DCIT, New Delhi V. M/s. Precision Electronics Ltd., New Delhi

ITA 6621/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97978 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 26-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 13-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHI S MOHANTY
• Assessee Lawyers: P K JAIN
• Keywords: Business income; Question of law

Judgement Text

I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRAMOHAN GARG, JUDICIAL MEMBER ITA NO.6621/DEL/2013 ASSTT. YEAR: 2009-10 DCIT, VS PRECISION ELECTRONICS LTD., CIRCLE 14(1), D-1081, NEW FRIENDS COLONY, NEW DELHI. NEW DELHI.110065 (PAN: AACP1441P) (APPELLANT) (RESPON DENT) APPELLANT BY: SHRI ASHIS MOHANTY, SR. DR RESPONDENT BY: SHRI P.K. JAIN, C A O R D E R PER C.M. GARG, J.M. THIS APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 20 09-10 HAS BEEN PREFERRED AGAINST THE ORDER OF CIT(A)-XVI, DATED 09 .09.2013 PASSED IN FIRST APPEAL NO. 351/11-12 FOR ASSESSMENT YEAR 2009-10. 2. THE GROUNDS RAISED BY THE REVENUE READ AS FOLLOW S:- 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING IN THE APPEAL OF THE ASSESSEE DIRECTING THE ASSESSING OFFICER TO CONSIDER THE PRO FITS & GAINS OF ROORKEE UNIT ONLY FOR ALLOWING DEDUCTION U/S 80IC O F THE ACT AND ALSO TO DETERMINE THE LOSSES OF NOIDA UNIT TO BE CA RRIED FORWARD. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN DECIDING THE ISSUE FOLLOWING TH E JUDGMENT OF HONBLE HIGH COURT, DELHI WITHOUT APPRECIATING THE FACT THAT THE SAID JUDGMENT HAS BEEN OVERRULED BY THE DECISION OF THE APEX I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 2 COURT VIDE CIVIL APPEAL NO. 4192-4193 OF 2002 DATE D 13.03.2008 M/S SYNCO INDUSTRIES VS AO. 3. WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD BEFORE US. LD. DR SUPPORTING THE STAND AND ACTION OF THE ASSESSING OFFICER SUBMITTED THAT DEDU CTION U/S 80IC OF THE INCOME TAX ACT, 1961 CAN ONLY BE ALLOWED AFTER ARRIVING AT THE GROSS TOTAL INCOME BY COMBINING THE INCOME OF BOTH THE UNITS I.E. NOIDA U NIT AND ROORKEE UNIT AND EXCESS DEDUCTION CLAIMED BY THE ASSESSEE WAS RIGHTL Y DENIED TO HIM. 4. LEARNED COUNSEL OF THE ASSESSEE STRONGLY SUPPORT ED THE IMPUGNED ORDER AND SUBMITTED THAT THE CIT(A) AFTER PROPERLY CONSID ERING THE RATIO LAID DOWN BY HON'BLE HIGH COURT OF DELHI IN THE CASE OF CIT VS S ONA KOYO STEERING SYSTEMS LTD. ORDER DATED 10.2.2010 IN I.T.A. NO. 1279/2008 AND OTHER CONNECTED APPEALS RIGHTLY ALLOWED CLAIM OF THE ASSESSEE. 5. ON CAREFUL CONSIDERATION OF ABOVE, AT THE VERY O UTSET, FROM THE ORDER OF THE HON'BLE HIGH COURT IN THE CASE OF CIT VS SONA KOYO (SUPRA) IT IS AMPLY CLEAR THAT AFTER CONSIDERING AND REFERRING TO THE PROPOSI TIONS LAID DOWN BY HONBLE APEX COURT IN THE CASE OF SYNCO INDUSTRIES LTD. VS ASSESSING OFFICER 299 ITR 444 (S.C.) AND ITS OWN ORDER IN THE CASE OF CIT VS DEWAN KRAFT SYSTEM PVT. LTD. 297 ITR 305 (DEL) SPEAKING FOR HONBLE JURISDICTIONAL HIGH COURT HAS HELD AS FOLLOWS:- I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 3 3. AFTER HEARING THE COUNSEL FOR THE PARTIES, WE F EEL THAT THE FOLLOWING SUBSTANTIAL QUESTION OF LAW ARISES FO R OUR CONSIDERATION. 