Profit / losses of all undertakings are to be treated separately while calculating deduction u/s 80IC

Milestone Gears Private Limited Vs ACIT (ITAT Chandigarh)

For the purpose of calculating deduction u/s 80IC, profit of each undertaking should be treated separately and losses from other eligible undertaking should be ignored. Profit and losses of all the eligible undertaking couldn’t be netted off.

Facts –-

Assessee is engaged in the manufacturing of automotive gears and have 5 manufacturing units. Unit I, III, IV and V are eligible for deduction u/s 80IC. Assessee had claimed deduction u/s 80IC in respect of profits earned in Unit-I and Unit-III ignoring the losses of Unit-IV and Unit-V.

AO contended that the assessee was entitled only to the net profits of the eligible undertakings for the purpose of calculating quantum of deduction available u/s 80IC and accordingly netted the same and allowed the deduction thereafter.

However, assessee contended that deduction was to be computed only on the profits and gains derived from the industrial undertaking to which the benefit was granted and was not relatable to the gross total income.

Held –

The words used in section 80IC categorically state that the provisions of sub section 5 to section 80IA shall apply to the eligible undertaking or enterprise, they have to be read as such and applied to each undertaking, meaning thereby that the profits of each eligible undertaking has to be treated as if it were the only source of income of the assessee.

FULL TEXT OF THE ITAT JUDGEMENT

All the three appeals filed by the same assessee have been preferred against the consolidated order passed by the Ld. Commissioner of Income Tax(Appeals), Shim la (hereinafter referred to as ‘CI T(Appeals)’) dated 30.3.2017 relating to assessment years 2010-11, 2011-12 and 2012-13.

It was common ground that the issues involved in all the appeals were identical, they were therefore heard together and are being decided by this consolidated order. For the sake of convenience we shall be taking up the appeal of the assessee in ITA No.883/Chd/2017 for assessment year 2010-11 for adjudication and the decision rendered therein shall apply mutatis mutandis to the rest of the appeals also.

ITA No.883/Chd/2017 (A.Y. 2010-11):

2. Brief background relating to the case is that the assessee company is engaged in the manufacturing of automotive gears and has five manufacturing units, namely;

• Unit-I at plot No.58, Sector 1, Parwanoo,
• Unit-II at KK-II, 12, 16 & 16 HPSIDC, Indl. Estate Kalka,
• Unit-III at Plot No.8, Industrial Area Barotiwala,
• Unit-IV at Opposite Himachal Fibre Ltd., Industrial Area Barotiwala and
• Unit-V at Plot No.22-24, Sector-1, Industrial Area, Parwanoo.

Unit-I, III, IV and V were eligible for deduction u/s 80IC of the Act. The assessee had claimed the said deduction but the A.O. found that in respect of unit III the assessee having already claimed deduction @ 100% for the first five years, had again claimed deduction @ 100% on account of substantial expansion carried by it, though, as per the AO ,it was entitled to only 30% thereafter as per the Act. The A.O. accordingly restricted the deduction claimed by the assessee in such unit to 30% of the eligible profits. Moreover the A.O. also found that while the eligible undertakings had earned both profits and losses the assessee had claimed deduction vis-à-vis profits earned by the eligible undertakings without setting off the losses of the other eligible undertakings. The A.O. held that the assessee was entitled only to the net profits of the eligible undertakings for the purpose of calculating quantum of deduction available u/s 80IC and accordingly netted the same and allowed deduction thereafter. The said action of the A.O. was upheld by the Ld. CIT(A).

3. Against the order of the Ld. CIT(A) the assessee has come up in appeal before us. During the course of hearing before us the Ld. counsel for assessee first took up grounds raised relating to restriction of deduction claimed u/s 80IC for Unit III to 30% of the eligible profits, as against 100% claimed by the assessee on account of substantial expansion undertaken. The said grounds, being ground Nos.2 and 3 read as under:

“2. As per facts and circumstances of the case and provisions of law, the Commissioner of Income Tax (Appeals) has erred in upholding the action of the assessing officer in respect of not considering the year of substantial expansion of Unit III as the initial assessment year for deduction u/s 80IC.As per law the allowance @100% u/s 80IC be considered from the year in which the substantial expansion was done.

