Chapter VI-A deduction computation must include Section 32 depreciation, even when current depreciation was not claimed.

For Chapter VI-A relief, gross total income must first be computed after allowing deductions under Sections 30 to 43D, including depreciation under Section 32. An assessee's decision not to claim current depreciation in the return does not override this statutory computation base for Section 80IB deduction. Applying the Full Bench position, the Court treated depreciation as mandatory in determining eligible gross total income and answered the issue against the assessee, in favour of the Revenue.

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Issues: Whether depreciation under Section 32 had to be deducted while computing entitlement to deduction under Section 80IB in Chapter VIA, even though the assessee had not claimed such depreciation.

Analysis: The Full Bench position accepted by the Court clarified that, for the purpose of deductions under Chapter VIA, gross total income must be computed after giving effect to deductions allowable under Sections 30 to 43D, including depreciation under Section 32. The assessee's choice not to claim current depreciation while computing income under Chapter IV did not alter the statutory requirement for computing gross total income for Chapter VIA relief. On that basis, the earlier view relied upon by the Tribunal was treated as consistent with the controlling law.

Conclusion: The question was answered against the assessee and in favour of the Revenue; depreciation had to be considered while determining the deduction under Section 80IB.

Ratio Decidendi: For Chapter VIA deductions, gross total income must be computed after allowing statutory deductions, including depreciation, notwithstanding the assessee's non-claim of current depreciation in the return.

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