROUGH THE ORDER OF THE HON'BLE HIGH COURT IN THE CASE OF HIM TEKNOFORGE LTD. (SUPRA), WE FIND THAT THE QUESTION OF LAW BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT WAS THAT WHETHER DEDUCTIONS U/S 80HH/80IA OF THE ACT WERE ALLOWABLE ON THE PROFITS OF EACH UNIT SEPARATELY. THE HON'BLE HIGH COURT AFTER CONSIDERING THE PROVISIONS OF THE ACT AND VARIOUS JUDICIAL DECISION S IN THIS REGARD, HELD THAT WHILE CALCULATING THE DEDUCTION UNDER CHAPTER VI-A, UNDER WHICH THE DEDUCTIONS WERE ALLOWED, ONLY THE PROFITS OF PRIORI TY UNITS, MEANING THEREBY THE ELIGIBLE UNITS, WERE TO BE TAKEN INTO CONSIDERATION. 14. THE HONBLE HIGH COURT ANALYZED THE RELEVANT PROVISIONS OF CHAPTER VI A ,SPECIFICALLY REFERRING TO SECTION 80AB INCLUDED THEREIN AND WHICH DEALT WITH DEDUCTION TO BE MADE WITH REFERENCE TO INCOME INCLUDED IN THE GROSS TOTAL INCOME. THE SAME IS REPRODUCED HEREUNDER FOR CLARITY: 80AB. [DEDUCTIONS TO BE MADE WITH REFERENCE TO THE INCOME INCLUDED IN THE GROSS TOTAL INCOME. WHERE ANY DEDUCTION IS REQUIRED TO BE MADE OR ALLOW ED UNDER ANY SECTION [][* * *] INCLUDED IN THIS CHAPTER UNDE R THE HEADING CDEDUCTIONS IN RESPECT OF CERTAIN INCOMES IN RES PECT OF ANY INCOME OF THE NATURE SPECIFIED IN THAT SECTION WHIC H 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 SECTI ON, THE AMOUNT OF INCOME OF THAT NATURE AS COMPUTED IN ACCO RDANCE WITH THE PROVISIONS OF THIS ACT (BEFORE MAKING ANY DEDUCTION ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 5 UNDER THIS CHAPTER) SHALL ALONE BE DEEMED TO BE THE AMOUNT OF INCOME OF THAT NATURE WHICH IS DERIVED OR RECEIVED BY THE ASSESSEE AND WHICH IS INCLUDED IN HIS GROSS TOTAL I NCOME.] 15. READING THE SAME, THE HON'BLE HIGH COURT HELD THAT THERE CAN BE NO MANNER OF DOUBT THAT ONLY INCOME FROM A PRIORITY UNDERTAKING IS TO BE TAKEN INTO CONSIDERATION WHILE MAKING THE DEDUCTION AND THE PROFITS OR LOSSES OF NON PRIORITY UNDERTAKINGS ARE NOT TO BE CONSIDERED. GOING FURTHER, THE HON'BL E HIGH COURT HELD THAT IF THERE WERE MORE THAN ONE PRIORITY UNDERTAKING, THE PROFITS AND LOSSES OF ALL THE PRIORITY UNDERTAKINGS HAD TO BE CLUBBED TOGETHER AND DEDUCTION WAS TO BE CALCULATED ON THE PROFITS REMAINING. WHILE LAYING DOWN THIS PROPOSITION THE HON'BLE HIGH COURT STATED THAT THOUGH THE HON'BLE APEX COURT IN THE CASE OF CIT(CIVIL) MADRAS VS. CANARA WORKSHOPS PVT. LTD. (1986) 61 ITR 120 HAS CLEARLY HELD THAT NO CLUBBING OF PROFITS AND LOSSES OF PRIORITY UNDERTAKING SHALL TO BE DONE FOR CALCULATING THE QUANTUM OF ELIGIBLE DEDUCTION, THE LATER DECISIONS OF THE HON'BLE APEX COURT IN IPCA LABORATORIES LTD. VS. DCIT (2004) 266 ITR 521, ITO VS. INDUFLEX PRODUCTS PVT. LTD. (2006) 280 ITR 1 AND THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF SYNCO INDUSTRIES LTD. VS. AO & ANOTHER (2008) 299 ITR 444, DILUTED THE SAID DECISION AND RELYING ON THE LATER DECISIONS OF THE HON'BLE APEX COURT, THE HON'BLE HIGH COURT HELD THAT THE PROFITS AND LOSSES OF THE PRIORITY UNITS WERE TO BE CLUBBED AND THEREAFTER THE DEDUCTION CALCULATED. THE HON'BLE HIGH COURT FOUND THAT THE HON'BLE APEX COURT IN THE SAID CASES I.E. IPCA LABORATORIES LTD. (SUPRA) AND