TaxTMI 
TaxTMI 
1979 (10) TMI 31
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.... be deducted from the sum of Rs. 47,027 which was claimed as a deduction from the " gross total income " under section 80J(1) of the Income-tax Act, 1961 ?" The brief facts giving rise to the case are that the assessee owns two flour mills and derives income mainly from grinding of wheat. During the previous year relevant to the assessment year 1967-68, the assessee-company had also set up a cold storage. The previous year relevant to the assessment year 1971-72 ended on March 31, 1971. The assessee returned its total income of Rs. 9,84,560. The gross total income of the assessee included the profit of Rs. 47,027 made from the industrial undertaking of the cold storage. It is common ground that the cold storage from which this income was derived satisfied the conditions laid down under s. 80J(4) of the Act. The loss, depreciation, development rebate, profit and deficiency under s. 80J of the cold storage, being newly established industrial undertaking in different years, are as under: --------------------------------------------------------------------------------------------------------------------------------------------------- Assessment Loss Depreciation Development Pr....
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....rrant the conclusion that notwithstanding that the losses, depreciation and development rebate of earlier years pertaining to the cold storage business had already been adjusted in computing the total income of the assessee for those years, till such losses, depreciation and development rebate of the earlier years could once again be adjusted against the profits of the cold storage business for the assessment year 1970-71, and thus the reference was decided in favour of the assessee and against the revenue. It is not disputed that the judgment in Patiala Flour Mills' case [1978] 113 ITR 55 (P & H) of this court was challenged in the Supreme Court by the revenue and the said appeal had been dismissed, the final court of appeal having affirmed the decision of this court. In view of this, the learned counsel for the parties are agreed that question No. 1 referred to us for our opinion has to be answered in the affirmative, in favour of the assessee and against the revenue and we order accordingly. For the assessment year under consideration the assessee claimed that the profit of Rs. 47,027 from the newly established industrial undertaking of the cold storage, should be deducted ei....
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....the Act. The gross total income had to be worked out for the entire business of the assessee and when the ITO himself computed the total income at Rs. 10,60,240 he had correctly worked out that gross total income because while arriving at the aforesaid income, the deduction of Rs. 41,174 on account of development rebate in respect of the cold storage unit had been allowed. The assessee's contention was accepted and the Tribunal held that when development rebate of Rs. 41,174 had once been deducted while arriving at the gross total, the same amount should not be reduced while working out the profit from the industrial undertaking. It was, therefore, held that the deduction under s. 80J(1) of the Act should be allowed to the extent of Rs. 47,027. - In other words, it was held for purposes of working out the deduction under s. 80J(1) of the Act that development rebate of Rs. 41,174 should not be deducted. The deficiency under s. 80J of the Act for this year was taken at Rs. 62,315 and along with the carried forward deficiency of earlier years amounting to Rs. 1,47,916, the total deficiency to be carried forward would be Rs. 2,10,231. Thus, the assessee's appeal on this point was allow....
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....come of an assessee for a particular year. Thus, the contention that while working out the profit or loss under the head " Profits and gains of business or profession ", the profits or losses qua each particular business have to be worked out, is without any merit. The matter can be viewed from another angle. It is not disputed that the deduction in respect of profits and gains from a newly established industrial undertaking are to be calculated on the figure arrived at called ((gross total income ". The term " gross total income " has been defined in s. 80B(5) of the Act as follows: " 'I gross total income ' means the total income computed in accordance with the provisions of this Act, before making any deduction under this Chapter or under section 280-0. " From this definition itself, it is to be noticed that the figure of gross total income has to be arrived at after computation of total income in accordance with the provisions of this Act, before making any deduction under Chapter VI-A or under s. 280-0 of the Act. It would thus be seen that while calculating gross total income the benefits as are permissible under s. 33(1)(c) and 33(2) of the Act, are to be allowed an....