TaxTMI 
TaxTMI 
2015 (3) TMI 312
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....mputation of income, forming part of her 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 d....
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....aid computation being the net taxable or the total income under the Act. On being further enquired about any decision by any hon'ble high court or supreme court that would cover the assessee's case, he answered that the afore-cited decisions are 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 d....
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....ies Ltd. vs. Assessing Officer [2002] 254 ITR 608 (Bom), followed in and applied by the tribunal in Hercules Hoists Ltd. (supra), section 80-IA(3) & (4) (i.e., the corresponding provisions of s. 80I) only describes the qualifying conditions to be fulfilled for 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 seq....
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.... judicial view, and toward which we may refer to some of the decisions by the apex court referred to in Hercules Hoists Ltd. (supra), viz. Synco Industries Ltd. (supra); CIT vs. Kotagiri Industrial Co-operative Tea Factory Ltd. [1997] 224 ITR 604 (SC); H.H. Sir Rama Varma vs. CIT [1994] 205 ITR 433 (SC); Distributors Baroda (P.) Ltd. vs. Union of India [1985] 155 ITR 120 (SC). Also, without doubt, the income from Unit A, representing a separate 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....
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....e assessee's claim, the GTI would consist of the following: Table 3 Head A: Income from house property Rs.Nil Head B: Business income (Unit A) Rs.37,80,034/- Head C: Income from other sources Rs. Nil Rs.37,80,034/- What is the basis there-for? If not ridiculous or a travesty of the clear provisions of law, what is it? True, if the unabsorbed depreciation exceeds the business income of Rs. 77.91 lacs, the same would stand to 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. ....