2006 (9) TMI 80

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... after going through the law laid down in CIT v. Canara Work shops P. Ltd. [1986] 161 ITR 320 (SC) as section 80B(5) of the Income-tax Act, 1961 (for short "the Act"), was not on the statute. The Revenue contends that before allowing deductions under Chapter VI-A, effect to all the provisions of the Act has to be given for determining the gross total income. The gross total income is defined in section 80B(5) of the Act which reads as under "gross total income' means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter." 3 According to this provision, gross total income means the total income computed in accordance with the provisions of this Act before making any dedu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s that it is only the residue of the income deducted in accordance with law that such a claim can be made. For better appreciation of the controversy, it would be useful to reproduce the provisions of sections 80-I and 8OHH of the Act. Section 80-I provides that: "80-1(1) Where the gross total income of an assessee includes any profits and gains derived from an industrial undertaking or a ship or the business of a hotel, or the business of repairs to ocean-going vessels or other powered craft, to which this section applies, there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to twenty per cent. ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....me of liquor division arrived from the business of liquor was made. 8 We have already reproduced the relevant provisions of sections 80-I and 8OHH of the Act which contemplates rebate to the extent of 20 per cent. of the profits and gains. On a plain reading of the provisions, we are of the view that the deductions under sections 80-I and 80HH are available only on profits and gains from business. In the present case, the assessee claimed relief under sections 80-I and 80HH on the hypothesis that it is only after the losses are clubbed with the profit of the other concerns that relief is available to him. We find that grant of relief contemplates profits and gains defined under section 80B(5) which contemplates the gross total income to ....