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Commissioner of Income Tax, Hisar Versus M/s Parkash Industries Ltd.

2015 (12) TMI 625 - PUNJAB & HARYANA HIGH COURT

Deductions under Section 80HH and 80I - non adjusting the losses of other loss making industrial undertakings of the same assessee with the profit of eligible profit making units as directed by ITAT - Held that:- In Bajaj Motors P. Limited's case (2011 (3) TMI 475 - PUNJAB AND HARYANA HIGH COURT ), identical issue was considered by this Court. In the said case, the assessee manufactured automobile parts at Gurgaon. It was entitled to deduction under section 80I of the Act. The Assessing Officer .....

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er independent unit No.2 should be set off against the profits of unit No.1 - Decided in favour of the revenue - ITA No. 290 of 2004 - Dated:- 24-9-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr Tajender K Joshi, Adv For the Respondents : Mr Anand Chhibbar, Sr Adv. with Ms Riya Bansal, Adv ORDER Ajay Kumar Mittal, J. 1. This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 8.3.2 .....

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her loss making industrial undertakings of the same assessee with the profit of eligible profit making units?" 2. A few facts relevant for the decision of the controversy involved as narrated in the appeal may be noticed. The assessee company claimed deduction under sections 80HH and 80I of the Act at ₹ 1,09,43,158/- and ₹ 1,36,78,948/- respectively. During the course of assessment proceedings, it was noticed by the Assessing Officer that the assessee company had six industrial .....

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(A)]. Vide order dated 30.12.1994, Annexure A.II, the CIT(A) partly allowed the appeal. The revenue went in appeal before the Tribunal. Vide order dated 8.3.2002, Annexure A.III, the Tribunal dismissed the appeal. Hence the instant appeal by the revenue. 3. We have heard learned counsel for the parties. 4. Learned counsel for the revenue relied upon judgment of this Court in Bajaj Motors P.Limited vs. Commissioner of Income Tax, (2012) 347 ITR 472 to submit that the issue stands concluded in fav .....

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nto account the loss, if any. This view was upheld by the CIT(A) as well as the Tribunal. This Court while dismissing the appeal of the assessee held that in computing the quantum of deduction under section 80I of the Act, out of the profits and gains of unit No.1, the loss incurred in another independent unit No.2 should be set off against the profits of unit No.1. It was recorded as under:- "5. Learned counsel for the assessee submits that for computing the benefit admissible under Sectio .....

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counsel for the revenue, however, submits that component of benefit under Section 80-I has to be worked out with reference to total income after excluding the loss therefrom as provided under Section 80AB read with Sections 80A(2) and 80B(5).Reliance has been placed upon the following judgments:- (i) Distributors (Baroda) P. Ltd. Vs. Union of India (1985) 155 ITR 120 (SC);(ii) H.H.Sir Rama Varma Vs. Commission of Income-Tax (1994) 205 ITR 433 (SC);(iii) Commissioner of Income-Tax Vs. Macmillan .....

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uot; "80A(2) The aggregate amount of the deductions under this Chapter shall not, in any case, exceed the gross total income of the assessee." xxx xxx xxx "80AB Where any deduction is required to be made or allowed under any section included in this Chapter under the heading "C-Deductions in respect of certain incomes" in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anythi .....

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e with the provisions of this Act, before making any deduction under this chapter." xxx xxx xxx "80-I (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 repairs to ocean-going vessels or other powered craft 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 a .....

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h deduction is permissible under Section 80-I is gross total income which is defined in Section 80B(5) and is also referred to in Sections 80A(2) and 80AB. In Distributors (Baroda) the said provisions were so interpreted, which was also followed in H.H.Sir Rama Varma. Judgment in Canara Workshops does not refer to Section 80AB. As observed by Madras High Court in Macmillan Co.of India Ltd. if component of deduction under Section 80-I is to refer total income without excluding the loss therefrom, .....

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ure of alloy Steels (a priority industry) could not be set off against the profits of the manufacture of another product. The assessment year considered in that case was the year 1966-67. The Court, in the course of its judgment did not refer to Section 80AB of the Act and did not consider the effect of that provision as to whether it was declaratory or not, while the question was specifically considered by the Supreme Court in the case of H.H.Sir Rama Varma V,CIT (1994) 205 ITR 433. We are boun .....

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