INDUFLEX PRODUCTS PVT . LTD. (SUPRA), WHILE DEALING WITH THE ISSUE OF DEDUCTION ALLOWABLE U/S 80HHC, HAD HELD THAT SECTION 80AB HAD A NOTWITHSTANDING CLAUSE AND THUS HAD A OVERRIDING EFFECT OVER ALL OTHER SECTION S IN CHAPTER VIA, WHICH INCLUDED SECTION 80HHC ALSO. THE HONBLE APEX COURT NOTED IN THE SAID DECISION THAT SECTION 80HHC DID NOT PROVIDE THAT ITS PROVISION WOULD PREVAIL OVER SECTION 80AB OR ANY PROVISIONS OF THE ACT. THUS THE HON'BLE APEX COURT HELD THAT THE SECTION 80HHC WOULD BE IGNORED BY 80AB AND, THEREFORE, AS PER SECTION 80AB OF THE ACT ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 6 THE AMOUNT OF INCOME ELIGIBLE FOR DEDUCTION WOULD HAVE TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT WHICH MEANT THAT THE PROFITS AND LOSSES OF UNITS WOULD HAVE TO BE SET OFF AGAINS T EACH OTHER, SINCE THE SECTION PROVIDING FOR SET OFF OF LOSSES PRECEDED THE CHAPTER VI-A DEALING WITH DEDUCTION UNDER THE ACT. FOLLOWING THIS PROPOSITION LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA) THE HON'BLE HIGH COURT HELD THAT THE HON'BLE APEX COURT HAD CLEARLY LAID DOWN THE LAW IN THIS REGARD THAT SECTION 80AB WOULD PREVAIL OVER THE OTHER SECTIONS PROVIDED IN CHAPTER VI A OF THE ACT DEALING WITH THE DEDUCTION OF INCOMES ,AND SINCE SECTION 80AB PROVIDED FOR THE COMPUTATION OF INCOME ELIGIBLE FOR DEDUCTION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT, THE PROFITS AND LOSSES OF ALL PRIORITY UNITS NEEDED TO BE SET OFF AND IN THE BALANCE INCOME ONLY DEDUCTION WAS TO BE CALCULATED. 16. THE POINT TO BE NOTED IS THAT THE HON'BLE HIGH COURT FOLLOWED THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA) WHEREIN THE HON'BLE APEX COURT WAS SEIZED WITH THE ISSUE OF DEDUCTION U/S 80HHC OF THE ACT AND THE HON'BLE APEX COURT HAD HELD THAT SINCE SECTION 80AB OF THE ACT PROVIDED FOR A NOTWITHSTANDING CLAUSE AND THERE BEING NO SUCH CORRESPONDING CLAUSE PROVIDED FOR IN SECTION 80HHC THE PROVISION OF SECTION 80AB WOULD OVERRIDE THE PROVISIONS OF SECTION 80HHC OF THE ACT. THIS IS A VERY IMPORTANT OBSERVATION OF THE HON'BLE HIGH COURT AND IT IS FRO M THIS THAT A DISTINCTION CAN BE DRAWN VIS--VIS DEDUCTION CLAIMED U/S 80IC OF THE ACT, WHICH IS THE FACT IN THE PRESENT CASE. FOR CLARITY THE RELEVANT PROVISIONS OF SECTION 80IA & 80IC OF THE ACT ARE BEING REPRODUCED HEREUNDER: 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 COMPUTIN G ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 7 THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF AN AMOUNT EQUAL TO HUNDRED PER CENT OF PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR TEN CONSECUTIV E ASSESSMENT YEARS.] (5) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WHICH THE PROVISIONS OF SUB - SECTION (1) APPLY SHALL, FOR THE PURPOSES OF DETERMINING THE QUANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR, BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVER Y SUBSEQUENT ASSESSMENT YEAR UP TO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMINATION IS TO BE MADE. 80-IC [SPECIAL PROVISIONS IN RESPECT OF CERTAIN UNDERTAKINGS OR ENTERPRISES IN CERTAIN SPECIAL CATEGORY STATES (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 (2), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS, AS SPECIFIED IN SUB-SECTION (3). 