TMI Blog2015 (10) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... a specific query to the parties as to whether or not the hon'ble jurisdictional high court has decided this substantial question of law. The reply received is in negative. We proceed further and notice that hon'ble Allahabad high court hereinabove has considered case law of Synco (2008 (3) TMI 13 - Supreme court ) and observes that two principles of law emerged therefrom. The first one is that for the purpose of computing gross income, losses of other units are to be taken into consideration. The second one is that the very course is not to be adopted whilst computing section 80HHC/80I deductions and the profits are to be considered as if the same are the only source of income of that unit. The Revenue fails to quote any distinction on fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the parties up to the tribunal. The assessee claims section 80HHC and 80I deductions without adjusting losses of its other divisions. The Assessing Officer quoted case law of hon'ble apex court in Synco Industries vs. Assessing Officer [2008] 299 ITR 444 (SC) and amendment in section 80A by the Finance Act, 2009 for observing that its gross income is to be computed after adjusting losses of other divisions against profit derived from the eligible undertaking. 4. The CIT(A) upholds Assessing Officer's action as under: 3. In the second ground, it is submitted by the appellant that in law and in facts and circumstances of the case, the ld. A.O. has grossly erred in holding that deduction u/s. 80I and 80HH should be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it derived from Industrial Undertaking. Relevant portion of section 80HH and 80I is as under :- 80HH. (1) where the gross total income of an assessee includes any profits and gains derived from the industrial undertaking, or the business of a hotel, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent thereof. 80I (1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel [or the business of repaids to ocean-going vessels or other powered c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (P) Ltd. reported in 113 ITD 209 has interpreted the decision of Hon'ble Supreme Court in the case of Canara Workshop. Ltd. and after detailed discussion Hon'ble Tribunal held that deduction u/s.80l should be allowed on the profits of the undertaking without setting off of loss of another undertaking. The gist of the said decision is enclosed Annexure 'H Hence, in the circumstances, it is submitted that loss of another division should not be set off against profits of the undertaking eligible for deduction u/ss. 80HH and 80I of I. T. Act. D) With regard to the amendment u/s. 80A by the Finance Act, 2003 is of no consequence. i) Firstly, it is submitted that there is double deduction is not allowed. Deduction u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gross total income of the assessee has first got to be determined after adjusting losses etc., and if the gross total income of the assessee is NIL the assessee would not be entitled to deductions under Chapter VI-A of the Act. The Honble Supreme Court has discussed provisions of section 80I(6) and 80IA also but those discussions were made in reference to the scope of section 80IA vis-a-vis sections 80A(2) and 80B(5). The concluding para of the order of Hon'ble Supreme Court as reproduced above makes it clear. Thus the Hon'ble Supreme Court made certain observations with reference to section 80IA and 80I(6) but the same is interpreting these sections in a very limited manner and in a different context In view of this, I fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /80I deductions and the profits are to be considered as if the same are the only source of income of that unit. The Revenue fails to quote any distinction on facts or law. Therefore, we accept the assessee's legal submission on first aspect of the matter. We come to objection of the lower authorities on applicability of section 80A amendment (supra) and find that the same is only introduced by the Finance Act, 2009 with retrospective effect from 1.4.2003 and does not deal with the relevant issue of adjustment of losses. We further reiterate that the impugned assessment year is 1991-92. The assessee's sole substantive ground accordingly succeeds. 6. This assessee's appeal is allowed. Pronounced in the open Court on this the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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