'WHETHER, IN THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE INCOME- TAX APPELLATE TRIBUNAL ERRED IN LAW IN HOLDING THAT THE LOSS OF ONE UNIT COULD NOT BE SET OFF AGAINST THE OTHER UNI T IN VIEW OF THE PROVISIONS OF SECTION 80-I(1)(6) AND 80-B (5) OF THE INCOME-TAX ACT , 1961 ?' 4. SINCE THE ISSUE INVOLVED IS PURELY LEGAL, THE CO UNSEL FOR THE PARTIES AGREED THAT THE MATTER MAY BE DISPOSED OF A T THIS STAGE ITSELF WITHOUT THE REQUIREMENT OF FILING ANY PAPER BOOK. WE HAVE, THEREFORE, HEARD THE COUNSEL FOR THE PARTIES AT LEN GTH ON THE AFORESAID QUESTION. 5. THE LEARNED COUNSEL FOR THE APPELLANT SUBMITTED THAT THE QUESTION OF ADJUSTMENT / SETTING OFF OF THE LOSS OF ONE UNIT AS AGAINST THE PROFIT OF THE OTHER UNIT STANDS COVERED BY THE DECISION OF THE SUPREME COURT IN THE CASE OF SYNCO INDUSTRIES LTD V. ASSESSING OFFICER (INCOME-TAX) AND ANOTHER : 299 ITR 444 (SC). THE LEARNED COUNSEL FOR THE APPELLANT, HOWEVER, FAI RLY SUBMITTED THAT THERE IS A DECISION OF A DIVISION BENCH OF THI S COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. DEWAN KRAFT SYSTEMS P . LTD : 297 ITR 305 (DELHI) WHICH HAS CONSIDERED THE PARI MATERIA PROVISIONS OF SECTION 80-IA(7) OF THE SAID ACT AND HAS HELD AGAINST THE REVENUE. THE LEARNED COUNSEL SUBMITS TH AT THOUGH THE DECISION OF THE DELHI HIGH COURT IS AGAINST HIM, TH E LATTER DECISION OF THE SUPREME COURT IN THE CASE OF SYNCO INDUSTRIES LTD. (SUPRA) IS CLEARLY IN HIS FAVOUR AND, THEREFOR E, THE QUESTION OUGHT TO BE ANSWERED IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE. 6. ON THE OTHER HAND, THE LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE DECISION OF THIS C OURT IN C.I.T. V. DEWAN KRAFT SYSTEMS (SUPRA) IS CLEARLY IN FAVOUR OF THE ASSESSEE AND THERE IS NOTHING IN THE SUPREME COURT DECISION IN SYNCO INDUSTRIES LTD. (SUPRA) WHICH WOULD ENABLE US TO DE TRACT FROM THAT POSITION. CONSEQUENTLY, HE SUBMITTED THAT THE QUESTION BE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 7. SECTION 80-I(1) READS AS UNDER:- I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 4 '80-I. DEDUCTION IN RESPECT OF PROFITS AND GAINS FR OM INDUSTRIAL UNDERTAKINGS AFTER A CERTAIN DATE, ETC. - (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INC LUDES ANY PROFITS AND GAINS DERIVED FROM AN INDUSTRIAL UNDERT AKING OR A SHIP OR THE BUSINESS OF A HOTEL OR THE BUSINESS OF REPAIRS TO OCEAN-GOING VESSELS OR OTHER POWERED CRAFT TO WHICH THIS SECTION APPLIES, THERE SHALL, IN ACCORDANCE WITH AND SUBJEC T TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTIN G THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFI TS AND GAINS OF AN AMOUNT EQUAL TO TWENTY PER CENT THEREOF: PROVIDED THAT IN THE CASE OF AN ASSESSEE, BEING A C OMPANY, THE PROVISIONS OF THIS SUB-SECTION SHALL HAVE EFFECT IN RELATION TO PROFITS AND GAINS DERIVED FROM AN INDUSTRIAL UNDERT AKING OR A SHIP OR THE BUSINESS OF A HOTEL AS IF FOR THE WORDS 'TWENTY PER CENT', THE WORDS 