7) THE PROVISIONS CONTAINED IN SUB-SECTION (5) AND SUB-SECTIONS (7) TO (12) OF SECTION 80-IA SHALL, SO FAR AS MAY B E, APPLY TO THE ELIGIBLE UNDERTAKING OR ENTERPRISE UNDER THIS SECTI ON. 17. AS PER SECTION 80IC(7), THE PROVISIONS OF SECTION 80IA(5) HAVE BEEN MADE APPLICABLE TO THE UNDERTAKING OR ENTERPRISES ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. AND, SECTION 80IA(5) BEGINS WITH A NOTWITHSTANDING CLAUSE . THUS WHEN PROVISIONS OF SECTION 80IC ARE READ ALONGWITH THE PROVISIONS OF SECTION 80AB OF THE ACT, WE FIND THAT SECTION 80IC OF THE ACT CLEARLY PROVIDES THAT ITS ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 8 PROVISIONS ARE TO PREVAIL OVER THE PROVISIONS OF SECTION 80AB OF THE ACT WHICH WAS ABSENT IN THE CASE OF SECTION 80HHC, AS NOTED BY THE HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA). THEREFORE, THE PROPOSITION LAID DOWN BY TH E HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF HI M TEKNOFORGE LTD. (SUPRA) THAT THE PROFITS AND LOSSES OF THE PRIORITY UNITS ARE TO BE CLUBBED FOR CALCULATING ELIGIBLE DEDUCTION UNDER CHAPTER VI A HAVING BEEN BORROWED FROM THE LAW LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF IPCA LABORATORIES LTD. (SUPRA), WHICH IS CLEARLY DISTINGUISHABLE FROM THE PRESENT CASE, AS POINTED OUT ABOVE, THE SAME WILL NOT APPLY TO DEDUCTION CLAIMED U/S 80IC OF THE ACT. AS STATED ABOVE, THE PROVISIONS OF SECTION 80IC WILL PREVAIL OVER SECTIO N 80AB OF THE ACT AND THE DEDUCTION WILL HAVE TO BE CALCULATED AS PROVIDED FOR IN SECTION 80IC(7) OF TH E ACT, AS PER WHICH FOR THE PURPOSE OF DETERMINING THE QUANTUM OF DEDUCTION THE ELIGIBLE UNDERTAKING IS TO BE TREATED AS THE ONLY SOURCE OF INCOME OF TH E ASSESSEE DURING THE PREVIOUS YEAR, THUS TREATING EACH ELIGIBLE UNDERTAKING OR ENTERPRISE AS A SEPARATE UNIT FOR THE PURPOSE OF CALCULATING DEDUCTION. 18. EVEN OTHERWISE AS CORRECTLY POINTED OUT BY THE LD.COUNSEL FOR THE ASSESSEE, WHILE THE DECISION IN THE CASE OF HIM TEKNOFORGE LTD. (SUPRA) WAS RENDERED IN THE CONTEXT OF SECTION 80IA, THE ASSESSEE IN THE PRESENT CASE HAS CLAIMED DEDUCTION U/S 80IC AND THE RELEVANT PROVISIONS OF TWO SECTIONS WHICH DEAL WITH THE CALCULATION OF QUANTUM OF DEDUCTION ARE DIFFERENTLY WORDED IN THE TWO SECTIONS HAVING AN IMPACT OF THE INTERPRETATION OF THE SAME. 19. SECTION 80IA(5) STATES THAT THE PROFITS AND GAINS OF ELIGIBLE BUSINESS SHALL BE COMPUTED AS I F SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF A DURING PREVIOUS YEARS. THUS SECTION 80IA(5) APPLIES TO ELIGIBLE BUSINESS, THE MEANING FOR WHICH CAN BE GATHERED FROM SECTION 80IA(1) WHEREIN BUSINESS CARRIED OUT BY ELIGIBLE UNDERTAKING HAVE BEEN REFERRED TO AS ELIGIBLE ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 9 BUSINESS. SECTION 80IC, ON THE OTHER HAND, HAS NO REFERENCE TO BUSINESS AND USES ONLY THE WORK UNDERTAKING OR ENTERPRISE. THIS DISTINCTION, IN O UR VIEW, IS VERY CRITICAL AND IMPORTANT. LITERALLY INTERPRETING THE APPLICABILITY OF THE PROVISIONS