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TMI Blog1997 (2) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in section 80B(5) (with?) reference to the income of the previous year alone before setting off deductions carried forward from the earlier years? 2. Whether, on the facts and in the circumstances of the case, the deductions available under the Income-tax Act are to be allowed according to the list of priority decided by the Appellate Tribunal?" The assessee is a company and the assessment years involved are 1974-75, 1975-76, 1977-78 and 1978-79. The short question that arises in all the cases is whether the deduction under section 80J of the Act can be allowed even before setting off deductions of the carried forward loss and depreciation of the prior assessment years. The Appellate Tribunal found that under the provisions of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n CIT v. Rockweld Electrodes India Ltd. [1995] 215 ITR 358 did not take into account the intention of Parliament while construing the provisions of section 80B(5) of the Act. We have carefully considered the rival contentions of the parties. Section 80B(5) of the Act defines gross total income as under :--- "'gross total income' means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter or under section 280-O." The definition of "gross total income" is very clear that total income should be computed in accordance with the provisions of the Act, before making any deduction under the Chapter or under section 280-O of the Act. In other words, only after granting all ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived at the above view, after considering the decisions of the Supreme Court in the cases of H. H. Sir Rama Varma v. CIT [1994] 205 ITR 433 and Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120. In view of the decisions cited above, the Appellate Tribunal is not correct in holding that the assessee is entitled to deduction under section 80J of the Act before setting off the earlier loss carried forward or unabsorbed depreciation of the earlier years. The Tribunal was not right in holding that the deduction under section 80J has to be allowed first before deducting the carried forward business loss or unabsorbed depreciation. Since the view of the Appellate Tribunal is in direct contrast with the above decisions of this cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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