'TWENTY- FIVE PER CENT' HAD BEEN S UBSTITUTED.' SECTION 80-I (6) READS AS UNDER:- '(6) NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTH ER PROVISION OF THIS ACT, THE PROFITS AND GAINS OF AN INDUSTRIAL UNDERTAKING OR A SHIP OR THE BUSINESS OF A HOTEL OR THE BUSINESS OF REPAIRS TO OCEAN-GOING VESSELS OR OTHER POWERED CRAFT TO WHICH THE PROVISIONS OF SUB-SECTION (1) APPLY SHALL, FOR THE PURPOSES OF DETERMINING THE QUANTUM OF DEDUCTION UNDER SUB-SECT ION (1) FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INIT IAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR, BE COMPUTED AS IF SUCH INDUSTRIAL UNDERTAKING OR SHIP OR THE BU SINESS OF THE HOTEL OR THE BUSINESS OF REPAIRS TO OCEAN-GOING VES SELS OR OTHER POWERED CRAFT WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEARS RELEVANT TO THE INITIAL A SSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UP TO AND I NCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMINATION IS TO B E MADE.' SECTION 80-B (5), WHICH DEFINES GROSS TOTAL INCOME, IS AS FOLLO WS:- '(5) 'GROSS TOTAL INCOME' MEANS THE TOTAL INCOME CO MPUTED IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT, BEFORE MAKING ANY DEDUCTION UNDER THIS CHAPTER.' A PLAIN READING OF THE SAID PROVISIONS MAKES IT CLE AR THAT GROSS TOTAL INCOME REFERRED TO IN SECTION 80-I HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE SAID ACT BEFO RE MAKING ANY DEDUCTION UNDER CHAPTER VI- A. IT IS, THEREFORE, CL EAR THAT WHILE I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 5 COMPUTING GROSS TOTAL INCOME, THE DEDUCTIONS REFERR ED TO IN CHAPTER VI-A, WHICH INCLUDES SECTION 80-I , ARE NOT TO BE CONSIDERED. THE GROSS TOTAL INCOME OF THE ASSESSEE HAS TO BE COMPUTED AFTER MAKING ALL OTHER ADJUSTMENTS OF LOSS ES AND CARRY FORWARD LOSSES IGNORING THE DEDUCTIONS AVAILABLE UN DER CHAPTER VI-A. THERE IS NO DISPUTE WITH THIS PROPOSITION. 8. IT IS FURTHER CLEAR FROM A PLAIN READING OF THE AFORESAID PROVISIONS THAT THE DEDUCTION UNDER SECTION 80-I IS TO BE MADE IN CASE THE GROSS TOTAL INCOME INCLUDES ANY PROFITS AN D GAINS DERIVED FROM AN INDUSTRIAL UNDERTAKING, ETC.., IN C ASE SUCH PROFITS AND GAINS ARE INCLUDED IN THE GROSS TOTAL INCOME OF THE ASSESSEE. THE DEDUCTION IN THE CASE OF A COMPANY, IN VIEW OF THE PROVISO TO SECTION 80-I (1), IS TO BE GIVEN TO THE EXTENT OF 25% OF SUCH P ROFITS AND GAINS OF SUCH AN INDUSTRIAL UNDERTAKING. IT IS ALSO CLEAR THAT IN VIEW OF SECTION 80-I (6), WHICH BEGINS WITH A NON-OBSTANTE CLAUSE, THE QUANTUM OF DEDUCTION IS TO BE COMPUTED AS IF THE INDUSTRIAL UNDERTAKING WERE THE ONLY SOURCE OF INCO ME OF THE ASSESSEE DURING THE RELEVANT YEARS. IN OTHER WORDS, EACH INDUSTRIAL UNDERTAKING OR UNIT IS TO BE TREATED SEP ARATELY AND INDEPENDENTLY. IT IS ONLY THOSE INDUSTRIAL UNDERTAK INGS, WHICH HAVE A PROFIT OR GAIN, WHICH WOULD BE CONSIDERED FO R COMPUTING THE DEDUCTION. THE LOSS MAKING INDUSTRIAL UNDERTAKI NG WOULD NOT COME INTO THE PICTURE AT ALL. THE PLAIN READING OF THE PROVISION SUGGESTS THAT THE LOSS OF ONE SUCH INDUSTRIAL UNDER TAKING