Income Tax Appellate Tribunal - Delhi
Grave Applicances (P) Ltd., New Delhi vs Department Of Income Tax
IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH "C" NEW DELHI)
BEFORE G.E. VEERABHADRAPPA, HON'BLE VICE-PRESIDENT
AND SHRI RAJPAL YADAV: HON'BLE JUDICIAL MEMBER
I.T.A. No. 2610/Del/2010
Assessment Year: 2006-07
Deputy Commissioner of IT, Vs. M/s. Gravs Appliances (P) Ltd.
Circle 12(1), Padma Tower-II,
New Delhi. Rajendra Place, New Delhi-02
(Appellant) (Respondent)
Appellant by: Shri Rajni Kant Gupta, Sr.DR
Respondent by: Shri Sanjeev Jain, CA
ORDER
PER RAJPAL YADAV: JUDICIAL MEMBER The revenue is in appeal before us against the order of Learned CIT(Appeals) dated 02.03.2010 passed for assessment year 2006-07. The solitary issue involved in this appeal is whether deduction under section 80- IC would be computed only taking into consideration the eligible profit of the unit located in Baddi in Himachal Pradesh.
2. The brief facts of the case are that the assessee has filed its return of income on 28.11.2006 declaring a loss of Rs.45,89,625. The case of the assessee was selected for scrutiny assessment by issuances of a notice under sec. 143(2) of the Act which was duly served upon the assessee. In response to the notice Shri Pawan Batra, CA appeared from time to time and submitted the requisite details. The assessee was maintaining three sets of 2 accounts, (i) for manufacturing unit at Delhi; (ii) for the trading units at Delhi; and the (iii) manufacturing unit for Baddi. At Baddi, it is manufacturing electrical home appliances. It is entitled for deduction under section 80-IC. The assessee while computing the deduction admissible under section 80-IC did not make adjustment of the losses suffered at Delhi. It has computed the deduction admissible under section 80-IC exclusively from the eligible profit of Baddi Unit. The case of the Assessing Officer is that profit of the whole undertaking has to be computed and thereafter deduction, if any, admissible under section 80-IC is to be granted.
3. On appeal, the Learned CIT(Appeals) has held that profit of each unit can be computed separately and deduction under sec. 80-IC be granted on the profit of eligible unit. Learned CIT(Appeals) directed the Assessing Officer not to adjust the losses of Delhi Unit against the profit of Baddi Unit while computing the deduction admissible under section 80-IC. For such conclusion, Learned CIT(Appeals) has relied upon the decision of Hon'ble jurisdictional high court rendered in the case of Dewan Kraft System (P) Ltd. reported in 210 CTR(Del) 124.
4. The learned counsel for the assessee at the very out set submitted that the issue in dispute is squarely covered by the decision of Hon'ble Delhi High Court in the case of Dewan Kraft Systems (P) Ltd. as well as in the 3 case of CIT vs. Sona Koyo Sterling System Ltd. rendered on 10.2.2010 and reported in 230 CTR 251. Learned DR was unable to controvert the contentions of the learned counsel for the assessee.
5. We have duly considered the rival contentions and gone through the record carefully. Hon'ble Delhi High Court, vide its order dated 10.2.2010, has disposed of appeals for assessment years 1992-03 to 1995-96 and 2000- 01 in the case of Sona Koyo Sterling Systems Ltd. In that case, the issue relates to computation of deduction admissible under section 80I of the Act. Hon'ble High Court has considered the meaning of gross total income as explained in section 80-B(5) of the Act as well as the conditions enumerated in sub-section (6) of section 80IA of the Act. The Hon'ble Court has also considered its earlier decision in the case of Dewan Kraft Systems (P) Ltd. wherein section 80-IA(5) and (7) were considered. Hon'ble Court has held that sub-section (6) of section 80-I begins with a non-obstante clause, according to this section the quantum of deduction is to be computed as if the industrial undertaking were the only source of income of the assessee during the relevant years. While explaining the provisions, Hon'ble Court has observed that in other words, each industrial undertaking or unit is to be treated separately and independently. This was observed because deduction under section 80IA would be admissible only in those units and industrial 4 undertaking which have a profit or gain. In sub-section (7) of section 80IC, it has been provided that provisions contained in sub-section (5) and sub- sections (7) to (12) of section 80-IA shall, so far as may be, applied to the eligible undertaking or enterprises under this section, meaning thereby that same provision would be applicable in section 80-IC of the Act. Hon'ble Delhi High Court in the case of Dewan Kraft Systems (P) Ltd. and Sona Koyo (supra) has held that each unit will be considered independently. In view of the above, we are of the opinion that Learned First Appellate Authority has rightly applied the ratio of Hon'ble Delhi High Court and has rightly directed the Assessing Officer not to adjust the losses of Delhi Unit while computing the eligible profit in respect of Baddi Unit for granting deduction under section 80-IC of the Act. No other issue was agitated before us. Hence, the appeal of the revenue is dismissed.
6. In the result, the appeal of the revenue is dismissed.
Decision pronounced in the open court on 08.10.2010 ( G.E. VEERABHADRAPPA) ( RAJPAL YADAV ) VICE-PRESIDENT JUDICIAL MEMBER Dated: 08/10/2010 Mohan Lal 5 Copy forwarded to:
1) Appellant
2) Respondent
3) CIT
4) CIT(Appeals)
5) DR:ITAT ASSISTANT REGISTRAR