3. As per facts and circumstances of the case and provisions of law, the Commissioner of Income Tax (Appeals) has erred in upholding the action of the assessing officer in respect of restricting the deduction u/s 80IC @ 30% at Rs.1,43,38,894/- against the claim of Rs.5,31,56,414/-. The claim of assessee u/s 80IC be allowed.

4. As stated above four units/undertakings of the assessee were eligible for deduction u/s 80IC with respect to which the assessee had claimed deduction as under:

5. With respect to Unit-III the A.O. found that the assessee had already claimed deduction u/s 80IC to the extent of 100% of the profits, for five years period starting from assessment years 2005-06 to 2009-10 and the assessee had again claimed 100% deduction in the impugned year which was 6t h year of production by claiming to have carried out substantial expansion in financial year 2007-08 relevant to assessment year 2008-09. The A.O. held that the assessee was eligible for deduction u/s 80IC of the Act in respect to the said undertaking only @ 30% as per law and accordingly restricted the deduction claimed to 30% of the eligible profits. The CIT(A) upheld the order of the A.O. following the decision of the ITAT Chandigarh Bench in the case of Hycron Electronics Vs. ITO in ITA No.798/Chd/2012 and other related cases.

6. Before us the Ld. counsel for assessee fairly conceded that the issue was now settled and covered against the assessee by the decision of the Hon’ble Apex Court in the case of CIT Vs. M/s Classic Binding Industries & Others in Civil Appeal No.7208 & Others of 2018 dated 20..8.2018.

7. In view of the above we find no reason to interfere in the order of the CIT(A) and ground Nos.2 and 3 raised by the assessee are, therefore, dismissed.

8. Thereafter the assessee took up Ground No.1 before us challenging the action of the CIT(A) in upholding the order of the A.O. with respect to netting of profits and losses of the eligible units of the assessee for the purpose of calculating deduction u/s 80IC of the Act.

9. Briefly stated the assessee had claimed deduction u/s 80IC in respect of the profits earned in Unit-I and Unit-III ignoring the losses of Unit-IV and Unit-V. The A.O. relying on the decision of the Hon’ble High Court of Himachal Pradesh in the case of CIGT, Shimla Vs. Him Teknoforge Ltd. in ITA Nos. 36,37 & 38 of 2008 set off all losses of the eligible unit i.e. Units IV & V against the eligible profits of Units I & III, before allowing deduction u/s 80IC of the Act. The CIT(A) upheld the order of the A.O. stating that it is squarely covered by the decision of the Hon’ble Jurisdictional High Court.

10. Before us, the Ld. counsel for assessee vehemently contested the applicability of ratio laid down by the Hon’ble Jurisdictional High Court in the case of Him Teknoforge Ltd. (supra) in the present case raising two fold arguments. The first argument raised by the Ld. counsel for assessee was that the decision in the case of Him Teknoforge Ltd. (supra) was rendered in the context of section 80IA of the Act which is markedly worded differently from section 80IC in which the assessee in the present case has claimed deduction. It was pointed out that while section 80IA (5), which is relevant for the impugned issue and which has been interpreted by the Hon’ble Jurisdictional High Court to mean that the profits and losses of all eligible units are to be clubbed for the purpose of withdrawing deduction uses the term eligible “business”, section 80IC on the other hand, uses the term eligible “undertaking or enterprises”. It was, therefore, contended that the provisions of section 80IC(7), which states that the provisions of section 80IA(5) shall apply to section 80IC undertaking or enterprises has to be restricted to the undertakings only and the deduction is, therefore, undertaking specific u/s 80IC and not business specific and, therefore, deduction is to be allowed. The provisions of section 80IC(7) of the Act have to be read with respect to each eligible undertaking only and ratio laid down in the case of Him Teknoforge Ltd. (supra) being eligible business specific would, therefore, not apply in the present case. The second contention raised by the Ld. counsel for assessee was that by applying the ratio laid down in Him Teknoforge Ltd. (supra) to 80IC unit, it would lead to an anomalous situation. It was pointed out that section 80IC provides for graded deduction i.e. 100% of the eligible profits for first five years and 30% for remaining five years, for unit set up in specified areas and if the profits and losses of all units are clubbed, where the rates of deduction of different units are different, it would be difficult to determine the rate to be applied on the eligible profits remaining after setting off of profits and losses of all eligible units. The Ld. counsel for assessee filed his arguments in writing in this regard as under:

