TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 312
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....return of income for the relevant year (PB 1): Table 1 (Amount in Rs.) Statement of total income for the year ended 31.03.2007 Income from business Profit from Tex International 3,903,043 Profit from Royal Energy Company Unit 1 36,333 Profit from Royal Energy Company Unit-2 3,151,954 Profit from Royal Energy Company Unit-3 699,551 7,790,882 Income from property (Personal a/c.) (A) Rent from Tata A/G 2 334,420 Less: 30% Repairs 700,326 1,634,094 (B) Rent from Rap Media 600,000 Less: 30% Repairs 180,000 2,054,094 420,000 Income from other sources (Personal a/c.) Interest received from Rap Media Ltd. 3,879,654 Interest paid to the Bank on loan taken (2,437,434) 1,442,220 Gross total income 11,287,196 Less set off against carry forward depreciation 7,507,162 Net taxable income 3,780,034 Less: Deduction under Chapter VI-A Section Type Amount Max allowed 80-IA Tex Intern....
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.... the only two decisions to his notice, and on which therefore he places reliance. The Revenue's case 4. In the view of the Revenue, the income of the eligible undertakings, being the TI unit and Royal Energy Unit No.1, as included in the GTI, cannot exceed Rs. 2,83,720/-, i.e., the amount assessable u/s.28 (Rs.77,90,882 - Rs. 75,07,162). Further, this would be irrespective of whether the brought forward unabsorbed depreciation of Rs. 75.07 lacs is in respect of the eligible or the non-eligible undertakings. The assessee, by claiming the deduction at Rs. 37.80 lacs, is in fact claiming deduction u/s.80-IA on the 'income from house property' (Rs. 20.54 lacs) and 'income from other sources' (Rs. 14.42 lacs), and which surely cannot be. This sums up the Revenue's case. Discussion and findings 5. We have heard the parties, and perused the material on record. 5.1 We shall begin by delineating the precise issue at hand. The Revenue does not dispute the 'stand alone' principle, sought to be canvassed before us by the ld. AR with reference to the decision by the tribunal in the case of Hercules Hoists Ltd. (supra). The said principle, legislatively mandated per section 80-IA(5), and fu....
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....the applicability of the provision and, thus, deduction u/s. 80-IA(1), under which only the deduction is to be allowed. This leads us to GTI, defined in s. 80-B(5), reading as under: 'Chapter VIA DEDUCTIONS TO BE MADE IN COMPUTING TOTAL INCOME A- General Definitions. 80B. In this Chapter- (1) ............ (5) "gross total income" means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter;' 5.2 To compute GTI, 'income' is therefore to be worked out in accordance with the provisions of the Act. Firstly, income from any source is to be computed following and applying the computational provisions of the relevant head of income. It is then aggregated for the different sources falling under the relevant head of income, which are again aggregated, i.e., across different heads of income. The aggregation is to be in terms of Chapter VI. This sequence is integral and has to be observed. The same, in the facts of the present case, adopting the figures specified in the computation of the income, which we find to be in agreement with that assessed, is as under: (Amount in Rs.) Table 2 Statement of total income for th....
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.... source of income, is Rs. 39.03 lacs (assuming no part of unabsorbed depreciation as relating to that Unit). The question is how much of this income is to be considered as included in GTI of Rs. 37.80 lacs. While the assessee claims the entire GTI (Rs.37.80 lacs) to be compromised of the profit of Unit-A, an eligible undertaking u/s.80-IA and, thus, deductible u/s. 80-IA(1), the Revenue claims it to be at Rs. 2.84 lacs only, limiting the deduction there-under to that amount. The assessee's contention in this regard only needs to be stated to be rejected. The GTI has to be computed following the provisions (ss. 66 to 80) of Chapter VI, which provides for the rules of the aggregation. Income falling under each head of income, i.e., Chapter IV-A to IV-F, would thus stand to be determined prior to being aggregated u/c. VI. Section 70 provides for an adjustment of income from one source of income against another falling under the same head of income. Section 71 provides for set off a loss under one head against income from another, i.e., for the same year. Sections 71B to 80 relate to the carry forward and set off of loss under different heads of income. In-as-much as therefore the asse....
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....o be set off against the income assessable u/s.22 and/or section 56 in-as-much as the same, per the deeming of section 32(2), forms part of the current years' depreciation, and is to be given effect to, save for a precedence to the provision of sections 72(2) & 73(3), which are inapplicable in the present case in-asmuch as there is no brought forward business loss. There is no occasion or need for the set off of unabsorbed deprecation against income assessable under other heads of income, i.e., under Chapters IV-C and IV-F, as the assessee claims or does. How, for instance, s. 70 come into play without first determining the income assessable u/s. 28, and which would only be after giving effect to the provision of s. 32. The charge of depreciation u/s.32, it must be appreciated, is one, single charge, i.e., irrespective of the different sources of income where-under it may arise and, accordingly, would, in terms of section 32(1) r/w s. 32(2), allowable under the income assessable u/s.28, which per section 29 is to be computed in accordance with the provisions contained in sections 30 to 43D. The other manner in which the assessee's claim can be interpreted or understood is to retai....