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TMI Blog2015 (4) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... s and not to the extent of the gross total income as canvassed for by the appellant ? 3. Mr. Pardiwalla, learned Senior Counsel appearing for the appellant in support of the above appeal points out that the question in the present appeal is whether once the Assessing Officer determined the quantum of deduction which the appellant is entitled to be a sum of Rs. 19,92,39,981/- was it justified to restrict such amount to Rs. 17,40,33,719/- which according to him was the profit of the business. The learned Senior Counsel further pointed out that the appellant is engaged in the business of export of processed iron ore which is manufactured and produced by the appellant as well as ore in which the appellant trades. The learned Senior Counsel further pointed out that there was a first round of litigation in connection with the amount which the appellant is entitled as a deduction in terms of Section 80HHC of Income Tax Act ( herein after referred to as 'the said Act') which this Court had partially modified the directions of the Tribunal though that aspect is not relevant for deciding the above appeals. The learned Senior Counsel further pointed out that thereafter the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... off of the loss from one source or head against the income from another source or another head is to be given effect to in terms of Sections 70 to 74 of the said Act. The learned Senior Counsel further submits that the resulted figures are the aggregated and gross total income determined which is specially defined in Section 80B(5). Thereafter, according to the learned Senior Counsel in Chapter VI-A of the Act, the deductions are allowed and sub section (1) of Section 80A provides that in computing the total income of an assessee, there shall be allowed from his gross total income in accordance with and subject to the provisions of the Chapter which are the deductions specified in Section 80C to Section 80U. The learned Senior Counsel further submits that sub section (2) provides that the quantum of deduction allowable is the aggregate amount of deductions under the Chapter which shall not in any case, exceed the gross total income of the assessee. The learned Senior Counsel further pointed out that Part 'C' of the said Chapter determine specified deductions allowable and that in such part, Section 80HHC provides for a deduction in respect of the profits derived from the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fit but had incurred a loss in its spinning division. After setting off the loss against the profits, it had a gross total income of Rs. 48,31,526/-. The learned Senior Counsel further pointed out that the Andhra Pradesh High Court therein held that the loss could not be set off from the profit of the asbestos division and as such upheld the stand of the assessee that it was entitled to a deduction under Sections 80HH and 80I of the profits computed on a standalone basis of the asbestos division. The learned Senior Counsel further pointed out that the Tribunal in para 8 of its order accepts that the deduction is to be allowed is to the extent of the profits and gains of export business but after having said so impliedly restricts it to the income assessed under the head "profits and gains of business or profession" overlooking that the profits and gains of the export business are computed by the Assessing Officer himself at Rs. 19,92,49,981/- and as such the appellants are entitled for a deduction of the said sum in terms of Section 80A(2) by restricting its claim to Rs. 19,78,94,900/-. The learned Senior Counsel thereafter has taken us through the orders passed by the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gross total income of the assessee. Reading the said provisions of the Act, one finds that the gross total income means the total income computed in accordance with the provisions of the said Act before making any deductions under this Chapter. 6. Section 80AB of the Income Tax Act then in force reads thus : "80AB. Where any deduction is required to be made or allowed under any section ( except section 80M) 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." 7. Section 80B(5) of the said Act defines the gross total income thus : "80B(5)"gross total income" means the total income computed in accordanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns on its export profits alone, which is included in computing its gross total income. Section 80HHC (3) was introduced when the provisions of Section 80AB were already on the statute. Even upon reading the provisions of Section 80AB of the said Act, the determination of the amount as provided therein would have to be effected for the purpose of computing the deductions under each of the respective sections specified in Part C of the said Act. As such, while computing the deduction under Sections 80HHB, 80HHC, 80HHD, 80I, 80IB, 80IA, 80IB etc., one would have to apply Section 80AB of the said Act. On perusal of Annexure A, we find that the deduction under Section 80HHC to which the appellant was entitled has been arrived at a sum of Rs. 19,92,49,981/- by the respondents themselves. In terms of Section 80AB(2), the restriction of the deduction is to the gross total income and in such circumstances, the restriction to the total profit of business in a sum of Rs. 17,40,33,719/- is not at all justified. The restriction is on the gross total income of Rs. 19,78,94,900/- and as such we find that the restriction effected by the Assessing Officer on the deduction is not at all justified. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), it has been observed at paras 2 and 3 thus : "2. The question sought to be raised in this appeal relates to the deduction under section 80-O of the Income Tax Act, 1961 ("Act" for short ). The Tribunal has considered this question taking into account the calculations made by the Assessing Officer; wherein he has determined the deduction under section 80-O in the sum of Rs. 1,29,41,830/- being the 50% of the income so received or brought into India. This figure is not disputed by the learned counsel for the Revenue. The only question sought to be canvassed is that out of these deductions the admissible deduction under Section 80-O ought to be limited to the extent of Rs. 69,70,127/- which represents business income. In other words, the income from interest and dividend shall not form part of the gross total income as defined under section 80B(5) of the Act. The submission is misconceived. If one turns to the definition of the 'gross total income" under section 80B-5, it reads as under : " 80B(5) "gross total income" means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter." 3. Considering the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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