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Issues: Whether deduction under Section 80HHC of the Income-tax Act, 1961 was required to be computed without reducing the deduction allowed under Section 80IB of the Income-tax Act, 1961 in view of Section 80IB(13) read with Section 80IA(9) of the Income-tax Act, 1961.
Analysis: The binding interpretation placed by the Supreme Court on Section 80IA(9) was applied. It was held that the restriction under that provision operates only to prevent double deduction under Chapter VI-A in respect of the same profits and gains, and does not require the deduction already allowed under Section 80IA or Section 80IB to be reduced from gross total income while computing another eligible deduction. On that basis, the deduction under Section 80HHC had to be worked out without first deducting the amount allowed under Section 80IB.
Conclusion: The issue was answered in favour of the assessee, and the deduction under Section 80HHC was held to be allowable without reducing the deduction under Section 80IB.
Final Conclusion: The appeal failed on the substantive computation question, the Tribunal's order was set aside, and the matter was sent back for fresh computation in accordance with the stated legal position.
Ratio Decidendi: Section 80IA(9) restricts double deduction under Chapter VI-A only to the extent of the profits already allowed under that provision and does not mandate reduction of such deduction from gross total income while computing another eligible deduction.
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