1982 (5) TMI 51

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..... he ITO then set off losses of the previous year and determined the total income at nil. A note was also added to the order indicating unabsorbed depreciation and business losses carried forward. Later on the ITO realising that the gross total income of the assessee would be nil if the business losses are set off first against the total income, thus disentitling the assessee to relief under section 80HH, rectified the assessment under section 154 of the Act, withdrawing the said relief. The learned Commissioner (Appeals) upheld the order of the ITO for the reasons given below: "I have carefully considered the contentions put forward by Shri Shurpali. Sub-clause (5) of section 80B defines 'gross total income' as the total income computed und .....

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..... sses of earlier years. The columns in Part I of the return provide first for the aggregation of income under the various heads of income and for the deduction from such aggregate income of unabsorbed depreciation and business losses of past years for arriving at the gross total income. The only further deduction provided from this gross total income for arriving at the total income are deductions set out in Part I of Annexure F. These deductions consist entirely of deductions under Chapter VIA. I, therefore, hold that the procedure followed by the ITO in arriving at the total income of the appellant in his order under section 154 is in conformity with the procedure laid down in the Income-tax Act as well as in the Income-tax Rules." It wou .....

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..... come'. The gross total income is the income arrived at according to the provisions of the Act before giving the deductions under Chapter VIA. Hence, the total income had to be computed after setting off of losses and unabsorbed depreciation. If there is no resultant income, no relief would be admissible as provided in section 80A. All these are apparent from the Act itself and any deviation from these principles set out in the Act would constitute a mistake apparent from record. 5. However, the Kerala High Court's decision does not support the case of the revenue. The wordings in section 80E as it stood then are as follows: "80E. Deduction in respect of profits and gains from specified industries in the case of certain companies.---(1) In .....

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