CANNOT BE SET OFF AGAINST THE PROFIT OF ANOTHER SUCH INDUS TRIAL UNDERTAKING TO ARRIVE AT A COMPUTATION OF THE QUANT UM OF DEDUCTION THAT IS TO BE ALLOWED TO THE ASSESSEE UND ER SECTION 80-I (1) OF THE SAID ACT. 9. IN THIS REGARD, WE MAY REFER TO THE DECISION OF THIS COURT IN THE CASE OF DEWAN KRAFT SYSTEMS (SUPRA), WHICH CONSIDER ED THE PARI MATERIA PROVISIONS OF SECTION 80-IA(7) OF THE SAID ACT. IN THAT CASE, THE QUESTION AROSE WITH RESPECT TO COMPUTATIO N OF THE DEDUCTION IN RELATION TO THREE UNITS - THE KALAMB U NIT, THE DELHI UNIT AND THE NOIDA UNIT. THIS COURT HELD THAT WHILE COMPUTING THE DEDUCTION UNDER SECTION 80-IA OF THE SAID ACT, THE PROFITS AND GAINS OF THE KALAMB UNIT FOR THE PURPOSES OF DETERM INING THE QUANTUM OF DEDUCTION UNDER SECTION 80-IA(5) WAS TO BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS OF THE SAID U NIT WAS THE ONLY SOURCE OF INCOME OF THE ASSESSEE. THIS COURT OBSERV ED THAT THE ASSESSING OFFICER HAD ERRONEOUSLY MIXED THE PROFITS OF THE DELHI AND NOIDA UNITS AND HAD THEREBY RESTRICTED THE DEDU CTION TO THE I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 6 EXTENT OF BUSINESS INCOME AND THAT SUCH AN EXERCISE WAS IN TOTAL DISREGARD OF THE PROVISIONS OF SUB-SECTION (7) OF SECTION 80-IA OF THE SAID ACT. IT WAS HELD THAT THE KALAMB UNIT, BEI NG THE ONLY UNIT OF THE ASSESSEE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IA OF THE SAID ACT, WAS TO BE TREATED AS AN INDEPENDENT UNIT AND THE SAME WAS TO BE TREATED AS THE ONLY SOURCE OF INCOME OF T HE ASSESSEE FOR THE PURPOSES OF COMPUTING DEDUCTION UNDER SECTION 80-IA . 10. WE NOW CAME TO THE DECISION OF THE SUPREME COUR T IN THE CASE OF SYNCO INDUSTRIES LTD (SUPRA) WHICH WAS STRO NGLY RELIED UPON BY THE LEARNED COUNSEL FOR THE APPELLANT. ON G OING THROUGH THE ENTIRE DECISION, WE FIND THAT THE SUPREME COURT WAS PRIMARILY CONCERNED WITH THE QUESTION AS TO WHETHER ANY DEDUC TION COULD BE ALLOWED UNDER CHAPTER VI-A IF THE GROSS TOTAL IN COME WAS NIL . IT IS IN THAT CONTEXT THAT THE SUPREME COURT CONS IDERED THE CONCEPT OF GROSS TOTAL INCOME AND CAME TO THE CONCL USION, FOLLOWING ITS EARLIER DECISION IN CIT V. KOTAGIRI INDUSTRIAL CO- OPERATIVE TEA FACTORY LTD : 224 ITR 605, THAT THE GROSS TOTAL INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH THE AC T AFTER ADJUSTING THE LOSSES, ETC. AND THAT, IF THE GROSS T OTAL INCOME SO DETERMINED IS POSITIVE, THEN THE QUESTION OF ALLOWI NG DEDUCTIONS UNDER CHAPTER VI-A WOULD ARISE, BUT NOT OTHERWISE. WHILE DOING SO, THE SUPREME COURT FURTHER MADE IT CLEAR THAT TH E GROSS TOTAL INCOME MUST BE DETERMINED BY SETTING OFF BUSINESS L OSSES OF EARLIER YEARS BEFORE ALLOWING DEDUCTION UNDER CHAPT ER VI-A AND THAT IF THE RESULTANT INCOME IS NIL, THEN THE ASS ESSEE CANNOT CLAIM ANY DEDUCTION UNDER CHAPTER VI-A. WHILE COMIN G TO THE AFORESAID CONCLUSION, THE SUPREME COURT WAS ALSO CO NFRONTED WITH AN ARGUMENT WHICH HAD BEEN RAISED ON THE BASIS OF THE PROVISIONS OF SECTION 80-I(6) THAT THE PROFITS OF ONE INDUSTRIAL UNDERTAKING CANNOT BE SET OFF AGAINST THE