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TMI Blog2015 (1) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of determining the deduction under Section 80I of the Income Tax Act. - Decided in favour of assessee. - Tax Case (Appeal) Nos. 2386 & 2387 of 2006 - - - Dated:- 12-1-2015 - R. Sudhakar And R. Karuppiah,JJ. For the Appellant : Mr. R. Vijayaraghavan For the Respondent : Mr. T. Ravi Kumar JUDGMENT (Delivered by R. Sudhakar,J.) The above Tax Case (Appeals) filed by the assessee as against the order of the Income Tax Appellate Tribunal were admitted by this Court on the following substantial questions of law: 1. Whether on the facts and circumstances of the case, the Tribunal was right in holding that the losses incurred by the industrial undertaking claiming deduction under Section 80 I, which has been alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1992-93. In response to the show cause notice, the assessee filed a reply stating that deduction under Section 80 I of the Income Tax Act should be construed as profits earned during any year and it should not be treated as profits after setting off of the carried forward losses. However, the Assessing Officer did not agree with the said reply of the assessee and passed the rectification order by notionally carried forward the losses of the earlier years and setting off the same against the profit available during the assessment year 1992-93. Since deduction under Section 80I was negatived for the assessment year 1992-93, the Assessing Officer withdrew the deduction for the assessment year 1993-94 also. 3. Aggrieved by the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case is identical to the issue decided by this Court dated 23.12.2009 made in T.C.(A)No.298 of 2004 in the case of Commissioner of Income Tax, Chennai V. M/s. TTK Pharma Limited, Chennai. 8. Heard learned counsel appearing for the assessee and the learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 9. Whether the issue raised in these appeals is identical to the issue in the above-said decision of this Court in the case of TTK Pharma Limited (supra) needs to be seen. 10. The question raised in the above-said decision of this Court was whether for the purpose of allowing deduction under Section 80 I, the brought forward losses and unabsorbed depreciation etc., of the new industri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... includes any profits derived from the priority undertaking/unit/division, then in computing the total income of the assessee, a deduction from such profits of an amount equal to 20 per cent has to be made. Section 80-I(1) lays down the broad parameters indicating circumstances under which an assessee would be entitled to claim deduction. On the other hand, section 80-I(6) deals with determination of the quantum of deduction. Section 80-I(6) lays down the manner in which the quantum of deduction has to be worked out. After such computation of the quantum of deduction, one has to go back to section 80-I(1) which categorically states that where the gross total income includes any profits and gains derived from an industrial undertaking to whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll be taken into account as if it was the only source of income. However, section 80A(2) and section 80B(5) are declaratory in nature. They apply to all the sections falling in Chapter VI-A. They impose a ceiling on the total amount of deduction and, therefore, the non obstinate clause in section 80-I(6) cannot restrict the operation of sections 80A(2) and 80B(5) which operate in different spheres. As observed earlier, section 80-I(6) deals with actual computation of deduction whereas section 80-I(1) deals with the treatment to be given to such deductions in order to arrive at the total income of the assessee and, therefore, while interpreting section 80-I(1), which also refers to gross total income one has to read the expression gross tot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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