2003 (10) TMI 12

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....le admitting this appeal, the following substantial question of law was framed for consideration of this appeal: "Whether, on the facts and circumstances of the case, the mistake pointed out by the Assessing Officer for invoking jurisdiction under section 154 of the Income-tax Act can be considered as a mistake apparent from the record, which could confer jurisdiction to the Assessing Officer for initiating and making orders under section 154 of the Income-tax Act, 1961, for the purpose of recomputing allowable deduction under section 80-I?" The above question relates to the rectification in the original assessment order in computing the deductions permissible under Chapter VI-A of the Income-tax Act, 1961 (hereinafter to be referred ....

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....ging out the deductions under Chapter VI-A in consonance with section 80A(2) read with section 80A(4) of the Act. The Assessing Officer has sought to compute the income of the new undertaking for the purpose of computing deductions permissible under that section by setting off the loss carried forward from the assessment year 1983-84 by treating the new undertaking as the only source of income against which such losses carried forward could be set off. It is on this premise that deduction under section 80-I was recomputed by reducing the profit of the new industrial undertaking by setting off the carried forward losses of the year 1983-84 and on the reduced amount, the deductions under section 80-I was computed. The assessee has urged....

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.... the losses were yet to be absorbed and, therefore, before arriving at the income from the priority industry for the purpose of calculating allowability of deductions under section 80-I, the unabsorbed depreciation or unabsorbed development rebate of the said new industrial undertaking which was carried forward in the previous year was required to be adjusted. However, this principle has no application where there is no carry forward of the previous year losses seeking adjustment against the income of the current year. Thus, the finding that there was no mistake in the original assessment which needed to be rectified, the rectification for recomputation of the allowability of the deductions under section 80-I was set aside. On further ap....