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2024 (12) TMI 764 - AT - Income TaxEnhancement of income done by the ld. CIT(A) - loss should have been adjusted from exempt income of the Daman Units - Section 80IB deductions in light of the losses incurred by one unit - HELD THAT - CIT(A) was of the firm belief that such loss from priority undertaking should have been set off against the profits from other priority undertaking at Daman Unit-II or III. The stand of the assessee was that it was not necessary that loss of one industrial undertaking should necessarily be adjusted against the profit of another eligible industrial undertaking. In support strong reliance was placed on the decisions of CIT vs. Dewan Kraft System (P.) Ltd. 2007 (2) TMI 149 - DELHI HIGH COURT CIT(A) was of the opinion that the decision of Synco Industries Limited 2008 (3) TMI 13 - SUPREME COURT squarely applies on the facts of the case in hand wherein the Hon ble Supreme Court has emphatically ruled that the assessee s contention that the profits derived from one industrial undertaking cannot be set off against the loss suffered from another industrial undertaking in view of Section 80-I(6) has no merits. CIT(A) observed that the Hon ble Supreme Court upheld that loss from the oil division of the assessee was required to be adjusted against the profits of the chemical division. CIT(A) further observed that the principle decided in the case of Dewan Kraft System (P.) Ltd. 2007 (2) TMI 149 - DELHI HIGH COURT was considered and not approved by the Hon ble Supreme Court in the case of Synco Industries Ltd. (supra). Drawing support from the decision of the Hon ble Supreme Court (supra) the ld. CIT(A) was of the firm belief that the assessee was bound to set off the loss from one priority undertaking at Daman against profit from another priority undertaking at Daman. In our understanding the Hon ble Supreme Court was seized with the question whether a person is eligible for deduction under Chapter-VIA when the gross total income of the assessee is determined as Nil. The Hon ble Supreme Court was of the opinion that if the gross total income of the assessee is Nil there is no question of any deduction being allowed under Chapter VIA in computing the total income. This view has been followed by the Hon ble High Court wherein the High Court has also taken the view that deduction under Chapter VIA would be available only if the computation of gross total income as per the provisions of the Act after setting off carried forward and unabsorbed depreciation of earlier years is not Nil. The chart exhibited elsewhere clearly shows that in all the captioned assessment years under consideration the assessee had positive gross total income from which it claimed deduction under Chapter VIA u/s 80I of the Act in respect of eligible profits of Daman Units. In our considered opinion the facts are totally distinguishable. We are of the considered view that enhancement done by the ld. CIT(A) is not correct and deserves to be set aside. The AO is directed to delete the impugned additions - Decided in favour of assessee.
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