LOSSES SU FFERED BY THE OTHER INDUSTRIAL UNDERTAKING. THE SUPREME COURT WAS OF THE VIEW THAT THE PROVISIONS OF SECTION 80-I (6) WERE ONLY FOR THE PURPOSES OF COMPUTING THE QUANTUM OF DEDUCTION, WHEREAS THE GROSS TOTAL INCOME WAS TO BE COMPUTED IN TERMS OF THE ACT AS PR OVIDED IN SECTION 80-B(5) . IT IS APPARENT THAT THE SUPREME COURT DISTINGUISHED THE PROVISIONS OF SECTION 80-I(6) WHICH WAS FOR THE PURPOSES OF COMPUTING THE QUANTUM OF DEDUCTION FROM THE PROVISIONS OF SECTION 80-I (1) AND SECTION 80-B(5) WHICH DEAL WITH THE MANNER IN WHICH THE GROSS TOTAL INCOME IS TO BE CONSIDERED. THE SUPREME COURT OBSERVED AS UNDER:- I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 7 '13. ...WHILE COMPUTING THE QUANTUM OF DEDUCTION UN DER SECTION 80-I(6) , THE ASSESSING OFFICER, NO DOUBT, HAS TO TREAT THE PROFITS DERIVED FROM AN INDUSTRIAL UNDERTAKING AS THE ONLY SOURCE OF INCOME IN ORDER TO ARRIVE AT THE DEDUCTION UNDER CH APTER VI-A . HOWEVER, THIS COURT FINDS THAT THE NON OBSTANTE CLA USE APPEARING IN SECTION 80-I(6) OF THE ACT, IS APPLICABLE ONLY TO THE QUANTUM OF DEDUCTION, WHEREAS, THE GROSS TOTAL INCOME UNDER SECTION 80B(5) WHICH IS ALSO REFERRED TO IN SECTION 80-I(1) IS REQUIRED TO BE COMPUTED IN THE MANNER PROVIDED UNDER THE ACT WHICH PRESUPPOSES THAT THE GROSS TOTAL INCOME SHALL BE AR RIVED AT AFTER ADJUSTING THE LOSSES OF THE OTHER DIVISION AGAINST THE PROFITS DERIVED FROM AN INDUSTRIAL UNDERTAKING. IF THE INTE RPRETATION AS SUGGESTED BY THE APPELLANT IS ACCEPTED IT WOULD ALM OST RENDER THE PROVISIONS OF SECTION 80A(2) OF THE ACT NUGATORY AND, THEREFORE, THE INTERPRETATION CANVASSED ON BEHALF OF THE APPEL LANT CANNOT BE ACCEPTED. IT IS TRUE THAT UNDER SECTION 80-I(6) FOR THE PURPOSE OF CALCULATING THE DEDUCTION, THE LOSS SUSTAINED IN ON E OF THE UNITS, CANNOT BE TAKEN INTO ACCOUNT BECAUSE SUB-SECTION (6 ) CONTEMPLATES THAT ONLY THE PROFITS SHALL BE TAKEN INTO ACCOUNT AS IF IT WAS THE ONLY SOURCE OF INCOME. HOWEVER, SECTION 80A(2) AND SECTION 80B(5) ARE DECLARATORY IN NATURE. THEY APPLY TO ALL THE SECTIONS FALLING IN CHAPTER VI-A. THEY IMPOSE A CEI LING ON THE TOTAL AMOUNT OF DEDUCTION AND, THEREFORE, THE NON O BSTANTE 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 T HE 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 HI GH COURT WAS JUSTIFIED IN HOLDING THAT THE LOSS FROM THE OIL DIV ISION WAS REQUIRED TO BE ADJUSTED BEFORE DETERMINING THE GROS S TOTAL INCOME AND AS THE GROSS TOTAL INCOME WAS 'NIL' THE ASSESSE E WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER CHAPTER VI- A WHI CH INCLUDES SECTION 80-I ALSO. 14. THE PROPOSITION OF LAW, EMERGING FROM THE ABOVE DISCUSSION IS THAT THE GROSS TOTAL INCOME OF THE ASSESSEE HAS FIRST GOT TO BE DETERMINED AFTER ADJUSTING LOSSES, ETC., AND IF THE GROSS TOTAL I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 8 INCOME OF THE ASSESSEE IS 'NIL' THE ASSESSEE WOULD NOT BE ENTITLED TO DEDUCTIONS UNDER CHAPTER VI-A OF THE ACT.' (UNDERLINING ADDED) 11. FROM THE ABOVE EXTRACT, IT IS APPARENT THAT THE SUPREME COURT DID NOT