Computation of deduction under section 80-I vis-à-vis Section 32AB investment deposit disallowance upheld; appeals dismissed following precedent

Whether profits eligible for deduction under section 80-I must be reduced by investment deposits claimed under Section 32AB was considered; the court applied existing higher-court precedent holding that the investment deposit claim does not diminish the profits available for the incentive deduction, and therefore the appellant s contention was rejected. The tribunal s rejection was affirmed on the basis of the settled ratio in earlier superior-court decisions relied upon by the court. Consequence: the appeals were dismissed and the deduction computation stands without reduction for the investment deposit claim.

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Issues: Whether, for the purposes of deduction under Section 80-I of the Income-tax Act, 1961, the profits derived from the industrial undertaking must be reduced by the amount of investment deposit claimed under Section 32AB of the Income-tax Act, 1961.

Analysis: The question requires examination of the statutory scheme governing deductions under Section 80-I and the treatment of investment deposits under Section 32AB when computing profits of an industrial undertaking. Applying the applicable provisions and authoritative precedents on the interplay between allowance/deduction provisions and computation of taxable profits, the Tribunal's conclusion rejecting the reduction of profits by the Section 32AB investment deposit claim is consistent with the statutory framework and established legal principle that such claims must be considered in accordance with the specific mechanism prescribed by the Income-tax Act, 1961.

Conclusion: The issue is answered against the assessee and in favour of the Revenue; the claim that profits for Section 80-I deduction should be reduced by the investment deposit under Section 32AB is not accepted.

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