O F SECTION 80IA(5) IS BUSINESS SPECIFIC AND, THEREFORE, INCLUDES ALL ELIGIBLE UNDERTAKINGS CARRYING OUT ELIGIBLE BUSINESS. ON THE OTHER HAND, SECTION 80IC(7) STATES THAT THE PROVISIONS OF SECTI ON 80IA(5) WOULD APPLY TO ELIGIBLE UNDERTAKING OR ENTERPRISES MEANING THEREBY THAT THE WORD BUSINESS USED IN SECTION 80IA(5) IS TO BE SUBSTITUTED WITH ELIGIBLE UNDERTAKING. THEREFORE, F OR THE PURPOSE OF SECTION 80IC(7), WE AGREE WITH THE LD. COUNSEL FOR ASSESSEE, IT IS THE PROFITS OF EACH ELIGIBLE UNDERTAKING WHICH ARE TO BE TREATED AND TAKEN SEPARATELY AS BEING THE ONLY SOURCE OF THE INCOME DURING THE IMPUGNED YEAR AND ALLOWED DEDUCTION THEREOF AS OPPOSED TO TREATING THE ELIGIBLE BUSINESS OF ALL ELIGIBLE UNDERTAKINGS U/S 80IA(5) OF THE ACT AS BEING THE ONLY SOURCE OF INCOME FOR THE IMPUGNED YEARS AS STIPULATED U/S 80IA(5) OF THE ACT. 20. THE FIRST AND PRIMARY RULE OF CONSTRUCTION IS THAT THE INTENTION OF THE LEGISLATURE MUST BE FOUND IN THE WORDS USED BY THE LEGISLATURE ITSELF. EVERY WORD OF A STATUTE HAS TO BE ASSUMED TO HAVE BEEN DELIBERATELY AND CONSCIOUSLY INCORPORATED THEREIN BY THE LEGISLATURE AND IF THE LANGUAGE OF A STATUTE IS CLEAR AND EXPLICIT, EFFECT MUST BE GIVEN TO EACH WORD. THE HONBLE APEX COURT HAS TIME AND AGAIN REINFORCED THIS RULE OF INTERPRETATION OF STATUTES IN ITS JUDGEMENTS, RIGHT FROM PADMASUNDARA RAO VS STATE OF TN 255 ITR 147(SC), MOHAMMAD VS CWT 224 ITR 672(SC) & PANDIAN CHEMICALS LTD. VS CIT 262 ITR 278(SC).IN VIEW OF THE SAME SINCE THE WORDS USED IN SECTION 80IC CATEGORICALLY STATE THA T THE PROVISIONS OF SUB SECTION 5 TO SECTION 80IA SHA LL APPLY TO THE ELIGIBLE UNDERTAKING OR ENTERPRISE, TH EY HAVE TO BE READ AS SUCH AND APPLIED TO EACH UNDERTAKING, MEANING THEREBY THAT THE PROFITS OF EACH ELIGIBLE UNDERTAKING HAS TO BE TREATED AS IF I T WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE. ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 10 21. FURTHER AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE THAT IF THE INTERPRETATION GIV EN IN THE CASE OF HIM TEKNOFORGE LTD. (SUPRA) IS APPLIED FOR THE PURPOSE OF SECTION 80IC, IT WOULD LEAD TO AN ANOMALOUS SITUATION CREATING A DIFFICULT Y FOR CALCULATING THE QUANTUM OF DEDUCTION, SINCE AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE , THE SECTION PROVIDES FOR DIFFERENT RATES OF DEDUCTI ON OF PROFITS FOR DIFFERENT YEARS IN CASE OF SPECIFIC UNDERTAKINGS AND IF NETTING OF PROFITS AND LOSSES O F ALL ELIGIBLE UNDERTAKINGS ARE RESORTED TO, AS LAID DOWN IN THE DECISION OF HIM TEKNOFORGE LTD. (SUPRA), IN A SITUATION WHERE THE DIFFERENT ELIGIBL E UNITS ARE ENTITLED TO DIFFERENT RATES OF DEDUCTION OF PROFITS, IT WOULD BE DIFFICULT TO DETERMINE THE RAT E TO BE APPLIED TO THE REMAINING PROFITS SINCE THERE IS NO SECTION OR PROVISION IN THE ENTIRE ACT DEALING WITH SUCH A SITUATION. WE THEREFORE, AGREE WITH THE LD. COUNSEL FOR ASSESSEE THAT THE DECISION IN THE CASE OF HIM TEKNOFORGE LTD. (SUPRA) HAVING BEEN RENDERED IN THE CONTEXT OF SECTION 80IA DOES NOT APPLY IN THE PRESENT CASE WHICH DEALS WITH DEDUCTION U/S 80IC OF THE ACT AND SINCE AS PER SECTION 80IC IT IS THE PROFIT ON EACH UNDERTAKING WHICH IS TO BE TREATED AS SEPARATELY, THE PROFITS AND LOSSES OF ALL THE ELIGIBLE UNDERTAKINGS ARE NOT TO BE NETTED FOR THE PURPOSE OF CALCULATING DEDUCTION U/S 80IC AND ARE TO BE TAKEN ON A STAND ALONE BASIS. 