“Arguments :

a. The issue of clubbing of profits and losses of eligible industrial undertaking has been considered solely on the interpretation of the judgment in the aforementioned case of Him Techno forge Ltd.

b. At the outset it is clarified that the concept of priority units which is considered in the above judgment may be there in 80HH but it is certainly not there and not envisaged under section 80IC. Rather 80IC (7) reads as under:

The provisions contained in Sub-section (5) and sub-section (7) to (12) of Section 80IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section.

Section 80IA(5) clearly specifies that:

Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of subsection (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.

c. The eligible business concept is there in Section 80IA but in 80IC sub section (7) clearly states that the provisions contained in Sub-section 5 and sub-section 7-12 of Section 80IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section. Eligible Undertaking is defined in section 80IC(4) which relates to the under taking only . Hence so far as the deduction is concerned the same is considered relating to the undertaking. This contention is further supported by the fact that if there is loss the same will be carried forward and set off in subsequent year against the profits of the respective unit and then the deduction under chapter VI-A will be computed or if one unit is set up in one year and other unit is set up in other year, the period of allowance and quantum of deduction may be different for each year i.e. in one unit the deduction may be 100% and on other it may be 30%, then if the clubbing is done which date will be reckoned for the determination of rate whether it is 100% or 30%. This will certainly give rise to a bigger anomaly. The clubbing may be possible in the case of export profits u/s 80HH or eligible business under section 80IA where the rates are same but it is certainly not possible in the case of industrial undertaking u/s 80IC where the rates of deduction may be different for different industrial undertaking in the same year.

d. Besides the above, the salient feature of the afore mentioned judgment are under:

In the captioned judgment – three ratios have been laid down :

i. While calculating the Gross Total Income – the profit/loss of non priority units be taken.

The assessee company has considered the same while computing the Gross Total Income – Refer to the Computation of Total Income.

ii. While calculating the deduction under Chapter VI A only the profits or loss of priority income shall be taken.

The assessee company has considered the profits of the eligible industrial undertaking in terms of section 80IC(7) which mentions that the concept of eligible business under section 80IA needs to be applied to the eligible undertaking or enterprise. Further the losses were to be carried forward for eligible industrial undertaking which has incurred losses for set off against the profits of that undertaking in terms of section 80IA(5) as mentioned hereinabove and repeated as below:

801A(5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business (to be replaced by industrial undertaking in terms of section 80IC(7)) to which the provisions of sub-section (I) apply shall for the purposes of determining the quantum of deduct/on under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.

iii. The deduction cannot exceed the Gross Total Income.

In the case of the assessee company the deduction is not exceeding the Gross Total Income.

e. Considering the above arguments it is very clear that what is considered in Section 80IC is the profits of eligible undertaking or enterprise independently for the purposes of determining quantum of deduction and not to be clubbed with loss making industrial undertaking whereas for the purposes of Gross Total Income all the units need to be clubbed.

f. In the case of AA/s. Synco Industries Ltd., Petitioner Vs. Assessing Officer, Income Tax, Mumbai & Anr., Respondent. 2008-(1 68)-TAXMAN-0224-SC, 2008-(299)-ITR-0444-SC – the Apex Court has clearly held that:

It is true that under Section 80-1(6) for the purpose of calculating the deduction, the loss sustained in one of the units, cannot be taken into account because Sub-Section 6 contemplates that only the profits shall be taken into account as if it was the only source of income.

The court has further held that the overall deduction cannot exceed the gross total income in terms of section 80A(2) and 80B(5) – Copy of the judgment is enclosed at page 33 to 40.

In view of above arguments and judicial decisions the losses of the eligible industrial undertaking be not clubbed with the profits of eligible industrial undertaking for arriving at eligible profits. Each eligible industrial undertaking be considered as a separate industrial undertaking.”

