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TMI Blog1979 (1) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... d into an agreement with a Libyan company for the supply of technical services. It received from the Libyan company a sum of Rs. 4,63,663 as remuneration for services rendered during 1966, the previous year for 1967-68. The assessee's employees at Libya had been paid remuneration at the work-spot by the Libyan company. The balance of the service fees was remitted to India, the actual amount remitted being Rs. 2,46,315. It is stated that the assessee had incurred a sum of Rs. 3,03,113 as and by way of salaries and sundry expenses, which related to the amount received from the Libyan company. It is possible that only part of the sum of Rs.3,03,113 was incurred abroad, as, if the whole of Rs. 3,03,113 was incurred abroad, it would not have bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, under an agreement approved by the Central Government in this behalf before the 1st day of October of the relevant assessment year, the assessee shall be entitled to a deduction from the income-tax with which it is chargeable on its total income for the assessment year of so much of the amount of income-tax calculated at the average rate of income-tax on the income so included as exceeds the amount of twenty-five per cent. thereof." We have first to see, as required by this provision, whether the assessee has any total income and whether the said total income includes any income by way of royalty, commission, fees or payment for technical services. If these conditions are satisfied, then the assessee will be eligible to a deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1967-68. During the relevant period it earned an income of Rs. 46,319 from its business. It had sold machinery and buildings, etc., resulting in balancing charges contemplated by s. 41(2) amounting to Rs. 7,55,807. There was also unabsorbed depreciation and unabsorbed development rebate aggregating to Rs. 2,54,613. The ITO applied the provision of s. 80E which gives relief in respect of profits of electricity and other priority undertakings. He treated the sum of Rs. 7,55,807 as profit attributable to the business of generation and distribution of electricity and calculated the relief due under s. 80E accordingly after setting off the unabsorbed depreciation and development rebate carried forward from the earlier year. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebate carried forward from the earlier years would have to be deducted before arriving at the figure from which the 8 per cent. contemplated by s. 80E was to be deducted. In coming to this conclusion, the Supreme Court referred to the provisions of s. 80E(1) and the language employed in that particular provision. That section in its own language provides that the total income as computed in accordance with the other provisions of the Act will have to be taken. It further provides for the profits and gains attributable to the business of generation or distribution of electricity being taken into account. The word " profit " by itself would ordinarily indicate, not the gross profit but the net amount. Having regard to the above, the relief un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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