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2016 (7) TMI 331 - GUJARAT HIGH COURT

2016 (7) TMI 331 - GUJARAT HIGH COURT - TMI - Deduction u/s 80HHC and 80I allowed without adjusting loses of its other division - Held that:- Allahabad High Court in the case of Commissioner of Income-Tax and another vs. Modi Xerox Ltd. [2010 (4) TMI 858 - Allahabad High Court] wherein two principles of law emerge one for the purposes of computation of gross total income the losses of other units are to be taken into account but for the purposes of calculating the deduction of industrial underta .....

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Officer, no doubt, has to treat the profits derived from an industrial unit as the only source of income in order to arrive at a deductions under chapter VI. It was further observed that section 80I(6)deals with actual computation of deduction whereas section 80I deals with treatment to be given to such deductions in order to arrive at total income of the assessee and therefore, while interpreting section 80I(1) as also the gross total income, one has to read expression “gross total income” as .....

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einforces that such deduction has to be computed as if the unit was an isolated industry. However, thereafter while computing gross total income, even the loss has to be accounted for and only if the income is positive, can the assessee claim deduction for its profit making eligible industry. - Decided against revenue - TAX APPEAL NO. 360 of 2016 - Dated:- 30-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE MR NITIN K MEHTA, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KUR .....

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(2008) 299 ITR 444(SC)? (c) Whether the Hon'ble ITAT has erred in law and on facts by not appreciating that in the order passed under section 143(3) read with section 254 of the Act the AO has followed the direction given by the ITAT in its order dated 191.12.2008 while setting aside the issue to the file of the AO? 2. Briefly stated the facts are as under: For the assessment year 1991-92, the return of income filed by the respondent assessee upon remand by the Tribunal came up for considera .....

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division which was adjusted by the Assessing Officer against the deductions. According to CIT(Appeals), the approach of the Assessing Officer was in tune with the decision of the Supreme Court in the case of Synco Industries Ltd. vs. Assessing Officer (Income-Tax) and another reported in 299 ITR 444. The assessee carried the matter in appeal before the Tribunal. The Tribunal relied on the decision of Allahabad High Court in the case of Commissioner of Income-Tax and another vs. Modi Xerox Ltd 34 .....

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the case of Synco Industries Ltd. (supra). He also drew our attention to the judgment of the Division dated 2.7.2013 in the case of Sintex Industries Ltd. vs. Assistant Commissioner of Income Tax rendered in Tax Appeal No.261 of 2012 to contend that the course adopted by the Tribunal is erroneous and the views of the Assessing Officer and CIT(Appeals) were correct. 4. Before adverting to the decisions relied upon by Shri Mehta, we may recall, the Supreme Court in the case of Liberty India vs. Co .....

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cts the incentives under section 80-IA/80IB is the generation of profits. It was further observed that sections 80-IB and 80-IA are a code by themselves as they contain both substantive as well as procedural provisions. 5. In the case of Commissioner of Incometax( Central) Madras vs. Canara Workshops P.Ltd. Reported in 161 ITR 320, in the context of deductions provided under section 80E of the Act, the Supreme Court held that the merit earned by one industry not to be lost or diminished for loss .....

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ts claim to the deduction under section 80E. 6. In this context, Allahabad High Court in the case of Commissioner of Income-Tax and another vs. Modi Xerox Ltd. (supra) found that the assessee was a multi-unit company carrying on three different activities and had three separate units for such activities. Two of these units were profit making units and the third was a loss making unit. Qua the profit making unit, the assessee had claimed deduction under section 80HH and 80I of the Act. With this .....

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0HH and 80-I of the Act. After becoming eligible to claim the deduction, the question for consideration is that whether deduction is eligible to the income derived to each industrial undertaking independently or on a consideration of losses suffered by the service unit. Sections 80HH and 80-I of the Act contemplate the deduction from the income derived by the undertaking. The Commissioner of Income-tax (Appeals) has rightly held that income of the undertaking shall be calculated on a considerati .....

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bstante clause 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) of the Act is required to be computed in the manner provided under the Act which presupposes that the gross total income shall be arrived at after adjusting the losses of the other division against the profits derived from an industrial undertaking. The apex court further held that under section 80- .....

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deduction of industrial undertaking, the loss sustained in another unit cannot be taken into account and only the profit shall be taken into account as if it was the only source of income of that unit. In this view of the matter, we are of the view that there is no error in the order of the Tribunal. 7. We respectfully agree with the view expressed by Allahabad High Court. This view is not in conflict with the decision of the Supreme Court in the case of Synco Industries Ltd. (supra). In such ca .....

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r section 80I, the Supreme Court observed that while computing quantum of deduction under section 80I(6), the Assessing Officer, no doubt, has to treat the profits derived from an industrial unit as the only source of income in order to arrive at a deductions under chapter VI. It was further observed that section 80I(6)deals with actual computation of deduction whereas section 80I deals with treatment to be given to such deductions in order to arrive at total income of the assessee and therefore .....

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