9911796707
TMI Blog1982 (7) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 1,50,644. The ITO deducted this amount of Rs. 1,50,644 from the amount of Rs. 3,90,291 and allowed relief at the rate of 20 per cent under s. 80HH of the IT Act. It was the assessee's plea before the ITO that his brought forward depreciation should be deducted after granting the relief under s. 80HH, which the ITO rejected. 3. Having lost before the CIT (A), the assessee is in appeal before the Tribunal. During the course of the hearing of the assessee's appeal before the Tribunal, the ld. rep. For the assessee has relied on the Supreme Court decision in the case of Cloth Traders (P) Ltd. vs. Addl. CIT (1979) 10 CTR (SC) 393 : (1979) 118 ITR 243 (SC) and the Calcutta High Court decision in the case of CIT vs. Orient Paper Mills Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applies, there shall, in computing the total income of the assessee, be allowed a deduction from such profits and gains of an amount equal to 20 per cent thereof. So, we have to allow deduction under s. 80J from the "gross total income" of the assessee. The term "gross total income" has been defined in s. 80B(5) to mean total income computed in accordance with the provisions of the IT Act before making any deduction under Chapter VIA of the IT Act or under s. 280-O of the IT Act. So, according to s. 80B(5), first we have to compute the total income of the assessee in the normal course by including incomes from all sources, as may be includible and giving deductions under all sections, as may be admissible. This means that the "gross total i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceeding year. In the circumstances, the procedure adopted by the ITO for deducting the unabsorbed depreciation of the earlier years separately is erroneous. He should have aggregated it with the depreciation as may be admissible for the current year and then deducted it. In effect, so far as the facts of the present case are concerned, it would make no difference. But what we are commenting on is about the pure matter of procedure. As to the case law for and against the assessee cited at the bar, the Supreme Court decision in the case of Cloth Traders (P) Ltd. vs. CIT (1979) 10 CTR (SC) 393 : (1979) 118 ITR 243 (SC), we are unable to see any relevance of this decision while deciding the issue before us in the present appeal. In that case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under consideration. 5. In the instant case, considering the fact that the legislature has made specific provision for bringing forward of the earlier years depreciation and aggregating it with the current year's depreciation and considering the provisions of s. 80B(5) which has treated the basic total income for the purposes of deductions under Chapter VIA of the IT Act to be such final total income, in our opinion, the decision is obvious that the unabsorbed depreciation of the previous years had first to be aggregated with the current allowance for depreciation, as may be admissible. Only thereafter the relief under s. 80HH can be determined. Precisely this is what the ITO has done. In the circumstances, in our opinion, the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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