Chapter VI-A deduction computation excludes profits already relieved under another provision to prevent double deduction.

Deduction under Section 80HHC had to be computed after excluding profits already allowed deduction under Section 80IB. The Court applied Section 80IA(9) together with Section 80AB to hold that, for Chapter VI-A deductions, income must be computed in accordance with the Act and the same profits cannot receive double deduction. On that basis, profits of the Daman unit already covered by Section 80IB could not be included again while working out business profits for Section 80HHC, and the Revenue's computation prevailed.

---

---

Issues: Whether deduction under Section 80HHC of the Income-tax Act, 1961 was required to be computed without excluding the profit of the Daman unit on which deduction under Section 80IB had already been allowed.

Analysis: The Court followed its earlier view that Section 80IA(9) operates at the stage of computing deduction under Section 80HHC and requires profits already allowed deduction under another provision of Chapter VI-A to be ignored while working out business profits. It also relied on the principle that Section 80AB governs computation of deductions under Chapter VI-A and that income must be computed in accordance with the Act, including the effect of provisions that restrict double deduction of the same profits.

Conclusion: The question was answered in favour of the Revenue, and the deduction under Section 80HHC had to be computed by excluding the profit already covered by deduction under Section 80IB.

Final Conclusion: The appeal succeeded and the Tribunal's view was reversed to the extent indicated, with the result that the Revenue's position on computation of deduction prevailed.

Ratio Decidendi: For computing deduction under Section 80HHC, profits already allowed deduction under another Chapter VI-A provision must be excluded, because Section 80IA(9) and Section 80AB prevent double deduction of the same income.

---