11. The Ld. DR, on the other hand, contended that the arguments of the Ld. counsel for assessee were totally devoid of merits and the issue was squarely covered by he decision of the Hon’ble Jurisdictional High Court in the case of Him Teknoforge Ltd. (supra) and there was no distinction as pointed out by the Ld. counsel for assessee between the wording in sections 80IA and 80IC of the Act as such.

12. We have heard the contentions of both the parties carefully and have even carefully gone through the orders of the Hon’ble Jurisdictional High Court in the case of Him Teknoforge Ltd. (supra) which have been heavily relied upon by the Revenue in support of the order of the lower authorities on the proposition that the profits and losses of all the eligible undertakings are to be netted and on the balance of profits the deduction is to be calculated u/s 80IC of the Act.

13. The facts before the Hon’ble Jurisdictional High Court were that the assessee was having separate units, some of which were entitled to benefit in terms of section 80HH and 80IA of the Act and which were referred to as priority units. In all the cases none of the priority units were running in losses and the Revenue had contended that the losses of the non priority units had also to be taken into consideration for working out the income of priority units for the purpose of calculation of deduction u/ss 80HH and 80IA of the Act. It was the contention of the Revenue that the income whether positive or negative of all the units priority or non priority were to be clubbed together for working out gross total income for the purpose of grant of tax benefits. The contention of the assessee, on the other hand, was that the deduction was to be computed only on the profits and gains derived from industrial undertakings to which the benefit was granted and was not relatable to the gross total income of the assessee but only to the gross income from that particular industrial undertaking.

On going through the order of the Hon’ble High Court in the case of Him Teknoforge Ltd. (supra), we find that the question of law before the Hon’ble Jurisdictional High Court was that whether deductions u/s 80HH/80IA of the Act were allowable on the profits of each unit separately. The Hon’ble High Court after considering the provisions of the Act and various judicial decisions in this regard, held that while calculating the deduction under Chapter VI-A, under which the deductions were allowed, only the profits of priority units, meaning thereby the eligible units, were to be taken into consideration.

14. The Hon’ble High court analyzed the relevant provisions of chapter VI A ,specifically referring to section 80AB included therein and which dealt with deduction to be made with reference to income included in the gross total income. The same is reproduced hereunder for clarity:

“80AB. [Deductions to be made with reference to the income included in the gross total income.

Where any deduction is required to be made or allowed under any section [][* * *] included in this Chapter under the heading “C—Deductions in respect of certain incomes” in respect of any income of the nature specified in that section which is included in the gross total income of the assessee, then, notwithstanding anything contained in that section, for the purpose of computing the deduction under that section, the amount of income of that nature as computed in accordance with the provisions of this Act (before making any deduction under this Chapter) shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income.]”

15. Reading the same, the Hon’ble High Court held that there can be no manner of doubt that only income from a priority undertaking is to be taken into consideration while making the deduction and the profits or losses of non priority undertakings are not to be considered. Going further, the Hon’ble High Court held that if there were more than one priority undertaking, the profits and losses of all the priority undertakings had to be clubbed together and deduction was to be calculated on the profits remaining. While laying down this proposition the Hon’ble High Court stated that though the Hon’ble Apex Court in the case of CIT(Civil) Madras Vs. Canara Workshops Pvt. Ltd. (1986) 61 ITR 120 has clearly held that no clubbing of profits and losses of priority undertaking shall to be done for calculating the quantum of eligible deduction, the later decisions of the Hon’ble Apex Court in IPCA Laboratories Ltd. Vs. DCIT (2004) 266 ITR 521, ITO Vs. Induflex Products Pvt. Ltd. (2006) 280 ITR 1 and the decision of the Hon’ble Apex Court in the case of Synco Industries Ltd. Vs. AO & Another (2008) 299 ITR 444, diluted the said decision and relying on the later decisions of the Hon’ble Apex Court, the Hon’ble High Court held that the profits and losses of the priority units were to be clubbed and thereafter the deduction calculated. The Hon’ble High Court found that the Hon’ble Apex Court in the said cases i.e. IPCA Laboratories Ltd. (supra) and Induflex Products Pvt. Ltd. (supra), while dealing with the issue of deduction allowable u/s 80HHC, had held that section 80AB had a notwithstanding clause and thus had a overriding effect over all other sections in Chapter VIA, which included section 80HHC also. The Hon’ble apex court noted in the said decision that section 80HHC did not provide that its provision would prevail over section 80AB or any provisions of the Act. Thus the Hon’ble Apex Court held that the section 80HHC would be ignored by 80AB and, therefore, as per section 80AB of the Act the amount of income eligible for deduction would have to be computed in accordance with the provisions of the Act which meant that the profits and losses of units would have to be set off against each other, since the section providing for set off of losses preceded the Chapter VI-A dealing with deduction under the Act. Following this proposition laid down by the Hon’ble Apex Court in the case of IPCA Laboratories Ltd. (supra) the Hon’ble High Court held that the Hon’ble Apex Court had clearly laid down the law in this regard that section 80AB would prevail over the other sections provided in Chapter VI A of the Act dealing with the deduction of incomes ,and since section 80AB provided for the computation of income eligible for deduction in accordance with the provisions of the Act, the profits and losses of all priority units needed to be set off and in the balance income only deduction was to be calculated.