AT ALL HOLD THAT WHILE COMPUTING THE DEDUCT ION UNDER SECTION 80-I(6) , THE LOSS OF ONE ELIGIBLE INDUSTRIAL UNDERTAKING I S TO BE SET OFF AGAINST THE PROFIT OF ANOTHER ELIGIBL E INDUSTRIAL UNDERTAKING. ALL THAT THE SUPREME COURT SAID WAS TH AT IN COMPUTING THE GROSS TOTAL INCOME OF THE ASSESSEE, T HE SAME HAS TO BE DETERMINED AFTER ADJUSTING THE LOSSES AND THAT, IF THE GROSS TOTAL INCOME OF THE ASSESSEE SO DETERMINED TURNS OU T TO BE NIL , THEN THE ASSESSEE WOULD NOT BE ENTITLED TO DEDUCTIO N UNDER CHAPTER VI-A OF THE SAID ACT. 12. WE AGREE WITH THE SUBMISSIONS MADE BY THE LEARN ED COUNSEL FOR THE ASSESSEE THAT THERE IS NOTHING IN THE DECIS ION IN THE CASE OF SYNCO INDUSTRIES LTD (SUPRA) WHICH WOULD ENABLE US TO DETRACT FROM THE POSITION INDICATED BY THIS COURT IN DEWAN KRAFT SYSTEMS (SUPRA) AND, AS INDICATED BY US ABOVE. IN FACT, THE SUPREME COURT CLEARLY HELD THAT WHILE COMPUTING THE QUANTUM OF DE DUCTION UNDER SECTION 80-I(6) , THE ASSESSING OFFICER, NO DOUBT, HAS TO TREAT THE PROFITS DERIVED FROM AN INDUSTRIAL UNDERT AKING AS THE ONLY SOURCE OF INCOME OF THE ASSESSEE IN ORDER TO A RRIVE AT A DEDUCTION UNDER CHAPTER VI-A. THE SUPREME COURT ALS O HELD THAT UNDER SECTION 80-I(6) , FOR THE PURPOSES OF CALCULATING THE DEDUCTION, THE LOSS SUSTAINED IN ONE OF THE UNITS I S NOT TO BE TAKEN INTO ACCOUNT BECAUSE SUB-SECTION (6) CONTEMPLATES T HAT ONLY THE PROFITS SHALL BE TAKEN INTO ACCOUNT AS IF IT WAS TH E ONLY SOURCE OF INCOME. 13. THE ABOVE DISCUSSION MAKES IT ABSOLUTELY CLEAR THAT THE SUPREME COURT DECISION SOUGHT TO BE RELIED UPON BY THE LEARNED COUNSEL FOR THE APPELLANT / REVENUE, RATHER THAN DE CIDING THE ISSUE IN FAVOUR OF THE REVENUE, CLINCHES THE MATTER IN FAVOUR OF THE ASSESSEE. IN VIEW OF THE FOREGOING DISCUSSION, THE SUBSTANTIAL QUESTION OF LAW, REFERRED TO ABOVE, IS DECIDED IN F AVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 6. FROM THE IMPUGNED ORDER, IT IS VIVID THAT CIT(A) , FOLLOWING THE DICTA LAID DOWN BY HON'BLE HIGH COURT IN THE CASE CIT VS DEWAN KRAFTS (SUPRA), HELD THAT I.T.A. NO. 6621/D/2013 ASSESSMENT YEAR: 2009-10 9 QUANTUM OF DEDUCTION U/S 80IA(J) OF THE ACT IS TO B E COMPUTED ON ELIGIBLE UNIT AS IF ELIGIBLE UNIT WAS THE ONLY SOURCE OF INCOME O F THE ASSESSEE. IN THE CASE OF CIT VS SONA KOYO STEERING SYSTEMS LTD. (SUPRA), THE IR LORDSHIPS ALSO EXPRESSED THE SIMILAR VIEW WHICH SUPPORTS THE CONCLUSION OF T HE FIRST APPELLATE AUTHORITY. FINALLY, WE REACH TO A LOGICAL CONCLUSION THAT THE CIT(A) GRANTED RELIEF TO THE ASSESSEE ON VALID REASONS AND BY RIGHTLY FOLLOWING DICTA LAID DOWN BY HON'BLE HIGH COURT IN THE CASE OF CIT VS DEWAN KRAFTS (SUPR A) AND WE ARE UNABLE TO SEE ANY VALID REASON TO INTERFERE WITH THE SAME. ACCOR DINGLY, GROUNDS NO. 1 AND 2 OF THE REVENUE ARE DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE FAILS. ORDER PRONOUNCED IN THE OPEN COURT ON 8.12.2015. SD/- SD/- ( J.S. REDDY ) ( C.M. GARG ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 8TH DECEMBER, 2015 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSTT. REGISTRAR