Independent tax deductions under Section 36(1) operate separately; clause (viia)(c) is not reduced by clause (viii).

Section 36(1)(viia)(c) is to be computed independently of Section 36(1)(viii), because the two deductions operate on different bases: clause (viii) applies to profits derived from business, while clause (viia)(c) is computed on total income. The clauses in Section 36(1) do not make one deduction dependent on the other, and the amendment to clause (viii) altered only the computation method, not the nature of the benefit. The interpretation that clause (viia)(c) must be reduced by clause (viii) was rejected as inconsistent with legislative intent, and the deduction under clause (viia)(c) remains available without such reduction.

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Issues: Whether the deduction under Section 36(1)(viia)(c) of the Income-tax Act, 1961 is to be computed only after reducing from the assessee's income the deduction allowable under Section 36(1)(viii) of the Income-tax Act, 1961, or whether the two deductions operate independently.

Analysis: The deduction under Section 36(1)(viii) is computed on profits derived from business, while the deduction under Section 36(1)(viia)(c) is computed on total income. The clauses in Section 36(1) are independent and do not make one deduction dependent on another. The amendment to Section 36(1)(viii) altered only the method of computation and did not change the character of the deduction. The legislative intent was to confine the deduction under clause (viii) to business income, and the rival interpretation would improperly make the benefit under clause (viia)(c) contingent on clause (viii).

Conclusion: The deduction under Section 36(1)(viia)(c) is not to be reduced by the deduction under Section 36(1)(viii), and the issue is answered in favour of the assessee.

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