16. The point to be noted is that the Hon’ble High Court followed the decision of the Hon’ble Apex Court in the case of IPCA Laboratories Ltd. (supra) wherein the Hon’ble Apex Court was seized with the issue of deduction u/s 80HHC of the Act and the Hon’ble Apex Court had held that since section 80AB of the Act provided for a notwithstanding clause and there being no such corresponding clause provided for in section 80HHC the provision of section 80AB would override the provisions of section 80HHC of the Act. This is a very important observation of the Hon’ble High Court and it is from this that a distinction can be drawn vis-à-vis deduction claimed u/s 80IC of the Act, which is the fact in the present case. For clarity the relevant provisions of section 80IA & 80IC of the Act are being reproduced hereunder:

“80-IA [(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of profits and gains derived from such business for ten consecutive assessment years.]”

“(5) Notwithstanding anything contained in any other provision of this Act, the profits and gains of an eligible business to which the provisions of sub-section (1) apply shall, for the purposes of determining the quantum of deduction under that sub-section for the assessment year immediately succeeding the initial assessment year or any subsequent assessment year, be computed as if such eligible business were the only source of income of the assessee during the previous year relevant to the initial assessment year and to every subsequent assessment year up to and including the assessment year for which the determination is to be made.”

“8 0-IC [Special provisions in respect of certain undertakings or enterprises in certain special category States

(1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3).”

7) The provisions contained in sub-section (5) and sub-sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible undertaking or enterprise under this section.”

17. As per section 80IC(7), the provisions of section 80IA(5) have been made applicable to the undertaking or enterprises eligible for deduction u/s 80IC of the Act. And, section 80IA(5) begins with a notwithstanding clause . Thus when provisions of section 80IC are read alongwith the provisions of section 80AB of the Act, we find that section 80IC of the Act clearly provides that its provisions are to prevail over the provisions of section 80AB of the Act which was absent in the case of section 80HHC, as noted by the Hon’ble Apex Court in the case of IPCA Laboratories Ltd. (supra). Therefore, the proposition laid down by the Hon’ble Jurisdictional High Court in the case of Him Teknoforge Ltd. (supra) that the profits and losses of the priority units are to be clubbed for calculating eligible deduction under Chapter VI A having been borrowed from the law laid down by the Hon’ble Apex Court in the case of IPCA Laboratories Ltd. (supra), which is clearly distinguishable from the present case, as pointed out above, the same will not apply to deduction claimed u/s 80IC of the Act. As stated above, the provisions of section 80IC will prevail over section 80AB of the Act and the deduction will have to be calculated as provided for in section 80IC(7) of the Act, as per which for the purpose of determining the quantum of deduction the eligible undertaking is to be treated as the only source of income of the assessee during the previous year, thus treating each eligible undertaking or enterprise as a separate unit for the purpose of calculating deduction.

18. Even otherwise as correctly pointed out by the Ld.Counsel for the assessee, while the decision in the case of Him Teknoforge Ltd. (supra) was rendered in the context of section 80IA, the assessee in the present case has claimed deduction u/s 80IC and the relevant provisions of two sections which deal with the calculation of quantum of deduction are differently worded in the two sections having an impact of the interpretation of the same.

