Cit vs Dewan Kraft System (P) Ltd. on 30 July, 2007
"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 year s. 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 undertaking which
have a profit or gain. In sub-section (7) of section 80IC, it has
ITA-745/2011 Page 2
been provided that provisions contained in sub-section (5) and
subsections (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.