22. IN VIEW OF THE ABOVE, WE DIRECT THE A.O. TO ALLOW DEDUCTION TO THE ASSESSEE U/S 80IC WITH RESPECT TO THE PROFITS EARNED BY THE ASSESSEE FROM THE ELIGIBLE UNDERTAKINGS IGNORING THE LOSSES FROM OTHER ELIGIBLE UNDERTAKINGS. GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS ALLOWED. 4. REFERRING TO THE SAME IT WAS POINTED OUT THAT TH E I.T.A.T. HAD DECIDED THE ISSUE IN FAVOUR OF THE ASS ESSEE HOLDING THAT NO NETTING OF PROFITS AND LOSSES OF TH E ELIGIBLE UNITS WAS TO BE DONE FOR THE PURPOSE OF ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 11 CALCULATING THE DEDUCTION U/S 80IC OF THE ACT AND E ACH UNIT FOR THE SAID PURPOSE HAD TO BE TREATED SEPARAT ELY. IT WAS POINTED OUT THAT THE I.T.A.T. HAD CONSIDERED THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF M/S HIM TEKNOFORGE LTD. (SUPRA) AND DISTINGUISHED THE SAME. IT WAS FURTHER POINTED OUT THAT FOLLOWING THE SAID DECISION THE I.T.A.T. HAD ALLOWE D THE ASSESSEES APPEALS ON IDENTICAL ISSUE IN THE CASE O F GLOBE PRECISION INDUSTRIES PVT. LTD. IN ITA NO.871 OF 2017 DATED 8.1.2019 AND AGAIN IN THE CASE OF M/S HI M TEKNOFORGE LTD. IN ITA NOS.1674 & 1675/2017 DATED 13.3.2019. COPIES OF THE ORDERS WERE PLACED BEFORE US. 5. THE LD. DR FAIRLY CONCEDED THAT THE ISSUE INVOLV ED IN THE IMPUGNED APPEALS HAD BEEN ADJUDICATED IN FAVOUR OF THE ASSESSEE BY THE I.T.A.T. IN THE AFORE SAID CASES, THOUGH SHE HAS HEAVILY RELIED UPON THE JUDGM ENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CA SE OF M/S HIM TEKNOFORGE LTD. (SUPRA). 6. WE HAVE HEARD BOTH THE PARTIES. IN VIEW OF THE ADMITTED FACT THAT IDENTICAL ISSUE ALREADY STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE I.T.A.T. V IDE ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 12 THEIR ORDERS PASSED IN THE CASE OF M/S MILESTONE GE ARS PVT. LTD. (SUPRA) AND GLOBE PRECISION INDUSTRIES PV T. LTD., WHICH DECISIONS HAD BEEN RENDERED AFTER CONSIDERING THE JUDGEMENT OF THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF HIM TEKNOFORGE (SUPRA),AN D FURTHER SINCE THE LD. DR HAS BEEN UNABLE TO DISTINGUISH THE SAID DECISIONS BEFORE US ,THE ISSUE IN THE PRESENT APPEALS, WE HOLD, STANDS SQUARELY COVER ED BY THE AFORESTATED ORDERS OF THE I.T.A.T.. FOLLOWIN G THE SAME WE HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUC TION U/S 80IC OF THE ACT WITH RESPECT TO THE PROFITS EAR NED BY IT FROM ELIGIBLE UNITS, IGNORING THE LOSSES FROM OTHER ELIGIBLE UNITS/UNDERTAKINGS. 7. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- $ % & '# (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER () /ACCOUNTANT MEMBER +$ /DATED: 10 TH MAY, 2019 * # * ITA NOS.1451 TO 1453/CHD/2016 A.YS. 20 10-11 TO 2012-13 13 $'( )*+* / COPY OF THE ORDER FORWARDED TO : 1. , / THE APPELLANT 2. (-, / THE RESPONDENT 3. . / CIT 4. . ( )/ THE CIT(A) 5. */0( 1 , '1 , 23405 / DR, ITAT, CHANDIGARH 6. 046! / GUARD FILE $' / BY ORDER, / ASSISTANT REGISTRAR