CIT Vs. GRAVS APPLIANCE PVT LTD

JUDGEMENT

(1.) THE Revenue, in this appeal, seeks to urge the following question of law: -

(2.) THE Assessee had owned three units; two of them located in Delhi and the third at Baddi, Himachal Pradesh. The latter was eligible for benefit under Section 80 IC of the Income Tax Act. For the relevant period i.e. AY 2006-07, the assessee declared a loss of Rs. 45,89,621/- in respect of its two Delhi units. In respect of the Baddi unit, it claimed deduction under Section-80IC on the computed profit of Rs. 86,76,687/-. The Assessing Officer adjusted the losses of the Delhi units against the profits of the Baddi unit and arrived at profit eligible for deduction under Section 80 IC at Rs. 40,44,824/- The assessee carried the matter in appeal; the appeal was accepted by the CIT (A) who applied decisions of this Court including CIT v. Dewan Kraft Systems P. Ltd., 297 ITR 305. The Revenue's appeal to the ITAT was dismissed by the impugned order. The relevant reasoning of the ITAT is as follows: -

(3.) AS regards the question whether the assessee can carry forward the losses of the Delhi units, the matter is to be considered appropriately by the Assessing Officer. We express no opinion on the question as it does not arise out of the order of the Tribunal. However, it is clarified that the deduction cannot exceed the gross total income computed by the A.O. in this case, in view of Section-80A (2).