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Issues: Whether deductions under Chapter VI-A, specifically under sections 80K and 80T, are admissible where the assessee's gross total income is a loss.
Analysis: Chapter VI-A permits deductions in computing total income only from gross total income as defined in section 80B(5), and section 80A(2) limits the aggregate deductions to the amount of gross total income. On that construction, deductions under sections 80K and 80T can be allowed only when the gross total income is a positive figure. Where the gross total income is nil or a negative figure, the statutory ceiling is not met and no deduction can be granted under Chapter VI-A.
Conclusion: The assessee was not entitled to deductions under sections 80K and 80T when the gross total income was a loss; the answer is against the assessee and in favour of the Revenue.
Final Conclusion: The reference was answered by holding that Chapter VI-A deductions cannot exceed gross total income and are unavailable when the computed gross total income is negative.
Ratio Decidendi: Deductions under Chapter VI-A are allowable only out of positive gross total income, and the aggregate deduction cannot exceed the gross total income computed under the Act before Chapter VI-A deductions.
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