2001 (2) TMI 97

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.... holding that the deduction under section 80HH of the Act should be allowed to the assessee on commercial profits before allowing deduction of unabsorbed investment allowance of preceding year in view of the provisions of section 80AB of the Act ?" The facts necessary for the present purpose are that the assessee is a partnership firm. For the assessment year 1983-84, the assessee-firm claimed deduction under section 80HH in respect of profits and gains from newly established undertaking in backward area. The Income-tax Officer accepted its claim, but while working out the quantum of deduction as claimed by the assessee, he deducted the unabsorbed amount of investment allowance of the preceding year from gross income. Against this adjust....

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....n from such profits and gains of an amount equal to twenty per cent. thereof. Section 80AB clearly postulates that for the purpose of computing the deduction under any provision of Chapter VI-A, of which section 80HH is also a part, the amount of income as computed in accordance with the provisions of the Income-tax Act, 1961, before making any deduction under this Chapter shall alone be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his gross total income. Thus, for the purpose of computing the gross total income from the business in respect of which deductions under section 80HH or for that matter any other provision under Chapter VI-A is concerned, it must be comp....