19. Section 80IA(5) states that the profits and gains of eligible “business” shall be computed as if such eligible “business” were the only source of income of a during previous years. Thus section 80IA(5) applies to eligible “business”, the meaning for which can be gathered from section 80IA(1) wherein business carried out by eligible undertaking have been referred to as eligible business. Section 80IC, on the other hand, has no reference to business and uses only the work “undertaking or enterprise”. This distinction, in our view, is very critical and important. Literally interpreting the applicability of the provisions of section 80IA(5) is “business specific” and, therefore, includes all eligible undertakings carrying out eligible business. On the other hand, section 80IC(7) states that the provisions of section 80IA(5) would apply to eligible undertaking or enterprises meaning thereby that the word ‘business’ used in section 80IA(5) is to be substituted with eligible undertaking. Therefore, for the purpose of section 80IC(7), we agree with the Ld. counsel for assessee, it is the profits of each eligible undertaking which are to be treated and taken separately as being the only source of the income during the impugned year and allowed deduction thereof as opposed to treating the eligible business of all eligible undertakings u/s 80IA(5) of the Act as being the only source of income for the impugned years as stipulated u/s 80IA(5) of the Act.

20. The first and primary rule of construction is that the intention of the legislature must be found in the words used by the legislature itself. Every word of a statute has to be assumed to have been deliberately and consciously incorporated therein by the legislature and if the language of a statute is clear and explicit, effect must be given to each word. The Hon’ble Apex court has time and again reinforced this rule of interpretation of statutes in its judgements, right from Padmasundara Rao vs State of TN 255 ITR 147(SC), Mohammad Vs CWT 224 ITR 672(SC) & Pandian Chemicals Ltd. vs CIT 262 ITR 278(SC).In view of the same since the words used in section 80IC categorically state that the provisions of sub section 5 to section 80IA shall apply to the eligible undertaking or enterprise, they have to be read as such and applied to each undertaking, meaning thereby that the profits of each eligible undertaking has to be treated as if it were the only source of income of the assessee.

21. Further as rightly pointed out by the Ld. counsel for assessee that if the interpretation given in the case of Him Teknoforge Ltd. (supra) is applied for the purpose of section 80IC, it would lead to an anomalous situation creating a difficulty for calculating the quantum of deduction, since as rightly pointed out by the Ld. counsel for assessee, the section provides for different rates of deduction of profits for different years in case of specific undertakings and if netting of profits and losses of all eligible undertakings are resorted to, as laid down in the decision of Him Teknoforge Ltd. (supra), in a situation where the different eligible units are entitled to different rates of deduction of profits, it would be difficult to determine the rate to be applied to the remaining profits since there is no section or provision in the entire Act dealing with such a situation. We therefore, agree with the Ld. counsel for assessee that the decision in the case of Him Teknoforge Ltd. (supra) having been rendered in the context of section 80IA does not apply in the present case which deals with deduction u/s 80IC of the Act and since as per section 80IC it is the profit on each undertaking which is to be treated as separately, the profits and losses of all the eligible undertakings are not to be netted for the purpose of calculating deduction u/s 80IC and are to be taken on a stand alone basis.

22. In view of the above, we direct the A.O. to allow deduction to the assessee u/s 80IC with respect to the profits earned by the assessee from the eligible undertakings ignoring the losses from other eligible undertakings. Ground of appeal No.1 raised by the assessee is allowed.

23. Ground No.4 raised by the assessee reads as under:

“4. As per facts and circumstances of the case and provisions of law, the Commissioner of Income Tax (Appeals) has erred in not quantifying the brought forward credit of Minimum Alternate Tax of Rs.1,28,87,280 eligible for credit . The same being eligible for credit u/s 115JAA be directed to be adjusted as per law.”

24. In the above ground the Ld. counsel for assessee has contended that it has not been granted the benefit of MAT credit as eligible and allowable u/s 115JAA of the Act. The limited prayer of the Ld.Counsel for the assessee was that the A.O. be directed to granted the same as per law.

In view of the same, we direct the A.O. to examine the facts of the case and accordingly grant the assessee credit u/s 115JAA to which is eligible in accordance with law.

25. The appeal of the assessee is, therefore, partly allowed.

26. In the result, all the appeals filed by the assessee are partly allowed.