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TMI Blog2004 (12) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... ofit - As section 80HH also falls under Chapter VI-A of the Act in view of the specific finding of gross total income given in section 80B(5) of the Act the set off of losses is to be first done before allowing deduction under section 80HH of the Act. As in the present case after the set off of losses of earlier years the gross total income resulted in loss, no deduction under section 80HH was adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er years and investment allowance/development rebate/allowance 8. Gross total income (-) 3,58,09,036 While completing the assessment at a net loss of Rs. 2,65,12,669, the claim under section 80HH amounting to Rs. 5,20,402 was not considered to be legally correct and as such the same was not allowed on the following grounds: "The assessee has claimed deduction of Rs. 5,20,402 under section 80H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80HH on the basis of the decision of the Madras Tribunal stating that exactly similar controversy was considered by it in I.T.A. Nos. 237 and 238/Madras of 1982 reported in Yenpeyees Rubber (P.) Ltd. v. First ITO [1984] Taxation 72(6) 15 and has held that: "the deduction is required to be made taking a proportion of profits from new industrial undertaking in backward area. The dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the resultant income is a positive figure and is not a loss, deduction under section 80HH of the Act is admissible. In support of the aforesaid submission he relied upon a decision of the apex court in the case of CIT v. Kotagiri Industrial Co-operative Tea Factory Ltd. [1997] 224 ITR 604. The apex court in the aforesaid decision was considering the claim of deduction under section 80P of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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