Chapter VI-A deductions cannot exceed nil gross total income, so section 80-I relief is unavailable where no taxable income exists.

Section 80A(2) limits deductions under Chapter VI-A to the amount of gross total income, which is computed before those deductions. Where gross total income is nil, no relief under section 80-I can be allowed because the statute does not permit a deduction that would create a negative taxable figure. The amended section 33(2) similarly confines development rebate to total income computed without Chapter VI-A deductions, reinforcing that statutory allowances cannot exceed available income. On that reasoning, the assessee was not entitled to relief.

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Issues: Whether relief under section 80-I of the Income-tax Act, 1961 could be allowed when the assessee's gross total income was nil, having regard to section 80A(2) and the amended provisions governing development rebate.

Analysis: Section 80A(2) restricts the aggregate deductions under Chapter VI-A to the amount of the gross total income, and gross total income means income computed before Chapter VI-A deductions. Where the gross total income is nil, no further deduction can be granted so as to produce a negative figure or loss. The amended section 33(2) also limits development rebate to the total income computed without Chapter VI-A deductions, reinforcing the statutory scheme that such allowances cannot exceed the available income.

Conclusion: The assessee was not entitled to relief under section 80-I, and the question was answered in the affirmative in favour of the Revenue.

Ratio Decidendi: Deductions under Chapter VI-A cannot exceed the gross total income, and where that income is nil, no relief can be allowed that would create a negative taxable figure.

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