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TMI Blog1979 (10) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961 ? (2) If the answer to question No. 1 is in the affirmative, whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 41,174, being the development rebate deducted in terms of section 33 by the Income-tax Officer while determining the " gross total income " could not again be deducted from the sum of Rs. 47,027 which was claimed as a deduction from the " gross total income " under section 80J(1) of the Income-tax Act, 1961 ?" The brief facts giving rise to the case are that the assessee owns two flour mills and derives income mainly from grinding of wheat. During the previous year relevant to the assessment year 1967-68, the assessee-company had al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -------------------------------------------- The loss, depreciation, development rebate, indicated above, were adjusted while computing the total income for the assessment years 1967-68, 1968-69 and 1969-70. For the previous year ending March 31, 1970, relevant to the assessment year 1970-71, the assessee claimed that the deficiency under s. 80J for the years prior to the assessment year 1970-71 should be adjusted against the profit of Rs. 1,51,011 of that year but the ITO did not agree with that contention. Being aggrieved, the assessee filed an appeal before the AAC, but failed. The assessee then filed an appeal before the Tribunal and the Tribunal held that the assessee was entitled to a deduction under s. 80J(1) first and the deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment in Patiala Flour Mills' case [1978] 113 ITR 55 (P H) of this court was challenged in the Supreme Court by the revenue and the said appeal had been dismissed, the final court of appeal having affirmed the decision of this court. In view of this, the learned counsel for the parties are agreed that question No. 1 referred to us for our opinion has to be answered in the affirmative, in favour of the assessee and against the revenue and we order accordingly. For the assessment year under consideration the assessee claimed that the profit of Rs. 47,027 from the newly established industrial undertaking of the cold storage, should be deducted either from the deficiency under s. 80J worked out for this year or from the brought forward def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld that Rs. 5,853 had first to be adjusted against the deficiency of Rs. 1,09,342 of this year. The Tribunal next considered whether the deduction under s. 80J(1) of the Act should be restricted to only Rs. 5,853 or deduction should be allowed in respect of the profit of Rs. 47,027 without reducing therefrom the development rebate of Rs. 41,174. It was argued on behalf of the assessee that the gross total income, as defined under s. 80B(5) of the Act, had to be computed in accordance with the provisions of the Act, but from such computation the deductions under Chap. VI-A or under s. 280-0 of the Act were not to be allowed. It was contended that under the said definition the gross total income had to be arrived at after deducting, inter a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revenue, that with a view to arrive at the conclusion whether there has been a loss or profit and to what extent from the cold storage newly established industrial undertaking, the unabsorbed depreciation and unabsorbed development rebate have first to be adjusted and whatever figure then works out will be either the loss or the income from the newly established industrial undertaking, and, therefore, it has been stressed that the unabsorbed development rebate amounting to Rs. 41,174 pertaining to the assessment year 1971-72 should be first adjusted as against the profit of Rs. 47,027 and the remaining profit may then be adjusted towards the claim made under s. 80J of the Act. We do not find any merit in this contention. Keeping in view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or loss under the head " Profits and gains of business or profession ", the profits or losses qua each particular business have to be worked out, is without any merit. The matter can be viewed from another angle. It is not disputed that the deduction in respect of profits and gains from a newly established industrial undertaking are to be calculated on the figure arrived at called ((gross total income ". The term " gross total income " has been defined in s. 80B(5) of the Act as follows: " 'I 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 280-0. " From this definition itself, it is to be noticed that the figure of gros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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