- (1.) This appeal has been preferred by the assessee under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), against the order dated November 25, 2002, passed by the Income-tax Appellate Tribunal, Delhi Bench "C", New Delhi, in I.T.A. No. 246/Del/1998, for the assessment year 1994--95, claiming the following substantial question of law : (i). Whether, under the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that in computing the quantum of deduction under section 80I of the Income-tax Act, 1961, 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 ? The assessee manufactures automobile parts at Gurgaon. It is entitled to deduction under section 80I of the Act. The Assessing Officer while computing the same took into account loss of the assessee in another manufacturing unit. It was held that the benefit under section 80I was referable to total income which was required to be worked out after taking into account the loss, if any. This view has been upheld by the Commissioner of Income-tax (Appeals) as well as the Tribunal. The Tribunal observed as under : We have carefully consider the rival submissions and gone through the various judicial pronouncements cited before us. In our considered view, section 80AB of the Income-tax Act, 1961, which contains the non obstante clause reading 'notwithstanding anything contained' clearly expressed the legislative intention that the section would have the overriding effect over any other provision which may be in conflict with the same. A non obstante clause is a legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in the same enactment or some other enactment. In view of the stipulation contained in section 80AB, one thing which emerges clearly is that the mode of computation as indicated in section 80AB has full application to the case relating to section 80I overriding any other provision contained in Chapter VI-A including section 80I. This section clearly provides that deductions under any section included in Chapter VI-A is to be made with reference to the income which is included in his gross total income. The expression 'gross total income', as defined under section 80B(5), means the total income computed in accordance with the provisions of the Act before making any deduction under this Chapter. Thus, the entire scheme for computing deduction in Chapter VI envisages that first gross total income would be computed by applying the provisions of the Act and on the total income so arrived at deduction under Chapter VI-A would be computed. Thus, section 70 which provides for set off of loss under any head from one source against income from any other source under the same head would be given effect to while computing the gross total income. On the basis of the aforesaid provisions, loss of unit No. 2 would be set off against profits of unit No. 1 and on the total income so arrived at deduction under section 80I would be worked out. The view taken by the learned Commissioner of Income-tax (Appeals) is thus contrary to the express provisions of section 80AB, section 80B(5) and cannot be sustained.
(2.) We have heard learned counsel for the parties.
(3.) Learned counsel for the assessee submits that for computing the benefit admissible under section 80I, loss in another unit could not be taken into account. Reliance has been placed on the judgment of the hon'ble Supreme Court in CIT v. Canara Workshops P. Ltd., 1986 161 ITR 320 which has been followed in CIT v. Siddaganga Oil Extractions Pvt. Ltd., 1993 201 ITR 968 and CIT v. Visakha Industries Ltd., 2001 251 ITR 471. Learned counsel for the assessee also relies upon CIT v. Devidayal Rolling Refineries P. Ltd.,1984 40 CTR(Bom) 191.;