1972 (1) TMI 14

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....e year, after setting off the losses brought forward from the preceding year?" The year of assessment is 1967-68. The Income-tax Officer determined the total income assessable to tax for that year at Rs. 2,13,769. The loss in the earlier years amounting to Rs. 87,437 was then set off against the profits and gains arising from the business of the assessee which is a limited company, apparently under section 72 of the Income-tax Act, 1961. From the balance net income of Rs. 1,26,332, 8 per cent. was deducted under section 80E as it stood at the relevant time. The assessee appealed and one of the contentions raised before the Appellate Assistant Commissioner was that for the deduction under section 80E, the total income arising from profits....

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....an company referred to in clause (a), or to any other company referred to in clause (b), if such Indian or other company is a company referred to in section 108 and its total income as computed before applying the provisions of sub-section (1) does not exceed twenty-five thousand rupees." Counsel for the assessee contended that the view taken by the Tribunal is not justified by the section. According to him, the computation of the total income of profits and gains arising from the business does not involve the application of section 72 of the 1961 Act providing for set-off. Counsel for the revenue, however, urged that the set-off permissible under section 72 is part of the computation of the total income. Chapter IV of the Income-tax ....

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....owed. Section 80E seems to be a special provision and permits deduction from profits and gains attributable to specific activities like business of generation or distribution of electricity or any other form of power or of construction, manufacture or production of any one or more of the articles or things specified in the List in the Fifth Schedule. The set-off under section 72 is applicable in relation to the profits and gains arising from any business or profession. We, therefore, think that the deduction under section 80E is a special benefit given to a company which satisfies the conditions under section 80E and the deduction of 8 per cent. permissible under that section is only from profits and gains attributable to the specific ac....