Medley Pharmaceuticals Ltd Vs DCIT (ITAT Mumbai)
ITAT Mumbai held that each industrial undertaking or unit is to be treated separately and independently. Thus, loss of one industrial undertaking cannot be set off against the profit of another industrial undertaking to arrive at a computation of the quantum of deduction under section 80-IB of the Income Tax Act.
Facts- The present appeal is preferred by the assessee. Notably, CIT(A) was of the firm belief that such loss from priority undertaking should have been set off against the profits from other priority undertaking at Daman Unit-II or III. The stand of the assessee was that it was not necessary that loss of one industrial undertaking should necessarily be adjusted against the profit of another eligible industrial undertaking.
Conclusion- Held that it is also clear that in view of section 80-I(6), which begins with a non obstante clause, 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. In other words, each industrial undertaking or unit is to be treated separately and independently. It is only those industrial undertakings, which have a profit or gain, which would be considered for computing the deduction. The loss making industrial undertaking would not come into the picture at all. The plain reading of the provision suggests that the loss of one such industrial undertaking cannot be set off against the profit of another such industrial undertaking to arrive at a computation of the quantum of deduction that is to be allowed to the assessee under section 80-I(1) of the said Act.
