2011 (1) TMI 787 - BOMBAY HIGH COURT

Deduction u/s 80-IA(9) - Whether the amount of profits allowed as deduction under section 80-IA(1) of the Act has to be reduced from the profits of the business of the undertaking while computing deduction under any other provisions under heading C in Chapter VI-A of the Income-tax Act, 1961 - according to the Assessing Officer, if the assessee is entitled to deduction under sections 80-IA and 80HHC, then, deduction under section 80-IA(1) has to be computed and allowed on the profits of the business and the deduction allowable under section 80HHC has to be computed on the profits of the business as reduced by the profits allowed as deduction under section 80-IA of the Act - There is no dispute that in the present case, the assessee is an under taking entitled to deduction under section 80-IA at 30 per cent. of the profits and gains derived from the business and deduction under section 80HHC at 50 per cent. of the profits of the business

It is well established in law that the language of the statute must be read as it is, and the statute must not be read by adding or substituting the words unless it is absolutely necessary to do so - Held that: section 80-IA(9) does not affect the computability of deduction under various provisions under heading C of Chapter VI-A, but it affects the allowability of deductions computed under various provisions under heading C of Chapter VI-A, so that the aggregate deduction under section 80-IA and other provisions under heading C of Chapter VI-A do not exceed 100 per cent - Central Board of Direct Taxes Circular No. 772 dated December 23, 1998 wherein it is stated that section 80-IA(9) has been introduced with a view to prevent the taxpayers from claiming repeated deductions in respect of the same amount of eligible income and that too in excess of the eligible profits - Decided in favor of the assessee